Prevention of Proliferation Financing and Other Matters Bill passed to align regulatory regimes for PSMD, moneylending, and pawnbroking sectors with updated FATF requirements

28 February 2024

On 6 February 2024, the Prevention of Proliferation Financing and Other Matters Bill (“Bill”) was passed in Parliament. The Bill will:

clearly align the regulatory regimes for the precious stones and precious metals dealers (“PSMD”), moneylending, pawnbroking, and legal services sectors with updated Financial Action Task Force (“FATF”) requirements;
strengthen the regulatory regime for PSMDs; and
improve operational effectiveness in regulating PSMDs.

The changes will come into operation on a date to be appointed by notification in the Gazette.

In her speech at the second reading of the Bill, Senior Parliamentary Secretary Rahayu Mahzam provided an overview of the key features of the Bill.

Alignment with updated FATF standards

The Bill updates the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019 (“PSPM Act”), the Moneylenders Act 2008, the Pawnbrokers Act 2015, and the Legal Profession Act 1966 to:

clearly align the regulatory regime for the PSMD, moneylending, pawnbroking, and legal services sectors with the updated FATF standards; and
require businesses or persons covered by these Acts to implement adequate measures to counter proliferation financing.

Examples of required measures include performing risk assessment, and developing and implementing internal policies, procedures, and controls to counter proliferation financing.

In addition, the controls in the Moneylenders Act 2008 and the Pawnbrokers Act 2015 against criminals owning or managing moneylending and pawnbroking businesses will be strengthened, in line with the FATF recommendations. In particular, persons convicted of offences relating to the prevention of financial crimes will be prevented from obtaining relevant licences or holding management functions in moneylending and pawnbroking businesses.

Strengthening the regulatory regime for PSMDs

The Bill strengthens the regulatory regime for PSMDs through amendments to the PSPM Act by:

amending the definition of “precious product” to also cover any “precious product” priced above a prescribed value, which will be set at S$20,000, regardless of the value attributable to the PSPM, in order to include products with majority of value attributed to other factors not currently captured, such as branding or workmanship;
amending the existing definition of “asset-backed token” to exclude digital payment tokens from the PSPM Act, as the Monetary Authority of Singapore already regulates digital payment token service providers under the Payment Services Act 2019;
introducing a new offence in the PSPM Act for regulated dealers that submit incomplete or inaccurate cash transaction reports without reasonable excuse;
making it clear that compliance officers appointed by PSMDs must be assessed by the Registrar of Regulated Dealers (“Registrar”) to be “fit and proper” persons; and
introducing a record-keeping requirement for regulated dealers to keep records, for a prescribed period after ceasing to be a regulated dealer, and empowering the Registrar to continue regulatory action against former registered PSMDs.

Improving operational effectiveness in regulating PSMDs

The Bill amends the PSPM Act to improve operational effectiveness in regulating PSMDs by:

allowing the Registrar to cancel or suspend the registration of PSMDs that are not conducting regulated dealing and/or fall under prescribed circumstances;
providing that the registration of a registered PSMD lapses if the PSMD is wound up or otherwise dissolved (in the case of an entity) or dies (in the case of a sole proprietor); and
prescribing methods of service of documents required or authorised by the PSPM Act to be served on any person.

Reference materials

The following materials are available on the Parliament website www.parliament.gov.sg and the Ministry of Law website www.mlaw.gov.sg: