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The Monetary Authority of Singapore (MAS) has announced the expansion of its Fair Dealing Guidelines, to include all financial institutions under its regulatory ambit. These guidelines previously only applied to the selection, marketing and distribution of investment products.
How does this change things?
Payment service providers licensed in Singapore must ensure their boards and senior management put in place cultural changes, governance structures, policies and processes to meet the MAS’ five fair dealing outcomes. These are:
- Customers have confidence that they deal with financial institutions where fair dealing is central to the corporate culture.
- Financial institutions offer products and services that are suitable for their target customer segments.
- Customers are served by competent representatives.
- Customers receive clear, relevant and timely information that accurately represents the products and services offered and delivered.
- Financial institutions handle customer complaints in an independent, effective and prompt manner.
The guidelines, in addition to providing a breakdown of these principles, also provide examples of good and poor practice. Payment service providers will need to take note of this when answering the self assessment questions provided in the guidelines.
The bigger picture
The expansion of the ambit of these guidelines represents the latest in the series of legislative reforms that Singapore has been taking to its financial regulatory regime since the last quarter of 2023, the vast majority of which have been aimed at protecting consumers at both a personal and institutional level.
In addition to these guidelines, firms in Singapore have already had to implement new outsourcing guidelines and the implementation of the second stage of Singapore’s FSMA act, which included changes to regulation regarding cyber security and technology risk management. It also introduced a new licensing regime for crypto providers and provisions for setting up dispute resolution schemes.
Why should you care?
On a global level, the introduction of these fair dealing guidelines represents a trend of regulators requiring firms to take steps to ensure consumers are treated fairly — not only when buying investment related products but with all dealings with financial institutions. This includes the UK’s introduction of its flagship Consumer Duty instrument, which firms must implement by July 2024 for all product offerings, and Malaysia’s introduction of similar Fair Dealing Guidelines in March 2024.
This expansion is unsurprising given the increasingly blended nature of financial products on the market. Looking at the South East Asian region in particular, where the rise of superapps (the default payment method for millions of consumers) has resulted in a corresponding increase in the availability of investment and lending instruments to consumers, it is no wonder that the region’s most proactive regulators are starting to take notice. It only remains to be seen how many other regulators follow suit.
