Part of a comprehensive analysis of the Financial Services and Markets Act 2022
All Parts in This Series
- PART 1
- PART 2
- PART 3
- PART 4
- PART 4
- PART 5
- PART 6
- PART 7
- PART 8
- PART 9
- PART 10
- PART 11
- PART 12 (this article)
- PART 13
- Part 7
- PART 14
- Part 1
- Part 2
- Part 3
- Part 1
- Part 3
Key Provisions and Their Purpose under the Financial Services and Markets Act 2022
The Financial Services and Markets Act 2022 (the Act) establishes a comprehensive regulatory framework to govern financial institutions and services in Singapore. The key provisions in the Act empower the Authority to effectively regulate, supervise, and enforce compliance while ensuring due process and transparency. Below is an authoritative analysis of these provisions and their underlying purposes.
"The Authority may — (a) establish agencies at such places outside Singapore as the Authority thinks fit; (b) arrange with and authorise a person to act as agent of the Authority outside Singapore; (c) act as agent of a bank carrying on business inside or outside Singapore; and (d) act as agent of any public authority or any company in which the Government or a public authority has a substantial interest or any company which is deemed to be related to that company by virtue of section 6 of the Companies Act 1967 either generally or for a particular purpose inside or outside Singapore." — Section 178
Purpose: This provision allows the Authority to extend its regulatory reach beyond Singapore’s borders by establishing agencies and authorizing agents abroad. It also permits the Authority to act as an agent for banks and public authorities, facilitating cooperation and enforcement in cross-border financial activities. This extraterritorial capability is essential in a globalized financial market to ensure effective oversight and compliance.
"The Authority may appoint any person to exercise any of the Authority’s powers or perform any of the Authority’s functions or duties under this Act, either generally or in any particular case, except — (a) the power of appointment conferred by this subsection; and (b) the power to make subsidiary legislation." — Section 179(1)
Verify Section 179 in source document →
Purpose: This provision enables the Authority to delegate its powers and functions to appointed persons, enhancing operational flexibility and efficiency. However, it restricts delegation of the power to appoint others and to make subsidiary legislation, preserving the Authority’s control over critical decisions and legislative functions.
"No prosecution in respect of any offence under this Act may be instituted without the written consent of the Public Prosecutor." — Section 180
Verify Section 180 in source document →
Purpose: This safeguard ensures that prosecutions under the Act are subject to prosecutorial discretion, preventing frivolous or vexatious legal actions. It maintains the integrity of enforcement proceedings by requiring the Public Prosecutor’s written consent before initiating prosecution.
"Despite the Criminal Procedure Code 2010, a District Court or a Magistrate’s Court has jurisdiction to try any offence under this Act and has power to impose the full punishment for that offence." — Section 181
Verify Section 181 in source document →
Purpose: This provision clarifies that lower courts have full jurisdiction to try offences under the Act, streamlining the judicial process and enabling timely adjudication. It overrides any conflicting provisions in the Criminal Procedure Code 2010 to ensure effective enforcement of the Act’s offences.
"Where this Act provides for a person to be given an opportunity to be heard by the Authority, the Authority may prescribe the manner in which the person is to be given such opportunity to be heard." — Section 182
Verify Section 182 in source document →
Purpose: This provision guarantees procedural fairness by ensuring affected persons have an opportunity to be heard. It also grants the Authority discretion to prescribe the hearing procedures, allowing flexibility to adapt to different circumstances while upholding natural justice principles.
"The Authority may recover as a civil debt due to the Authority from the financial institution concerned — (a) the amount of any fees payable to the Authority under section 5; (b) the amount of any fees payable to the Authority under section 138; (c) the amount of any fees payable to the Authority under section 140; and (d) any remuneration and expenses payable by the financial institution concerned to — (i) a statutory adviser appointed under section 41(2); (ii) a statutory manager appointed under section 41(2); (iii) the Authority or any person appointed by the Authority under section 179 in relation to the Authority’s assumption of control of any business of the financial institution under section 41; and (iv) any person appointed to perform any independent assessment under Part 7 or 8." — Section 183
Verify Section 183 in source document →
Purpose: This provision empowers the Authority to recover fees and expenses from financial institutions as civil debts. It ensures that the costs of regulatory oversight, statutory management, and independent assessments are borne by the regulated entities, promoting accountability and financial sustainability of regulatory functions.
"The Authority may prepare and publish — (a) consolidated statements aggregating any information provided under this Act; or (b) for statistical purposes, statements that relate to or are derived from any information provided under this Act in respect of a digital token service." — Section 184(1)
Verify Section 184 in source document →
Purpose: This provision authorizes the Authority to publish aggregated or statistical information in the public interest. Transparency through publication promotes market confidence, informs stakeholders, and supports policy formulation while protecting individual confidentiality.
"Nothing in this Act requires the Minister or any public servant (including a member of an Appeal Advisory Committee deemed to be a public servant under section 14(6)(a)) to disclose facts which he or she considers to be against the interest of the public to disclose." — Section 185
Verify Section 185 in source document →
Purpose: This provision protects sensitive information from disclosure if it is deemed contrary to the public interest. It balances transparency with confidentiality and security considerations, safeguarding public and national interests.
"A document permitted or required by this Act to be served on an individual may be served — (a) by giving it to the individual personally; (b) by sending it by prepaid registered post to the address specified by the individual for the service of documents or, if no address is so specified, the individual’s residential address or business address; (c) by leaving it at the individual’s residential address with an adult apparently resident there, or at the individual’s business address with an adult apparently employed there; (d) by affixing a copy of the document in a conspicuous place at the individual’s residential address or business address; (e) by sending it by fax to the fax number last known to the person giving or serving the document as the fax number for the service of documents on the individual; or (f) by sending it by email to the individual’s last email address." — Section 186(2)
Verify Section 186 in source document →
Purpose: This provision sets out detailed and flexible methods for serving documents, ensuring effective communication and legal notice. It accommodates traditional and electronic means, reflecting modern communication practices and enhancing procedural certainty.
"The Authority may provide an electronic service for the service of any document that is required or authorised by this Act to be served on any person." — Section 187(1)
Verify Section 187 in source document →
Purpose: This provision enables the Authority to implement electronic service of documents, promoting efficiency, speed, and convenience in regulatory communications. It supports digital transformation in regulatory processes.
"For the purpose of determining whether a person is a fit and proper person in relation to this Act or any provision of this Act, the Authority may issue or adopt Guidelines on Fit and Proper Criteria." — Section 188(1)
Verify Section 188 in source document →
Purpose: This provision allows the Authority to establish objective criteria for assessing the suitability of persons involved in regulated activities. It ensures that only qualified and trustworthy individuals participate in the financial sector, protecting market integrity and consumers.
"The Authority may, by regulations, exempt — (a) any person or class of persons from this Act or any provision of this Act; and (b) any of the following from all or any of the provisions of Part 9: (i) any digital token service or class of digital token services; (ii) any shares or interests in shares, or class or description of shares or interests in shares; (iii) any other thing or class or description of things, subject to such conditions or restrictions as may be prescribed." — Section 189(1)
Verify Section 189 in source document →
Purpose: This provision grants the Authority discretion to exempt persons or classes from certain provisions, allowing regulatory flexibility and responsiveness to evolving market conditions. Conditions or restrictions may be imposed to mitigate risks associated with exemptions.
"The Minister may from time to time, by order in the Gazette, amend, add to or vary the First, Second or Third Schedule." — Section 190(1)
Verify Section 190 in source document →
Purpose: This provision empowers the Minister to update the Schedules attached to the Act, ensuring that the regulatory framework remains current and adaptable to changes in the financial sector.
"The Minister may make regulations for, or in respect of, any appeal to the Minister mentioned in sections 4(6), 7(5), 9(5), 34, 48(6), 55(1), 142, 154 and 157." — Section 191(1)
Verify Section 191 in source document →
Purpose: This provision allows the Minister to prescribe procedures for appeals under various sections of the Act, ensuring a structured and fair appeal process for aggrieved parties.
"Except as otherwise expressly provided in this Act, the Authority may make regulations prescribing matters required or permitted by this Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to this Act." — Section 192(1)
Verify Section 192 in source document →
Purpose: This provision confers broad regulatory-making powers on the Authority, enabling it to fill in details and implement the Act effectively through subsidiary legislation, including offences and penalties.
Definitions in This Part
Clear definitions are essential for legal certainty and effective application of the Act. The following key terms are defined to facilitate interpretation and implementation:
"In this section — 'business address' means — (a) in the case of an individual, the individual’s usual or last known place of business, or place of employment, in Singapore; or (b) in the case of a partnership (other than a limited liability partnership), the principal or last known place of business in Singapore of the partnership; 'document' includes a notice or an order permitted or required by this Act to be served; 'last email address' means — (a) the last email address given, by the addressee concerned to the person giving or serving the document, as the email address for the service of documents under this Act; or (b) the last email address of the addressee concerned known to the person giving or serving the document; 'residential address' means an individual’s usual or last known place of residence in Singapore." — Section 186(8)
Purpose: These definitions clarify the locations and contact details relevant for service of documents, ensuring that notices and orders reach the intended recipients effectively.
"'account with the electronic service', in relation to any person, means a computer account within the electronic service that is assigned by the Authority to the person for the storage and retrieval of electronic records relating to the person; 'authentication code', in relation to any person, means an identification or identifying code, a password or any other authentication method or procedure that is assigned to the person for the purposes of identifying and authenticating the access to and use of the electronic service by the person; 'document' includes a notice and an order; 'electronic record' has the meaning given by section 2(1) of the Electronic Transactions Act 2010." — Section 187(4)
Verify Section 187 in source document →
Purpose: These definitions support the electronic service of documents by defining technical terms related to electronic accounts and authentication, ensuring secure and reliable digital communication.
Penalties for Non-Compliance
The Act prescribes penalties to enforce compliance and deter violations. These penalties vary depending on the nature of the offence and the offender’s status (individual or other entities):
"A person who contravenes any condition or restriction — (a) prescribed under subsection (1); (b) specified by the Authority under subsection (5); or (c) added to or varied under subsection (2) or (6), shall be guilty of an offence and shall be liable on conviction — (d) in the case of an individual, to a fine not exceeding $50,000; or (e) in any other case, to a fine not exceeding $100,000." — Section 189(8)
Verify Section 189 in source document →
Purpose: This provision penalizes breaches of conditions or restrictions related to exemptions, ensuring that exemptions are not abused and that regulatory objectives are maintained.
"Except as otherwise expressly provided in this Act, regulations made by the Authority under this Act — (a) may be of general or specific application; (b) may contain such saving and transitional provisions as the Authority may consider necessary or expedient; (c) may provide that a contravention of any specified provision of the regulations shall be an offence; and (d) may provide — (i) in the case of an individual, for penalties not exceeding a fine of $50,000 or imprisonment for a term not exceeding 2 years or both for each offence and, in the case of a continuing offence, a further penalty not exceeding a fine of $5,000 for every day or part of a day during which the offence continues after conviction; and (ii) in any other case, for penalties not exceeding a fine of $100,000 and, in the case of a continuing offence, a further penalty not exceeding a fine of $10,000 for every day or part of a day during which the offence continues after conviction." — Section 192(2)(c) and (d)
Verify Section 192 in source document →
Purpose: This provision empowers the Authority to create regulations that include offences and penalties, providing a flexible enforcement mechanism. The tiered penalties reflect the seriousness of offences and the need to deter ongoing violations.
Cross-References to Other Acts
The Act incorporates references to other legislation to ensure coherence and integration within Singapore’s legal framework:
"… any company which is deemed to be related to that company by virtue of section 6 of the Companies Act 1967 either generally or for a particular purpose inside or outside Singapore." — Section 178(d)
Verify Section 178 in source document →
Purpose: This cross-reference defines related companies for the purposes of agency arrangements, ensuring consistency with corporate law.
"Any person appointed under subsection (1) or officer appointed under subsection (2) is taken to be a public servant for the purposes of the Penal Code 1871." — Section 179(3)
Verify Section 179 in source document →
Purpose: This provision clarifies that persons appointed by the Authority are public servants under the Penal Code, subjecting them to relevant criminal law protections and obligations.
"Despite the Criminal Procedure Code 2010, a District Court or a Magistrate’s Court has jurisdiction to try any offence under this Act and has power to impose the full punishment for that offence." — Section 181
Verify Section 181 in source document →
Purpose: This provision ensures that the Act’s offences are tried in appropriate courts, overriding conflicting procedural rules in the Criminal Procedure Code 2010.
"'electronic record' has the meaning given by section 2(1) of the Electronic Transactions Act 2010." — Section 187(4)
Verify Section 187 in source document →
Purpose: This definition aligns the Act’s use of electronic records with the established legal meaning under the Electronic Transactions Act 2010, promoting legal certainty in electronic communications.
Conclusion
The Financial Services and Markets Act 2022 provides a robust legal framework empowering the Authority to regulate financial services effectively. Its provisions balance regulatory oversight, procedural fairness, transparency, and enforcement powers. The Act’s detailed definitions, penalty structures, and cross-references to other legislation ensure clarity and coherence in application. Collectively, these provisions safeguard the integrity and stability of Singapore’s financial sector while accommodating technological advancements and international cooperation.
Sections Covered in This Analysis
- Section 178 – Establishment of Agencies and Agents
- Section 179 – Appointment of Assistants
- Section 180 – Consent of Public Prosecutor for Prosecution
- Section 181 – Jurisdiction of Courts
- Section 182 – Opportunity to be Heard
- Section 183 – Recovery of Fees and Expenses
- Section 184 – Publication of Information
- Section 185 – Disclosure of Information
- Section 186 – Service of Documents
- Section 187 – Electronic Service
- Section 188 – Guidelines on Fit and Proper Criteria
- Section 189 – Exemptions and Penalties
- Section 190 – Amendment of Schedules
- Section 191 – Regulations for Appeals
- Section 192 – Power to Make Regulations and Penalties
Source Documents
For the authoritative text, consult SSO.