SVF Legislation

SVF Laws & Regulations

SVFs are regulated by the Payment Systems Oversight Act 2006 (PSOA). An SVF may be of single purpose or multi-purpose.  A single purpose SVF is an SVF that is used for payment only of goods or services provided by the SVF itself. Single purpose SVFs are exempt from certain sections of the PSOA. A multi-purpose SVF is not limited to payments of goods or services provided by the SVF itself.

 

The Monetary Authority of Singapore (MAS) has issued a guide with recommendations for SVF operation that can be accessed here:

 

MAS Stored Value Facility Guidelines

 

The MAS guidelines include for example maximum account limits of $1000, or maximum bulk-loads of $20,000. It should be noted that an SVF is not in any way restricted from exceeding these limits, but by doing so the SVF will be required to comply with AML regulations. This would include requirements to identify the customers of the SVF. Such requirements comply with international standards for AML and KYC regulations and would apply in any other well regulated jurisdiction.

 

Below we include Part VII from the Payments Systems Oversight Act:

 

 

PART VII 

STORED VALUE FACILITIES

 

Provision of information to Authority

 

29.—(1)  The Authority may, by notice in the form and manner prescribed, require any holder of a stored value facility to provide to the Authority, within a reasonable period specified in the notice, all such information relating to the stored value facility as may be required by the Authority.

 

(2)  Without prejudice to the generality of subsection (1), the Authority may in a notice issued under that subsection, require any holder to provide, whether in the form of a return to be provided on a periodic basis or otherwise —

 

(a) information relating to the amount of money received for the stored value facility;

(b) information relating to the number of users of the stored value facility; and

(c) such other information as the Authority may require for the purposes of this Act.

 

(3)  Subject to subsection (5), any holder to whom a notice is issued under subsection (1) shall comply with the notice.

 

(4)  Any holder who fails to comply with a notice issued under subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 2 years or to both and, in the case of a continuing offence, to a further fine not exceeding $10,000 for every day or part thereof during which the offence continues after conviction.

 

(5)  A holder to whom a notice is issued under subsection (1) shall not be obliged to disclose any information where he is prohibited by any written law from disclosing such information.

 

Labelling, etc., of stored value facility

30.  The Authority may by regulations made under section 56 impose requirements for securing that stored value facilities, other than widely accepted stored value facilities, be marked or labelled with or accompanied by any statement relating to such matters as may be prescribed.

 

Restriction on soliciting

31.—(1)  No person outside Singapore shall, whether by himself or through any person in Singapore, offer or invite, or issue any advertisement containing any offer or invitation to the public or any section of the public in Singapore to purchase or otherwise acquire a stored value facility or the value stored in a stored value facility, whether in Singapore or elsewhere.

 

(2)  For the purposes of subsection (1), in determining whether an offer, invitation or advertisement is made or issued to the public or any section of the public in Singapore, regard shall be had to such considerations as the Authority may prescribe.

 

(3)  Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction —

 

(a) in the case of an individual, to a fine not exceeding $125,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $12,500 for every day or part thereof during which the offence continues after conviction; or

 

(b) in any other case, to a fine not exceeding $250,000 and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part thereof during which the offence continues after conviction.

 

(4)  Any person in Singapore who, on behalf of a person outside Singapore, offers or invites, or issues any advertisement containing any offer or invitation to, the public or any section of the public in Singapore to purchase or otherwise acquire a stored value facility or the value stored in the facility, whether in Singapore or elsewhere, shall be guilty of an offence and shall be liable on conviction —

 

(a) in the case of an individual, to a fine not exceeding $125,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $12,500 for every day or part thereof during which the offence continues after conviction; or

 

(b) in any other case, to a fine not exceeding $250,000 and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part thereof during which the offence continues after conviction.

 

(5)  A person whose business it is to publish or to arrange for the publication of advertisements shall not be guilty of an offence under subsection (3) or (4) if he proves that —

(a) he received the advertisement for publication in the ordinary course of his business;

(b) the matters contained in the advertisement were not, wholly or in part, devised or selected by him or by any person under his direction or control; and

(c) he did not know and had no reason for believing that the publication of the advertisement would constitute an offence.

 

Prohibition on holding out as approved holder

32.—(1)  No person, other than a person who has obtained the approval of the Authority under section 35(1), shall hold himself out as an approved holder of a widely accepted stored value facility.

 

(2)  Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 2 years or to both and, in the case of a continuing offence, to a further fine not exceeding $10,000 for every day or part thereof during which the offence continues after conviction.

 

Holding of stored value exceeding prescribed limit

33.—(1)  No person shall directly or indirectly, alone or together with any person over whom he has control or influence, hold stored value in stored value facilities, other than —

(a) widely accepted stored value facilities; and

(b) stored value facilities or classes of stored value facilities excluded under subsection (2)(b),

in excess of $30 million.

 

(2)  The Authority may by order published in the Gazette —

(a) vary the amount of stored value specified in subsection (1); or

(b) exclude such stored value facility or class of stored value facilities from being included in the computation of the stored value for the purposes of subsection (1) as the Authority thinks fit.

 

(3)  For the purposes of subsection (1), the Authority may prescribe the circumstances in which a person shall be deemed to be under the control or influence of another person.

 

(4)  Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.

 

Application for approval

34.—(1)  A holder of a stored value facility may apply to the Authority for approval as an approved holder in respect of that stored value facility.

 

(2)  An application under subsection (1) shall be —

(a) in such form and manner as the Authority may require; and

(b) accompanied by an application by a bank in Singapore for approval to be an approved bank.

 

(3)  The Authority may require an applicant to furnish it with such information or documents as the Authority considers necessary in relation to the application.

 

Power of Authority to approve holders and banks

35.—(1)  Where, in relation to a stored value facility, a holder has made an application under section 34(1) and a bank in Singapore has made an application under section 34(2)(b), the Authority may approve —

(a) the holder as an approved holder in respect of that stored value facility; and

(b) the bank as an approved bank in respect of that stored value facility if the Authority is satisfied that the bank has undertaken to be fully liable for the stored value of that stored value facility,

subject to such conditions or restrictions as the Authority thinks fit.

 

(2)  The Authority shall not grant approval to the holder under subsection (1) unless the Authority has approved a bank in Singapore to be an approved bank in respect of the stored value facility concerned.

 

(3)  The Authority may, at any time, by notice in writing to an approved holder or approved bank, vary or revoke any condition or restriction or attach such further conditions or restrictions.

 

(4)  The approval granted by the Authority to the approved holder or approved bank shall remain valid notwithstanding that the stored value does not exceed $30 million or such other amount as the Authority may vary under section 33(2).

 

(5)  The Authority shall not refuse to approve a holder as an approved holder or a bank as an approved bank without giving the holder or the bank, as the case may be, an opportunity to be heard.

 

(6)  An applicant who is aggrieved by a refusal of the Authority to grant approval under subsection (1) may, within 30 days after the applicant is notified of the decision, appeal in writing to the Minister whose decision shall be final.

 

(7)  Notwithstanding the lodging of an appeal under subsection (6), any action taken by the Authority under this Act shall continue to have effect pending the decision of the Minister.

 

(8)  The Minister may, when deciding an appeal under subsection (6), make such modification as he considers necessary to any action taken by the Authority, and such modified action shall have effect from the date of the decision of the Minister.

 

(9)  The Authority shall cause notice to be published in the Gazette where approval is given to a person to be an approved holder.

 

(10)  An approved holder or approved bank which contravenes any of the conditions or restrictions imposed under subsection (1) or (3) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction.

 

Power of Authority to issue written directions

36.—(1)  The Authority may issue written directions, either of a general or specific nature, to an approved holder or approved bank if the Authority thinks it is necessary or expedient for ensuring the integrity of the stored value of the widely accepted stored value facility concerned.

 

(2)  Without prejudice to the generality of subsection (1), a written direction issued under that subsection may relate to the obligations of the approved holder or approved bank to the users of a widely accepted stored value facility.

 

(3)  An approved holder or approved bank to which a written direction is issued under this section shall comply with the direction.

 

(4)  An approved holder or approved bank that fails to comply with a written direction issued under subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 and, in the case of a continuing offence, to a further fine not exceeding $10,000 for every day or part thereof during which the offence continues after conviction.

 

Cancellation of approval

37.—(1)  An approved holder may apply to the Authority to cancel the approval granted to him under section 35(1).

 

(2)  An approved bank may apply to the Authority to cancel the approval granted to it under section 35(1).

 

(3)  The Authority may prescribe or specify in written directions such factors that the Authority may consider relevant in determining whether to cancel the approval granted to approved holders or approved banks.

 

(4)  Any cancellation under this section of approval granted to the approved holder or approved bank shall not operate so as to —

(a) avoid or affect any agreement, transaction or arrangement entered into by the holder or bank for which approval is cancelled, whether the agreement, transaction or arrangement was entered into before or after the cancellation of the approval; or

(b) affect any right, obligation or liability arising under such agreement, transaction or arrangement.

 

Revocation of approval

38.—(1)  The Authority may revoke any approval of a holder as an approved holder if the Authority is satisfied that —

(a) the holder has contravened any condition or restriction imposed by the Authority under this Act;

(b) the Authority has cancelled the approval to the approved bank under section 37(2); or

(c) the Authority considers it appropriate to do so.

 

(2) The Authority may revoke any approval of a bank in Singapore as an approved bank if the Authority is satisfied that —

(a) the bank has contravened any condition or restriction imposed by the Authority under this Act;

(b) the Authority has cancelled the approval to the approved holder under section 37(1); or

(c) the Authority considers it appropriate to do so.

 

(3)  Subject to subsection (4), the Authority shall not revoke the approval that was granted to a holder or bank in Singapore under section 35(1) without giving the holder or bank, as the case may be, an opportunity to be heard.

 

(4)  The Authority may revoke an approval that was granted to a holder or bank in Singapore under section 35(1) in any of the following circumstances without giving the holder or bank, as the case may be, an opportunity to be heard:

 

(a) the holder or bank is in the course of being wound up or otherwise dissolved, whether in Singapore or elsewhere;

 

(b) a receiver, a receiver and manager or an equivalent person has been appointed, whether in Singapore or elsewhere, in relation to or in respect of any property of the holder or bank;

 

(c) the holder or bank has been convicted, whether in Singapore or elsewhere, of an offence involving fraud or dishonesty or the conviction for which involved a finding that he or it had acted fraudulently or dishonestly.

 

(5)  A holder or bank in Singapore that is aggrieved by the decision of the Authority to revoke the approval under subsection (1) or (2) may, within 30 days after the holder or bank, as the case may be, is notified of the decision, appeal in writing to the Minister whose decision shall be final.

 

(6)  Any revocation of approval granted to the approved holder or approved bank under this section shall not operate so as to —

(a) avoid or affect any agreement, transaction or arrangement entered into by the holder or bank for which approval is revoked, whether the agreement, transaction or arrangement was entered into before or after the revocation of the approval; or

(b) affect any right, obligation or liability arising under such agreement, transaction or arrangement.

 

Publication of list of widely accepted stored value facilities

39.  The Authority shall, from time to time, prepare and publish in the Gazette a list of all widely accepted stored value facilities, their respective approved holders and approved banks, and the dates of approval.

 

Section 14 of Currency Act not to apply to stored value facilities

40.  Section 14 of the Currency Act (Cap. 69) shall not apply to the issue of a stored value facility.

 

 

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