Monetary Authority of Singapore releases consultation on Digital Payment Token Services.

Scope of Consumer Access Measures

MAS proposes that DPTSPs apply consumer access measures to any customer who is:

• Not an Accredited Investor[1] or institutional investor
• Resident or Incorporated in Singapore.

Risk Awareness Assessment

DPTSPs should assess (using multiple choice tests) whether a retail customer has sufficient knowledge of the risks of DPT services before providing any DPT service to that customer.

• Sharp fluctuations in the prices of DPTs and the loss of all monies put into DPTs
• Inability to readily sell their DPTs, such as during illiquid market conditions or system outages.
• Losing access to their DPTs in the event of a technological or operational issue, such as if private keys are lost or irretrievable
• Losing their DPTs in the event of fraud, theft, sabotage, or cyber-attack

Restriction on Offering of Incentives

DPTSPs should not:

Provide to a retail customer any credit facility (fiat currencies or DPTs) to facilitate the retail customer’s purchase or continued holding of DPT

• Enter into any leveraged DPT transaction with a retail customer
• Accept any payments made by the retail customer using a credit card or charge card, in connection with the provision of any DPT service

Segregation of Customers’ Assets and Risk Management Controls

DPTSPs should provide written disclosures to customers, which may include:

• Terms and conditions
• Customers’ assets being segregated from the DPTSP’s own assets and held for the benefit of the customers
• Whether the customers’ assets will be commingled with the assets of other customers and, if so, the risks of such commingling
• Consequences for the customers’ assets if the DPTSP becomes insolvent, and the arrangements by the DPTSP to protect customers’ assets

Measures to safeguard

private keys and storage of customers’ DPTs

Management of private keys associated with custodial wallets should be subject to strong controls over producers and staff

Identification and Mitigation of Conflicts of Interest

DPTSPs should:

• Establish and implement effective policies and procedures to identify and address conflicts of interests
• Disclose to their customers the general nature and sources of conflicts of interest and the steps taken to mitigate them
• Prevent the misuse of such information of execute orders by employees

DPT trading platform operators should not:

• Buy or sell DPTs for their own account; and
• Permit their related corporations to buy or sell DPTs for their own account on the DPT trading platform

Disclosure of DPT Listing and Governance Policies

DPT listing and governance policies that address the following matters:

• Criteria, due diligence, processes, and fees applied in making a DPT available for trading
• Conditions under which DPTs may remain available for trading
• Processes by which DPTs are removed from trading, and the rights available to customers
• Settlement procedures of DPT transactions
• Requirements to address unfair or disorderly trading practices

Complaints Handling

MAS proposes that DPTSPs have in place adequate policies and procedures to handle customer complaint