On Thursday (6 Feb), a joint statement was made between The Monetary Authority of Singapore (MAS) and the US Treasury to support and promote cross-border data transfer by financial services companies as long as the data is available for use for supervisory and regulatory purposes. This means that data localisation is not needed.
The act of containing data in the country where the data originates is known as data localisation.
Although the statement of intent is not legally binding, it allows “the US and Singapore recognise that the ability of financial institutions to aggregate, store, process and transmit data across borders is critical to financial sector development”.
Jacqueline Loh, the deputy managing director of MAS, remarked that “The statement of intent between the Monetary Authority of Singapore (MAS) and the US Treasury reflects a strong commitment to safeguard cross-border data connectivity for financial institutions so that the financial system is safer and more efficient. We look forward to working with the international community to develop standards that support the trust and security for cross-border flows of financial data”.
Based on the joint statement, Singapore and the US hope to facilitate the adoption and implementation of rules and policies within their multilateral and bilateral economic relationships to achieve three objectives.
The first is to guarantee that data such as personal information can be transferred across borders by electronic means if the purpose is to carry out a financial service supplier’s business.
The second is to oppose restriction measures. This entails that financial services suppliers can store and process data as long as regulators have timely and full access to the necessary data to carry out their supervisory and regulatory responsibilities.
The third is to guarantee that at times when access to such data is lacking, financial services sector can have the opportunity to remedy such a situation before following up with locating or using local computing facilities.
Both countries are also looking to share information on developments regarding data access and mobility as well as encourage third countries to implement policies in line with the joint statement.
According to the joint statement, data localisation requirements can inhibit financial supervisory and regulatory access to information, increase operational and cybersecurity risks and hinder compliance and risk management.
On the other hand, data mobility benefits compliance and risk management programmes while also fostering the development of innovative financial services as well as economic growth.
These will make it easier to combat cyberattacks, assess and manage risks globally and detect cross-border terrorist financing patterns and money laundering, the joint statement concluded.