Monday, May 18, 2015

Amendments to MAS Notices and Guidelines to FIs on Prevention of Money Laundering and Countering the Financing of Terrorism, in particular the Notice and Guidelines to Capital Markets Intermediaries

The Monetary Authority of Singapore (“MAS”) has revised the notices and guidelines on anti-money laundering (“AML”) and countering the financing of terrorism (“CFT”) for financial institutions (“FIs”) in order to be better aligned with international best practices and the latest recommendations of the Financial Action Task Force (“FATF”).

FIs are now required to identify and assess money laundering (“ML”) and terrorism financing (“TF”) risks on an enterprise-wide level. Risk assessments must also be performed before using new products, business practices and technologies.

In particular, for capital markets intermediaries (“CMIs”), the definitions of customer and beneficial owner have been amended such that the underlying investors into investment vehicles that the CMI itself manages are treated as the CMI's customers.

Wednesday, May 13, 2015

Boost for MAS against Money Laundering and Terrorism Financing

Proposed changes to the Monetary Authority of Singapore ('MAS') Act have been announced in order to shore up the city-state's defence against money laundering and terrorism financing.

Money laundering cases are emerging on a global scale and Singapore, being a reputable financial hub, has recently been listed as a jurisdiction of primary concern on the U.S. Money Laundering List.

The proposed changes to the MAS Act will align Singapore's anti-money laundering and countering the financing of terrorism ('AML/CFT') regime more closely with the international standards set by the Financial Action Task Force ('FATF') and the Core Principles for Effective Banking Supervision by the Basel Committee on Banking Supervision.

Monday, April 13, 2015

MAS Issues Order to Financial Institutions on the Remote Gambling Act

The Monetary Authority of Singapore (‘MAS’) has issued a Payment Blocking Order to financial institutions with regards to the Remote Gambling Act, effectively blocking financial transactions with specified parties.

The Remote Gambling Act was enacted to regulate gambling activities in Singapore. Singapore prohibits all types of remote gambling activities and the Act provides the government with the powers to introduce control measures.

Friday, April 10, 2015

FCA Fines and Prohibits Compliance Director from Performing Compliance Oversight

Regulatory authorities are increasingly taking enforcement action not only against the companies, but against individuals for lapses in compliance controls in financial firms. The Financial Conduct Authority ("FCA") has fined former compliance director of Financial Group, Stephen Bell, GBP 33,800 for weaknesses in the group’s compliance systems and controls. The FCA has also banned Bell from performing the compliance oversight function.

Britain’s FCA and PRA to Introduce New Rules on Accountability

The Financial Conduct Authority ("FCA") and the Prudential Regulatory Authority ("PRA") will be introducing new rules to enhance individual responsibility and accountability in the financial industry. The new rules come after bankers were punished following taxpayer bailouts of UK lenders during the 2008 financial crisis.

The PRA has published the first set of rules to implement the new Senior Managers Regime and Certification Regime for UK banks, building societies, credit unions and PRA-designated investment firms and the Senior Insurance Managers Regime for Solvency II insurers.

Monday, April 6, 2015

Updates to Practice Note on Recommendations on Investment Products (“FAA PN-02”)

The Monetary Authority of Singapore (“MAS”) has updated the Practice Note on Recommendations on Investment Products (“FAA PN-02”). Clients of financial advisers may now obtain and demonstrate their knowledge to transact in an unlisted Specified Investment Product (“SIP”) by passing the assessment at the end of the e-learning module by The Association of Banks in Singapore and the Securities Association of Singapore in respect of that unlisted SIP.

For more information, please read our regulatory update on the issue here.

Thursday, April 2, 2015

The Criminalisation of Foreign Tax Offences in Singapore

Singapore has made great strides in outlawing foreign tax offences. Three years after clear indications were given that assets involved in tax evasion are not welcome in Singapore, financial institutions in Singapore have increasingly been required to actively counter all assets involved in foreign tax offences.

Wednesday, April 1, 2015

Singapore Listed as a "Jurisdiction of Primary Concern” on U.S. Money Laundering List

Singapore has been designated as a “Jurisdiction of Primary Concern” on the U.S. Major Money Laundering List according to the International Narcotics Control Strategy Report released in March 2015.

The U.S. defines a major money laundering country as one whose financial institutions engage in currency transactions involving significant amounts of proceeds from international narcotics trafficking. The growth of Singapore's private banking and asset management industry coupled with the limited large currency reporting requirements is considered to make it a potentially attractive money laundering destination for transnational criminals and corrupt foreign officials. Furthermore, Singapore is a major transshipment port which hosts a myriad of free trade zones (‘FTZs’), leaving it vulnerable to trade-based money laundering and trade fraud.

MAS and CAD to collaborate against Market Misconduct Offences

The Monetary Authority of Singapore (“MAS”) and the Commercial Affairs Department (“CAD”) of the Singapore Police Force have announced that they will work together to investigate market misconduct offences such as insider trading and market manipulation. The MAS and CAD will integrate their resources and expertise, by utilizing MAS’ role as a financial regulator and CAD’s financial crime investigation and intelligence capabilities. The arrangement will promote greater efficiency and coordination for the formulation of enforcement policies in the area of market misconduct.

MAS officers involved in the joint investigations will be designated as Commercial Affairs Officers, providing them with the same criminal powers of investigation as CAD officers. CAD officers are granted the power to search premises and confiscate items as well as to order financial institutions to monitor customer accounts. This will in turn improve the overall effectiveness of investigations.

With these steps in tow, Singapore is making significant headway in the fight against financial crime as it looks forward to preserve its standing as a trusted financial hub and to strengthen confidence in its capital markets.

Thursday, March 19, 2015

FATF Public Statement

The Financial Action Task Force (‘FATF’) has issued a statement highlighting the strategic deficiencies in the anti-money laundering/combating the financing of terrorism ('AML/CFT') regimes of two groups of jurisdictions:

  • The Democratic People’s Republic of Korea ('DPRK') and Iran have not shown sufficient commitment to address their serious AML/CFT deficiencies.
  • Algeria, Ecuador, and Myanmar have not yet made sufficient progress in addressing their strategic deficiencies.

Financial institutions are advised to take the appropriate action and due diligence measures as recommended by the FATF with respect to the named jurisdictions.

A point worth nothing is that Indonesia has been moved to the FATF’s 'improving' list of countries who have addressed AML/CFT failings.

More information can be found on the FATF website.

Friday, March 13, 2015

IRAS Takes Steps to Curb Tax Evasion

Regulators worldwide are cracking down on tax evasion, an issue which has come to prominence especially with the recent revelations that UK bank HSBC had assisted more than 100,000 wealthy individuals from paying tax.

With the advent of the increase in marginal tax rates for individuals who earn at least SGD 160,000 as announced in the recent Singapore Budget 2015 statement, high income earners may decide to set up companies in order to avoid higher personal income taxes, and in turn, pay the corporate income tax of 17% instead. The personal income tax for high income earners will be increased up to 22% percent on the chargeable income from the year of assessment 2017.

Friday, February 6, 2015

Amended Rules on Risk Based Capital Adequacy Requirements for Holders of Capital Markets Services Licenses

In July 2013, the Monetary Authority of Singapore introduced a new regime regarding capital requirements for Capital Markets Services licence holders. 

Independent Asset Managers (‘IAM’) that are Licensed Fund Management Companies (‘LFMC’) must in general maintain:
  • A Base Capital of SGD 250,000; and
  •  Financial Resources exceeding 120% of their Total Risk Requirement.          
The Financial Resources are basically the available shareholders’ equity. In most cases, the Total Risk Requirement amounts to:
  • SGD 100,000 for IAMs with an Annual Gross Income of SGD 2 million or below; or
  • 5% of the IAM’s Annual Gross Income up to SGD 10 million plus 2% of its Annual Gross Income above SGD 10 million.

Tuesday, November 4, 2014

MAS Legislative Consultation Paper for FAIR

The Monetary Authority of Singapore (‘MAS’) has released a consultation paper on legislative amendments to the Financial Advisers Act ('FAA') and Insurance Act ('IA') to implement the policy proposals under the Financial Advisory Industry Review ('FAIR') in order to raise the standards of the financial advisory industry.

The MAS is proposing regulatory requirements for continuing professional development (‘CPD’) for representatives of financial adviser ('FA') and exempt financial advisers. At the same time, the MAS proposes to raise the criteria and standards for licensed financial advisers ('LFAs'), in particular with a view to financial requirements and in staff capabilities. Registered insurance brokers must also meet similar criteria to carry on the full range of FA activities.

Monday, November 3, 2014

FATF Issues Guidance on Transparency and Beneficial Ownership

The Financial Action Task Force (FATF) has issued a Guidance on Transparency and Beneficial Ownership. The standards on transparency aims to deter and prevent the misuse of corporate vehicles such as companies, trusts, foundations, partnerships, and other types of legal persons and arrangements. Corporate vehicles have been known to have been misused for illicit purposes, such as money laundering, bribery and corruption, insider dealings, tax fraud, terrorist financing, and other illegal activities.

Thursday, October 30, 2014

Tougher Anti-Money Laundering Rules for Accountants in Singapore

The Institute of Singapore Chartered Accountants (ISCA) has issued the Ethics Pronouncement 200 - Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) – Requirements and Guidelines for Professional Accountants in Singapore. The pronouncement sets out the enhanced mandatory requirements on implementing controls and procedures for AML and CFT that professional accountants, including public accountants, must abide by. Accountants will have to follow tougher AML rules which will in turn aid in strengthening Singapore's reputation as a trusted international financial and business centre.

We Have Moved!

We are pleased to announce that Maroon Analytics has relocated its office!

Our new office address is at:

63 Robinson Road, #04-04 Afro Asia Building, Singapore 068894

Data Privacy - UBS Banker Fined for Handling Data

All financial institutions should keep in mind that the data they are handling is protected by both banking secrecy laws and data privacy laws in which regulators can enact upon them with regards to the protection of client information. In certain cases, data privacy laws can even be used as an alternative to banking secrecy laws to protect the confidentiality of client data.

Friday, October 17, 2014

IOSCO Consults on Principles regarding the Custody of CIS Assets

The International Organization of Securities Commissions (IOSCO) has published a Consultation Report on Principles regarding the Custody of Collective Investment Schemes’ Assets. The report is aimed at gathering the views of investment managers, custodians, institutional investors and other interested parties on the development of a set of principles for the custody of Collective Investment Schemes’ (CIS) Assets.

Thursday, October 9, 2014

New Reporting Regime for Precious Stones and Metals Dealers in Singapore

Singapore has announced a cash transaction reporting regime for Precious Stones and Metals Dealers ('PSMDs') with effect from 15 October 2014.

Precious stones and metals are highly valuable items which can be easily traded and in turn, easily exploited by criminals. There are several cases in which funds obtained from illegal activity has been used to buy precious commodities which are then subsequently converted back to cash. The precious commodities could also be used directly to support criminal activities.

Friday, October 3, 2014

NEW! Training & Development Department

We have recently launched our Training & Development Department.

Why did we do this?

As you may know, we have been around for some time providing financial & compliance services to out clientele in Singapore and within the region. In our conversations with our partners, we realized that there was a need for high level financial training. Not your usual "this is a bond stuff" but more geared toward high level analytical tools.

We conducted several one-off courses and we were encouraged by the response.

Leveraging of our contacts here in Singapore, within the region and overseas, we have built up a pool of talented & experienced practitioners within their own industries. All our practitioners have years of experience working in tier 1 financial institutions in New York & London.