Sat, Sep 07, 2019 – 5:50 AM
WHILE evolving regulations have made it easier for financial technology (fintech) firms to do business in Singapore, they have also made compliance with the regulations more complex for these firms.
And finding law firms that specialise in regulations on specific fintech domains has added to the challenges these payment firms face.
For example, fintechs need advice from law firms in areas such as payments, capital markets and, more recently, digital banking, said Singapore Fintech Association president Chia Hock Lai.
Things promise to get better.
The Monetary Authority of Singapore (MAS) and the Singapore Academy of Law (SAL) have rolled out a pilot programme to connect fintechs with legal service providers, in a move expected to enhance Singapore’s appeal as a fintech hub.
Help for the fintechs under the Payments Regulatory Evaluation Programme (PREP) comes in the form of a standard questionnaire to be filled out about the nature of their business in Singapore.
Upon submission of this questionnaire, a fintech can engage a law firm from among what is now a list of seven participating legal firms.
The fintech can also expect to receive a customised assessment report on the regulations applicable to its business.
So, instead of relying on informal referrals, PREP provides payment firms with a streamlined path to lawyers specialising in payment-services regulations, so they can get advice on their compliance needs, said the MAS and SAL in a joint statement on Friday.
Fintechs “can also be assured that the regulatory assessment conducted by the legal service provider will be sufficiently comprehensive in scope”, said the statement.
The programme, which will be officially launched in November, expects more law firms with expertise in payment-services regulations on board later.
Singapore Fintech Association’s Mr Chia told The Business Times that while getting relevant legal expertise is not the biggest barrier to entry to the Singapore fintech space, he thinks the programme by the MAS and SAL will enhance the overall attractiveness of Singapore as a fintech hub, especially in terms of navigating the complex regulations.
The Singapore Fintech Association is a cross-industry, non-profit initiative, intended as a platform to facilitate collaboration between all market participants and stakeholders in the fintech ecosystem.
Among the seven local and international law firms in Singapore who are in the pilot run of the programme is Allen & Gledhill.
Adrian Ang, the firm’s partner and co-head of fintech practice, said the programme represents a natural evolution in the fintech/payments regulatory space and ensures that fintech players are aware of the full range of legal issues they will need to grapple with.
The lawyer told BT that in the earlier days of the fintech industry, he had come across fintechs seeking legal advice only when they were a week or two from launching their product or service.
“Often, a licence would be required and the grant of a licence would involve a rigorous process lasting a few months. These fintech players invariably had to postpone their launch plans,” he said.
The fintech industry has matured in the last few years, and players generally understand the importance of seeking legal advice and allocating sufficient lead time to address licensing and regulatory concerns, he added.
Following the pilot run, the organisers will gather feedback and tweak the programme where necessary before its launch at the Singapore Fintech Festival in November.
It will also throw an invitation to law firms in Singapore to join the programme.
SAL chief operating officer Paul Neo said: “The evolution of payment services regulations is an important aspect of Singapore’s development as a fintech hub.
“As a promotion and development agency for Singapore’s legal sector, we want to give our legal professionals the opportunity to showcase their expertise in the fintech space…
“In time to come, we hope our lawyers will develop legal tech solutions in the regulatory and compliance tech fields to complement their legal advisory services to the payments industry.”
MAS chief fintech officer Sopnendu Mohanty said that Singapore’s vibrant fintech ecosystem and strong regulatory environment have attracted substantial interest from foreign and local firms to set up their payment-services business in Singapore.
The regulator developed the programme to ensure that payment firms that want to engage legal services to support them in their business can do so easily and quickly.
Besides Allen & Gledhill, the law firms in the pilot run are Amica Law, Bird & Bird ATMD, Clifford Chance, Baker McKenzie Wong & Leow, Collyer Law and Linklaters Singapore.
- For more information, visit https://www.sal.org.sg/Resources-Tools/Payment-Regulatory-Evaluation-Program-PREP/About-PREP