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Singapore urges vigilance to money laundering and terrorist financing risks

Friday 17 March 2023 15:25 CET | News

The Monetary Authority of Singapore has urged financial institutions to remain vigilant to money laundering and terrorism financing risks.

 

In order to make sure that Singapore is able to develop as an international financial hub, the MAS has issued a circular in March 2023 that reminds financial institutions of the importance of vigilance when it comes to money laundering and terrorism financing risks. The circular also comprised certain steps that financial institutions can take to tackle ML/TF risk in the wealth management sector, including private fund management. 

Some of these points touched on the importance of strengthening FIs’ board and senior management oversight, risk, and control. This includes focusing on potential ML/TF exposures in segments where FIs have experienced a material increase in demand, keeping a closer eye on quality assurance reviews and testing done to validate AML/CFT measures, and equipping FIs’ risk and control functions to address contemporary ML/TF risk. 

Other suggestions included enhancing existing customer due diligence practices in high-growth areas, as well as improving quality assurance testing in key control areas. The MAS also suggests continuing to exercise vigilance over higher risk customers. This can be done by monitoring suspicious conduct exhibited by potential customers, as well as keeping an eye out for legal structures and arrangements that may entail higher ML/TF risk in wealth management. 

FIs should also remain informed of sudden increases in unusual transactions and/or fund flows concerning third parties or businesses from high-risk jurisdictions. In this regard, the MAS has emphasised that FIs should leverage data analytics to improve their monitoring capabilities in relation to such risks.

 

The Monetary Authority of Singapore has urged financial institutions to remain vigilant to money laundering and terrorism financing risks.

 

MAS imposed due diligence requirements for corporate finance advisers 

In February 2023, the MAS issued a notice imposing mandatory baseline standards of due diligence and conduct requirements for corporate finance (CF) advisers. These new requirements raise the standards of conduct of CF advisers. They also improve the quality of disclosures and allow investors to make informed decisions.

As per these new standards, CF advisers that assist entities in fund raising from the general public will now be subject to mandatory minimum standards when conducting due diligence on CF transactions. 

These include conducting background checks and interviews with relevant stakeholders, conducting site visits of prospective issuers’ key assets, assessing knowledge, skills and experience of third-party service providers, as well as ensuring that material issues are satisfactorily resolved or clearly disclosed. 

CF advisers will also have to comply with enhanced requirements to mitigate conflicts of interests, such as where the adviser’s related corporations or controlling shareholders also provide services to the same customer.


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Keywords: AML, fraud prevention, money laundering, Monetary Authority of Singapore (MAS)
Categories: Fraud & Financial Crime
Companies: Monetary Authority of Singapore
Countries: Singapore
This article is part of category

Fraud & Financial Crime

Monetary Authority of Singapore

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