§ 23 — Safeguarding of money received from customer

23.—(1) Subsection (2) applies to —(a)

every major payment institution that carries on a business of providing any of the following payment services:(i)

a domestic money transfer service;

(ii)

a cross‑border money transfer service;

(iii)

a merchant acquisition service;

(b)

any prescribed major payment institution in respect of a prescribed payment service (other than a payment service mentioned in paragraph (a)(i), (ii) or (iii)); and

(c)

any prescribed licensee (other than a major payment institution) in respect of a prescribed payment service.[Act 1 of 2021 wef 04/04/2024]

(2) A major payment institution or licensee mentioned in subsection (1) must ensure that no later than the next business day after any relevant money is received from, or on account of, a customer, the whole or such part, as may be prescribed, of the relevant money, is safeguarded in one of the following manners:(a)

by an undertaking, from a safeguarding institution, to be fully liable to the customer for the relevant money;

(b)

by a guarantee given by a safeguarding institution for the amount of the relevant money;

(c)

by depositing the relevant money in a trust account maintained with a safeguarding institution;

(d)

in such other manner as may be prescribed.[Act 1 of 2021 wef 04/04/2024]

(3) Subsection (4) applies to —(a)

every major payment institution that carries on a business of providing an e‑money issuance service;

(b)

any prescribed major payment institution in respect of a prescribed payment service (other than a payment service mentioned in paragraph (a)); and

(c)

any prescribed licensee (other than a major payment institution) in respect of a prescribed payment service.[Act 1 of 2021 wef 04/04/2024]

(4) A major payment institution or licensee mentioned in subsection (3) must ensure that from the time any relevant money is received from, or on account of, a customer, the whole or such part, as may be prescribed, of the relevant money is safeguarded in one of the following manners:(a)

by an undertaking, from a safeguarding institution, to be fully liable to the customer for the relevant money;

(b)

by a guarantee given by a safeguarding institution for the amount of the relevant money;

(c)

by depositing the relevant money in a trust account maintained with a safeguarding institution;

(d)

in such other manner as may be prescribed.[Act 1 of 2021 wef 04/04/2024]

(5) The Authority may make regulations under section 103 to provide for all or any of the following matters:(a)

any matter concerning the safeguarding of relevant money under subsection (2) or (4) by any safeguarding institution;

(b)

any matter concerning the depositing of relevant money in a trust account mentioned in subsection (2)(c) or (4)(c), including —(i)

any matter concerning the trust governing the account;

(ii)

the extent (if any) to which the relevant money may be commingled with any other money;

(iii)

the manner in which the relevant money must be treated and dealt with, despite any other written law, on the occurrence of either or both of the following:(A)

any event affecting the ability of the major payment institution or licensee to which subsection (2) or (4) applies to perform its obligations, such as in the event of the insolvency of the major payment institution or licensee;[Act 1 of 2021 wef 04/04/2024]

(B)

any event affecting the ability of the safeguarding institution to perform its obligations, such as in the event of the insolvency of the safeguarding institution; and

(iv)

the circumstances (if any) in which a major payment institution or licensee to which subsection (2) or (4) applies may withdraw money from the account;[Act 1 of 2021 wef 04/04/2024]

(c)

any matter concerning the safeguarding of relevant money in any manner mentioned in subsection (2)(d) or (4)(d), including —(i)

the extent (if any) to which a major payment institution or licensee to which subsection (2) or (4) applies may commingle the relevant money with any other money;[Act 1 of 2021 wef 04/04/2024]

(ii)

the manner in which the relevant money must be treated and dealt with, despite any other written law, on the occurrence of any event affecting the ability of the major payment institution or licensee to which subsection (2) or (4) applies to perform its obligations, such as in the event of the insolvency of the major payment institution or licensee; and[Act 1 of 2021 wef 04/04/2024]

(iii)

where the relevant money is safeguarded by being deposited in an account (other than a trust account mentioned in subsection (2)(c) or (4)(c)), the circumstances (if any) in which the major payment institution or licensee to which subsection (2) or (4) applies may withdraw any money from that account;[Act 1 of 2021 wef 04/04/2024]

(d)

the obligations of a major payment institution or licensee to which subsection (2) or (4) applies to record and maintain a separate book entry for each customer, in relation to that customer’s relevant money and, where applicable, e‑money and digital payment tokens;[Act 1 of 2021 wef 04/04/2024]

(e)

the obligations of a safeguarding institution that must be set out in a contract between a major payment institution or licensee to which subsection (2) or (4) applies and the safeguarding institution;[Act 1 of 2021 wef 04/04/2024]

(f)

the form of acknowledgment that a major payment institution or licensee to which subsection (2) or (4) applies must obtain from a safeguarding institution;[Act 1 of 2021 wef 04/04/2024]

(g)

the information that a major payment institution or licensee to which subsection (2) or (4) applies must provide to a safeguarding institution, including the date or time by which any relevant money must be safeguarded;[Act 1 of 2021 wef 04/04/2024]

(h)

the manner in which a major payment institution or licensee to which subsection (2) or (4) applies conducts its dealings with a customer for the purposes of safeguarding the customer’s relevant money, including the disclosure of any information to the customer;[Act 1 of 2021 wef 04/04/2024]

(i)

any other matters relating to this section.

(6) Despite any other written law, where subsection (2)(b) or (4)(b) applies, the proceeds of the guarantee are payable, in the event of the insolvency of the major payment institution or licensee to which subsection (2) or (4) applies, into a separate trust account held by the major payment institution or licensee (as the case may be), which —(a)

must be designated in such a way as to show that it is an account held for the purpose of safeguarding the relevant money in accordance with this section; and

(b)

must be used only for holding such proceeds on trust for each customer that had provided the relevant money to the major payment institution or licensee (as the case may be).[Act 1 of 2021 wef 04/04/2024]

[Act 1 of 2021 wef 04/04/2024]

(7) All moneys deposited in an account mentioned in subsection (2)(c), (4)(c), (5)(b) or (c)(iii) or (6) —(a)

cannot be used for the payment of the debts of the major payment institution or licensee to which subsection (2) or (4) applies; and[Act 1 of 2021 wef 04/04/2024]

(b)

are not liable to be taken under or pursuant to an enforcement order or a process of any court.[Act 25 of 2021 wef 01/04/2022]

(8) The Authority may, on the application of any person, by written notice grant approval, subject to such conditions as the Authority may specify in the notice, to any major payment institution or licensee to which subsection (2) or (4) applies to safeguard any relevant money in 2 or more of the manners mentioned in subsection (2)(a) to (d) or (4)(a) to (d).[Act 1 of 2021 wef 04/04/2024]

(9) A major payment institution or licensee to which subsection (2) or (4) applies must notify the Authority, in such form or manner as the Authority may specify by written notice, of —(a)

the manner mentioned in subsection (2)(a) to (d) or (4)(a) to (d) that the major payment institution or licensee (as the case may be) has chosen to safeguard the relevant money;[Act 1 of 2021 wef 04/04/2024]

(b)

the name of the safeguarding institution (if any) that will safeguard the relevant money in the manner mentioned in paragraph (a); and

(c)

any change to the manner mentioned in paragraph (a) that the major payment institution or licensee (as the case may be) has chosen to safeguard the relevant money.[Act 1 of 2021 wef 04/04/2024]

[Act 1 of 2021 wef 04/04/2024]

(10) Where the major payment institution or licensee to which subsection (2) or (4) applies is any of the following financial institutions, the major payment institution or licensee (as the case may be) must not concurrently be the safeguarding institution mentioned in paragraph (a) or (b) of the applicable subsection in relation to the relevant money received by the major payment institution or licensee (as the case may be) under the applicable subsection:(a)

a bank licensed under the Banking Act 1970;

(b)

a merchant bank licensed under the Banking Act 1970;

(c)

a finance company licensed under the Finance Companies Act 1967;

(d)

any other financial institution that may be prescribed.[1/2020]

[Act 1 of 2021 wef 04/04/2024]

(11) A major payment institution or licensee mentioned in subsection (1) that contravenes subsection (2), (9) or (10), or fails to comply with any condition imposed under subsection (8), shall be guilty of an offence and shall be liable on conviction 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 of a day during which the offence continues after conviction.[Act 1 of 2021 wef 04/04/2024]

(12) A major payment institution or licensee mentioned in subsection (3) that contravenes subsection (4), (9) or (10), or fails to comply with any condition imposed under subsection (8), shall be guilty of an offence and shall be liable on conviction 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 of a day during which the offence continues after conviction.[Act 1 of 2021 wef 04/04/2024]

(13) [Deleted by Act 1 of 2021 wef 04/04/2024]

(14) In this section —“business day” means any day other than a Saturday, Sunday, public holiday or bank holiday;

“relevant money” —(a)

means any money —(i)

that is received —(A)

by a major payment institution from, or on account of, a customer in respect of any payment service mentioned in subsection (1)(a)(i), (ii) or (iii) or (3)(a);

(B)

by a major payment institution prescribed for the purposes of subsection (1)(b) or (3)(b) from, or on account of, a customer in respect of any payment service prescribed in respect of the major payment institution; or

(C)

by a licensee prescribed for the purposes of subsection (1)(c) or (3)(c) from, or on account of, a customer in respect of any payment service prescribed in respect of the licensee; and

(ii)

that the major payment institution or licensee (as the case may be) —(A)

where subsections (1) and (2) apply — continues to hold at the end of each business day; or

(B)

where subsections (3) and (4) apply — has held at any time and (in the case of an e-money issuance service) has issued specified e‑money in exchange for; but

(b)

does not include all of the following:(i)

any money paid to the major payment institution or licensee (as the case may be) to reduce the amount owed to the major payment institution or licensee (as the case may be) by a customer;

(ii)

any money that is repaid by the major payment institution or licensee (as the case may be) to a customer;

(iii)

any money which is paid to the major payment institution or licensee (as the case may be), or which the major payment institution or licensee has informed a customer will be used, to defray any fee or charge imposed by the major payment institution or licensee for providing any payment service to a customer;

(iv)

where a major payment institution or licensee carries on a business of providing a domestic money transfer service, a merchant acquisition service or an e-money issuance service, any money that is paid to, and received by, a recipient in accordance with instructions given by a customer of the major payment institution or licensee (as the case may be) to the major payment institution or licensee;

(v)

where a major payment institution or licensee carries on a business of providing a cross-border money transfer, any money that is paid by the major payment institution or licensee (as the case may be) in accordance with instructions given by a customer of the major payment institution or licensee (as the case may be) to the major payment institution or licensee, whether or not the recipient has received that money;

(vi)

any money paid to any other person that is entitled to the money;[Act 1 of 2021 wef 04/04/2024]

“safeguarding institution” means —(a)

in the case of subsections (2)(a) and (4)(a) —(i)

a bank in Singapore; or

(ii)

any other financial institution that may be prescribed for this sub‑paragraph;

(b)

in the case of subsections (2)(b) and (4)(b) —(i)

a bank in Singapore; or

(ii)

any other financial institution that may be prescribed for this sub‑paragraph;

(c)

in the case of subsections (2)(c) and (4)(c), a person that the trust account mentioned in subsection (2)(c) or (4)(c) (as the case may be) is maintained with, being a person that satisfies such criteria as may be prescribed;

(d)

in any case where any relevant money is safeguarded in such manner as may be prescribed for the purposes of subsection (2)(d) or (4)(d), a person safeguarding the relevant money in that manner, being a person that satisfies such criteria as may be prescribed; or

(e)

in any other case, any bank in Singapore or financial institution mentioned in paragraph (a) or (b) or any person mentioned in paragraph (c) or (d).

—(1) Subsection (2) applies to —(a)

every major payment institution that carries on a business of providing any of the following payment services:(i)

a domestic money transfer service;

(ii)

a cross‑border money transfer service;

(iii)

a merchant acquisition service;

(b)

any prescribed major payment institution in respect of a prescribed payment service (other than a payment service mentioned in paragraph (a)(i), (ii) or (iii)); and

(c)

any prescribed licensee (other than a major payment institution) in respect of a prescribed payment service.[Act 1 of 2021 wef 04/04/2024]

(2) A major payment institution or licensee mentioned in subsection (1) must ensure that no later than the next business day after any relevant money is received from, or on account of, a customer, the whole or such part, as may be prescribed, of the relevant money, is safeguarded in one of the following manners:(a)

by an undertaking, from a safeguarding institution, to be fully liable to the customer for the relevant money;

(b)

by a guarantee given by a safeguarding institution for the amount of the relevant money;

(c)

by depositing the relevant money in a trust account maintained with a safeguarding institution;

(d)

in such other manner as may be prescribed.[Act 1 of 2021 wef 04/04/2024]

(3) Subsection (4) applies to —(a)

every major payment institution that carries on a business of providing an e‑money issuance service;

(b)

any prescribed major payment institution in respect of a prescribed payment service (other than a payment service mentioned in paragraph (a)); and

(c)

any prescribed licensee (other than a major payment institution) in respect of a prescribed payment service.[Act 1 of 2021 wef 04/04/2024]

(4) A major payment institution or licensee mentioned in subsection (3) must ensure that from the time any relevant money is received from, or on account of, a customer, the whole or such part, as may be prescribed, of the relevant money is safeguarded in one of the following manners:(a)

by an undertaking, from a safeguarding institution, to be fully liable to the customer for the relevant money;

(b)

by a guarantee given by a safeguarding institution for the amount of the relevant money;

(c)

by depositing the relevant money in a trust account maintained with a safeguarding institution;

(d)

in such other manner as may be prescribed.[Act 1 of 2021 wef 04/04/2024]

(5) The Authority may make regulations under section 103 to provide for all or any of the following matters:(a)

any matter concerning the safeguarding of relevant money under subsection (2) or (4) by any safeguarding institution;

(b)

any matter concerning the depositing of relevant money in a trust account mentioned in subsection (2)(c) or (4)(c), including —(i)

any matter concerning the trust governing the account;

(ii)

the extent (if any) to which the relevant money may be commingled with any other money;

(iii)

the manner in which the relevant money must be treated and dealt with, despite any other written law, on the occurrence of either or both of the following:(A)

any event affecting the ability of the major payment institution or licensee to which subsection (2) or (4) applies to perform its obligations, such as in the event of the insolvency of the major payment institution or licensee;[Act 1 of 2021 wef 04/04/2024]

(B)

any event affecting the ability of the safeguarding institution to perform its obligations, such as in the event of the insolvency of the safeguarding institution; and

(iv)

the circumstances (if any) in which a major payment institution or licensee to which subsection (2) or (4) applies may withdraw money from the account;[Act 1 of 2021 wef 04/04/2024]

(c)

any matter concerning the safeguarding of relevant money in any manner mentioned in subsection (2)(d) or (4)(d), including —(i)

the extent (if any) to which a major payment institution or licensee to which subsection (2) or (4) applies may commingle the relevant money with any other money;[Act 1 of 2021 wef 04/04/2024]

(ii)

the manner in which the relevant money must be treated and dealt with, despite any other written law, on the occurrence of any event affecting the ability of the major payment institution or licensee to which subsection (2) or (4) applies to perform its obligations, such as in the event of the insolvency of the major payment institution or licensee; and[Act 1 of 2021 wef 04/04/2024]

(iii)

where the relevant money is safeguarded by being deposited in an account (other than a trust account mentioned in subsection (2)(c) or (4)(c)), the circumstances (if any) in which the major payment institution or licensee to which subsection (2) or (4) applies may withdraw any money from that account;[Act 1 of 2021 wef 04/04/2024]

(d)

the obligations of a major payment institution or licensee to which subsection (2) or (4) applies to record and maintain a separate book entry for each customer, in relation to that customer’s relevant money and, where applicable, e‑money and digital payment tokens;[Act 1 of 2021 wef 04/04/2024]

(e)

the obligations of a safeguarding institution that must be set out in a contract between a major payment institution or licensee to which subsection (2) or (4) applies and the safeguarding institution;[Act 1 of 2021 wef 04/04/2024]

(f)

the form of acknowledgment that a major payment institution or licensee to which subsection (2) or (4) applies must obtain from a safeguarding institution;[Act 1 of 2021 wef 04/04/2024]

(g)

the information that a major payment institution or licensee to which subsection (2) or (4) applies must provide to a safeguarding institution, including the date or time by which any relevant money must be safeguarded;[Act 1 of 2021 wef 04/04/2024]

(h)

the manner in which a major payment institution or licensee to which subsection (2) or (4) applies conducts its dealings with a customer for the purposes of safeguarding the customer’s relevant money, including the disclosure of any information to the customer;[Act 1 of 2021 wef 04/04/2024]

(i)

any other matters relating to this section.

(6) Despite any other written law, where subsection (2)(b) or (4)(b) applies, the proceeds of the guarantee are payable, in the event of the insolvency of the major payment institution or licensee to which subsection (2) or (4) applies, into a separate trust account held by the major payment institution or licensee (as the case may be), which —(a)

must be designated in such a way as to show that it is an account held for the purpose of safeguarding the relevant money in accordance with this section; and

(b)

must be used only for holding such proceeds on trust for each customer that had provided the relevant money to the major payment institution or licensee (as the case may be).[Act 1 of 2021 wef 04/04/2024]

[Act 1 of 2021 wef 04/04/2024]

(7) All moneys deposited in an account mentioned in subsection (2)(c), (4)(c), (5)(b) or (c)(iii) or (6) —(a)

cannot be used for the payment of the debts of the major payment institution or licensee to which subsection (2) or (4) applies; and[Act 1 of 2021 wef 04/04/2024]

(b)

are not liable to be taken under or pursuant to an enforcement order or a process of any court.[Act 25 of 2021 wef 01/04/2022]

(8) The Authority may, on the application of any person, by written notice grant approval, subject to such conditions as the Authority may specify in the notice, to any major payment institution or licensee to which subsection (2) or (4) applies to safeguard any relevant money in 2 or more of the manners mentioned in subsection (2)(a) to (d) or (4)(a) to (d).[Act 1 of 2021 wef 04/04/2024]

(9) A major payment institution or licensee to which subsection (2) or (4) applies must notify the Authority, in such form or manner as the Authority may specify by written notice, of —(a)

the manner mentioned in subsection (2)(a) to (d) or (4)(a) to (d) that the major payment institution or licensee (as the case may be) has chosen to safeguard the relevant money;[Act 1 of 2021 wef 04/04/2024]

(b)

the name of the safeguarding institution (if any) that will safeguard the relevant money in the manner mentioned in paragraph (a); and

(c)

any change to the manner mentioned in paragraph (a) that the major payment institution or licensee (as the case may be) has chosen to safeguard the relevant money.[Act 1 of 2021 wef 04/04/2024]

[Act 1 of 2021 wef 04/04/2024]

(10) Where the major payment institution or licensee to which subsection (2) or (4) applies is any of the following financial institutions, the major payment institution or licensee (as the case may be) must not concurrently be the safeguarding institution mentioned in paragraph (a) or (b) of the applicable subsection in relation to the relevant money received by the major payment institution or licensee (as the case may be) under the applicable subsection:(a)

a bank licensed under the Banking Act 1970;

(b)

a merchant bank licensed under the Banking Act 1970;

(c)

a finance company licensed under the Finance Companies Act 1967;

(d)

any other financial institution that may be prescribed.[1/2020]

[Act 1 of 2021 wef 04/04/2024]

(11) A major payment institution or licensee mentioned in subsection (1) that contravenes subsection (2), (9) or (10), or fails to comply with any condition imposed under subsection (8), shall be guilty of an offence and shall be liable on conviction 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 of a day during which the offence continues after conviction.[Act 1 of 2021 wef 04/04/2024]

(12) A major payment institution or licensee mentioned in subsection (3) that contravenes subsection (4), (9) or (10), or fails to comply with any condition imposed under subsection (8), shall be guilty of an offence and shall be liable on conviction 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 of a day during which the offence continues after conviction.[Act 1 of 2021 wef 04/04/2024]

(13) [Deleted by Act 1 of 2021 wef 04/04/2024]

(14) In this section —“business day” means any day other than a Saturday, Sunday, public holiday or bank holiday;

“relevant money” —(a)

means any money —(i)

that is received —(A)

by a major payment institution from, or on account of, a customer in respect of any payment service mentioned in subsection (1)(a)(i), (ii) or (iii) or (3)(a);

(B)

by a major payment institution prescribed for the purposes of subsection (1)(b) or (3)(b) from, or on account of, a customer in respect of any payment service prescribed in respect of the major payment institution; or

(C)

by a licensee prescribed for the purposes of subsection (1)(c) or (3)(c) from, or on account of, a customer in respect of any payment service prescribed in respect of the licensee; and

(ii)

that the major payment institution or licensee (as the case may be) —(A)

where subsections (1) and (2) apply — continues to hold at the end of each business day; or

(B)

where subsections (3) and (4) apply — has held at any time and (in the case of an e-money issuance service) has issued specified e‑money in exchange for; but

(b)

does not include all of the following:(i)

any money paid to the major payment institution or licensee (as the case may be) to reduce the amount owed to the major payment institution or licensee (as the case may be) by a customer;

(ii)

any money that is repaid by the major payment institution or licensee (as the case may be) to a customer;

(iii)

any money which is paid to the major payment institution or licensee (as the case may be), or which the major payment institution or licensee has informed a customer will be used, to defray any fee or charge imposed by the major payment institution or licensee for providing any payment service to a customer;

(iv)

where a major payment institution or licensee carries on a business of providing a domestic money transfer service, a merchant acquisition service or an e-money issuance service, any money that is paid to, and received by, a recipient in accordance with instructions given by a customer of the major payment institution or licensee (as the case may be) to the major payment institution or licensee;

(v)

where a major payment institution or licensee carries on a business of providing a cross-border money transfer, any money that is paid by the major payment institution or licensee (as the case may be) in accordance with instructions given by a customer of the major payment institution or licensee (as the case may be) to the major payment institution or licensee, whether or not the recipient has received that money;

(vi)

any money paid to any other person that is entitled to the money;[Act 1 of 2021 wef 04/04/2024]

“safeguarding institution” means —(a)

in the case of subsections (2)(a) and (4)(a) —(i)

a bank in Singapore; or

(ii)

any other financial institution that may be prescribed for this sub‑paragraph;

(b)

in the case of subsections (2)(b) and (4)(b) —(i)

a bank in Singapore; or

(ii)

any other financial institution that may be prescribed for this sub‑paragraph;

(c)

in the case of subsections (2)(c) and (4)(c), a person that the trust account mentioned in subsection (2)(c) or (4)(c) (as the case may be) is maintained with, being a person that satisfies such criteria as may be prescribed;

(d)

in any case where any relevant money is safeguarded in such manner as may be prescribed for the purposes of subsection (2)(d) or (4)(d), a person safeguarding the relevant money in that manner, being a person that satisfies such criteria as may be prescribed; or

(e)

in any other case, any bank in Singapore or financial institution mentioned in paragraph (a) or (b) or any person mentioned in paragraph (c) or (d).