The Monetary Authority of Singapore (“MAS”) initiated a public consultation to streamline the regulatory framework for fund managers. The MAS has proposed transitional arrangements for existing Registered Fund Management Companies (“RFMCs”) that intend to continue operating fund management businesses following the repeal of the regulatory regime for RFMCs. For more information please click here.
Regulatory Update
Exemption Frameworks and AI Opt-In Requirement for Cross-Border Arrangements
The Monetary Authority of Singapore (“MAS”) has implemented exemption frameworks for cross-border business arrangements involving Foreign Related Corporations (“FRCs”) and Foreign Offices (“FOs”) of capital markets intermediaries. These frameworks include an Accredited Investor (“AI”) opt-in requirement under the Securities and Futures (Classes of Investors) Regulations 2018, which will apply to customers served under the exemption frameworks starting from October 9, 2023. For more details on the opt-in requirement, please refer to the link here.
Regulatory Update
Strengthening AML/CFT Controls and Practices to Detect and Mitigate Risks of Misuse Legal Persons / Arrangements and Complex Structures
The Monetary Authority of Singapore (“MAS”) published a paper setting typologies and supervisory expectations to uphold strong Anti-Money Laundering and Countering the Financing of Terrorism (“AML/CFT”) controls. These inspections were prompted by MAS’ surveillance efforts, which identified several Financial Institutions (“FIs”) involved in potentially concerning fund flows through legal entities and complex structures. The paper sets out typologies and case studies observed by MAS during its inspections of FIs, and its supervisory expectations to ensure robust AML/CFT controls. FIs are encouraged to review the document which can be accessed here to obtain deeper insights into MAS's requirements for establishing and maintaining strong AML/CFT controls.
Regulatory Update
Exploring Best Practices in Managing ML, TF, and Sanctions Risks in Customer Relationships Linked to Digital Assets: Insights from Industry Perspectives
On 11 July 2023 the Monetary Authority of Singapore ("MAS") published a paper produced by the ACIP working group on Digital Assets Risk Management, which provides Financial Institutions (“FIs”) with a foundational framework to advance understanding and management of Money Laundering (“ML”), Terrorism Financing (“TF”) and sanctions risks arising from customer relationships with nexus to digital assets in the Singapore context. The paper also highlights “red flags” and best practices that FIs could adopt to identify, manage and mitigate the associated ML, TF and sanctions risks. To access the summary, please click here.
Regulatory Update
MAS Consults on Regulatory Measures for Digital Payment Token Services and Stablecoin Issuers
The Monetary Authority of Singapore ("MAS") published two consultation papers on 26 October 2022, outlining proposed regulatory measures to reduce the risk of consumer harm from trading in digital payment tokens ("DPTs") and to encourage the development of stablecoins as a credible medium of exchange in the digital asset ecosystem. The changes will be incorporated into the Payment Services Act. A summary of the consultation papers may be found here.
Regulatory Update
MAS’ Supervisory Expectations for Effective AML/CFT Frameworks for External Asset Managers
The Monetary Authority of Singapore ("MAS") issued an Information Paper on enhancing anti-money laundering and counter-terrorism financing ("AML/CFT") policies for External Asset Managers ("EAMs") on 24 August 2022. The Information Paper covered the following five main topics: a) governance; b) risk assessment frameworks; c) customer due diligence ("CDD"); d) enhanced CDD; and e) suspicious transaction reporting. The information paper suggests that EAMs have a lot of space to strengthen their AML/CFT regimes. Given their inherent sensitivity to ML/TF risks when engaging with consumers, EAMs are expected to continue to seek to improve their AML/CFT frameworks. A summary of the MAS information paper is available here.
The revised guidelines set out the need for Financial Institutions (“FIs”) to take an end-to-end service-centric view in ensuring the continuous delivery of critical business services to their customers. The guidelines supersedes the previous version that was published in June 2003, as well as the circular titled “Further Guidance on BCM” that was issued in January 2006. FIs should meet the new Guidelines and establish a BCM audit plan by 6 June 2023, and conduct the first BCM audit by 6 June 2024. Review our summary here.
Regulatory Update
New Exemption Regimes for Cross-Border Business Arrangements Under the Securities and Futures Act (“SFA”) and the Financial Advisers Act (“FAA”)
With effect from 9 October 2021, the Monetary Authority of Singapore ("MAS") has replaced the ad hoc approval regime under paragraph 9 of the Third Schedule to the SFA and paragraph 11 of the First Schedule to the FAA for cross-border business arrangements between certain specified financial institutions ("Specified FIs") and their foreign related corporations ("FRCs") with an automatic exemption regime (the “FRC Framework”). Along with the FRC Structure, MAS has implemented a similar exemption framework for cross-border commercial transactions between Singapore and overseas branches of a Specified FI (the "Branch Framework"). The summary here provides an overview of the essential aspects of the FRC Framework and the Branch Framework (collectively, the “ExemptionFramework”).
In anticipation of the implementation of the Payment Services Act , the Monetary Authority of Singapore on 4 October 2019 released a series of frequently asked questions relating to the PSA. These FAQs were meant to provide guidance on, amongst other things, the licensing and regulation of payment service providers, and oversight of payment systems. This bulletin summarizes the key takeaways from the FAQs.
The Financial Action Task Force (the "FATF") has issued revised international guidance gearing up for the upcoming round of Mutual Evaluations for FATF members. The Guidance updates a 2009 set of guidelines aimed at Trust and Company Services Providers ("TCSPs") to identify, assess, and understand their money-laundering and terrorism financing risks.
The Monetary Authority of Singapore ("MAS") has issued a consultation paper (“CP”) on two anti-money laundering and countering the financing of terrorism (“AML/CFT”) notices under the new PSA as it gears up to the implementation of the new payment services regime. The new regulatory framework for payment services is intended to provide a more conducive environment for innovation in payment services. Consistent with this intent, the proposed AML/CFT requirements will be similar to the existing ones, while dialing up requirements for certain payment services of perceived higher risk.
The Monetary Authority of Singapore ("MAS") has issued a consultation paper (“CP”) on two anti-money laundering and countering the financing of terrorism (“AML/CFT”) notices under the new PSA as it gears up to the implementation of the new payment services regime. The new regulatory framework for payment services is intended to provide a more conducive environment for innovation in payment services. Consistent with this intent, the proposed AML/CFT requirements will be similar to the existing ones, while dialing up requirements for certain payment services of perceived higher risk.
