calibrates regulation according to the risks that the specific payment activity poses, rather than applying a fixed set of regulations to all payment service providers. while we have expanded the regulatory scope to address emerging risks in payment developments, regulations are also right - sized to the risks posed. 11. first : as individual e - wallets, how do we keep them safe to use? when we look at ewallets, we find that they face very similar risks as digital banking products. firstly, as online services, both are dependent on technology and face cyber risk – so mas expects them to manage these technology and cyber risks well. second, they both hold retail customer monies, so they need to safeguard these monies. the differences however, are that an e - wallet is used for day - to - day payments, and so needs to be very liquid to meet customer demands, and ewallet issuers don ’ t give loans with the float. so it ’ s important to right - size our regulations to their business model, and not to stifle innovation by loading them with bank - like requirements. taking these into account, mas sets out proportionately simple options for e - wallets to safeguard customer monies, for example, holding it as a deposit with a bank. mas may also prescribe further safeguarding measures in liquid and low - risk assets. second : collectively, how do we manage risks that e - wallets pose to the financial system? our role as central banks is to protect the stability of, and confidence in, the financial 12. system. to achieve this, we need to develop regulations that, while addressing key risks, do not obstruct the industry developments. in the case of payments, that key risk is money laundering and terrorist financing ( ml / tf ), and the balance that we have to strike is to allow new e - wallet businesses to start quickly, but also ensure that ml / tf risks are managed before they get too large. in this context, while kyc continues to be a key requirement, we allowed smaller wallets holding funds of no more than $ 1, 000 to carry out simplified kyc requirements. this framework is similar to those used in other markets like hong kong, india, australia and the uk. finally, as a market, how do we ensure that e - payments function smoothly with each other and the financial system? many of us think of smooth functioning as having liquidity 13. providers in capital

equally important for its participants to be able to understand and adapt to the new requirements. to illustrate, one particular rule requires market participants to obtain leis, or legal entity identifiers for purposes of trade reporting. this will improve the usability of trade reporting data and facilitate better data harmonisation across multiple reporting regimes. in fact, when mifid ii commences in january next year, leis will be needed for trades with european counterparties. reforms and culture 16. last but not least, no amount of regulatory reforms, rules and regulations can assure a sound and stable financial system if the conduct and behaviours of firms and individuals are flawed. a culture of strong integrity and high ethics are crucial lynchpins to the safety and soundness of our financial system. the key to achieve this must lie in the various lines of defence in all financial institutions – where business units follow rules and regulations diligently ; and boards and management place importance as well as give recognition to the roles of compliance and audit, supported by appropriate systems of reward and recognition. it must be made clear that doing right and doing good are aligned with doing well. 17. on this note, let me conclude. i am sure that this forum will provide many useful insights and much food for thought. thank you for your attention. 3 / 3 bis central bankers'speeches