Monday, March 28, 2016

Common Reporting Standards: The Structure of the Agreements

In July 2014, the Organisation for Economic Cooperation and Development (“OECD”) published the Standard for Automatic Exchange of Information (“AEoI”) in tax matters (the “Standard”). The goal of the Standard is to improve cooperation between tax administrations, to protect the integrity of tax systems and to clamp down on offshore tax evasion. 

In order to implement the Standard and for the AEoI to become effective a number of steps must be taken. 
  • Translating the reporting and due diligence rules into domestic law; 
  • Agreements between countries as a legal basis for the AEoI between these specific countries; 
  • Putting in place the administrative and IT infrastructure to collect and exchange information under the Standard. 
Singapore has agreed to work towards implementing AEoI Standards by 2018.

For more information, please read out white paper on the topic here.

Thursday, March 3, 2016

IOSCO Opens Office in Malaysia

Malaysia has become the place which the capital markets watchdog, the International Organisation of Securities Commissions (“IOSCO”), will open its first office outside its headquarters in Madrid, Spain.

The office which will serve as an Asia Pacific hub is to open by the end of 2016. The centre will play a key role for IOSCO when it comes to building of regulatory capabilities across developed and emerging markets, according to the regulator.

IOSCO is the international body that brings together the world's securities regulators and is recognized as the global standard setter for the securities sector. Its members regulate more than 95% of the world's securities markets in more than 115 jurisdictions.

Malaysia welcomed as a member to the FATF

The Financial Action Task Force (FATF) granted full membership to Malaysia during its plenary meeting in Paris on 17-19 February.

In its 2015 Mutual Evaluation Report, FATF had recognized that Malaysia had overall “good levels of compliance with the FATF Recommendations”, although improvements were “needed”. Since this evaluation, Malaysia has worked to develop an action plan for addressing the key effectiveness issues identified during the evaluation. FATF said it agreed to grant membership “based on the commitment demonstrated by the action plan and the continuing progress in efforts to improve its Anti-Money Laundering and Countering Financing of Terrorism (“AML/CFT”)”. FATF will continue to monitor Malaysia’s progress through its enhanced follow-up process.

Monday, February 29, 2016

SFC Circular to Licensed Corporations Licensed for Dealing in Securities on Protecting Client Assets against Internal Misconduct

The Hong Kong Securities and Futures Commission (“SFC”) has issued a circular on protecting client assets against internal misconduct at licensed corporations (“LCs”) licensed for dealing in securities. The SFC has observed that some LCs have weak internal controls and lax management supervision. This renders them susceptible to the threat of internal misconduct, which could result in theft and fraud against client assets. Internal misconduct may be perpetrated not only by front office staff, but also by back office staff, collusion between front and back office staff, or collusion between staff and third parties.

Tuesday, February 2, 2016

BRP Opens First Office in Asia



Maroon is pleased to announce that our partners BRP Bizzozero & Partners, experts on the management of cross-border risks, have set up their subsidiary in Singapore with a successful launch event held at the Arts House last month.

This is the firm's first foray into Asia, after already having operations in Geneva, Zurich, London and Luxembourg. BRP (Asia) Private Limited will provide the firm with a foothold in the Asian market and a platform to work closer with clients in the region.

BRP is widely recognised for its Country Manuals that provide guidance on compliance in cross-border financial services. In addition to the Country Manuals Private Banking, of which BRP has already published Country Manuals for over 110 jurisdictions, other Country Manuals cover areas such as asset management, taxes and financial products.

News on the launch of BRP (Asia) was also recently featured in reputable finance media outlet, Finews. Click here to see the article.

Those interested to know more about BRP's services may contact Maroon at compliance@maroonanalytics.com or contact BRP (Asia) directly at infoasia@brpsa.com.

Monday, February 1, 2016

Illicit Personal Dealing through Other Persons’ Accounts

Personal dealing, or personal trading has become a relatively recurring topic in a time where miscreants in the financial industry are inventing new ways to circumvent laws and internal policies. In the past monthsHong Kong has seen several cases of enforcement actions taken against representatives of financial institutions with regards to personal dealing activities.
Most recently, the Securities and Futures Commission ("SFC") banned a representative licensed under the Securities and Futures Ordinance ("SFO) from re-entering the industry for 10 months for side-stepping the personal dealing policies of his employers. He hid his personal securities transactions from his employers by operating them through the personal securities account of his friend who was also a licensed representative in another firmThe friend has also been suspended by the SFC for a period of three months for abetment. The conduct of both representatives was in breach of the SFC's Code of Conduct which requires licensed corporations to actively monitor the personal trading activities of their employees. As a result of their actions, their respective employers were not able to ensure that there were no conflicts of interests or misconduct arising from their personal trading activities.

Wednesday, December 9, 2015

MAS Notice SFA04-N02 Amendment Notice November 2015

The Monetary Authority of Singapore ("MAS") has made minor amendments to its notices regarding anti-money laundering (“AML”) and countering the financing of terrorism (“CFT”), including Notice SFA04-N02 for capital markets intermediaries: For government entities, the exemption from the requirement to inquire about beneficial owners has been cancelled. Clarifications have been made with regards to Enhanced Customer Due Diligence (“ECDD”) and Simplified Customer Due Diligence (“SCDD”); the latter allowing for more flexibility in SCDD. The most significant amendment is the explicit requirement to obtain the full name of the beneficiary of a life policy where the capital markets intermediary (“CMI”) distributes such policy as soon as the beneficiary is identified by the CMI, at the latest at the time of pay-out.

For more information, please read our regulatory update here.

Monday, November 9, 2015

MAS Circular to FMCs on Enhancing AML/CFT Measures (“CMI 03/2015”)

The Monetary Authority of Singapore ("MAS") has published a Circular to report on its findings from thematic inspections performed on financial institutions ("FIs") from September 2014 to January 2015. 

Fund management companies (“FMCs”) in general have put in place policies and procedures ("P&Ps") on anti-money laundering and countering the financing of terrorism (“AML/CFT”). However, some FMCs have not applied their controls consistently.

Tuesday, October 13, 2015

Opt-In Regime for Accredited Investors and Other Enhancements to Investor Safeguards in Singapore

In its response to feedback on the proposals to enhance regulatory safeguards for investors in the capital markets, the Monetary Authority of Singapore ("MAS") has announced the extension of its regulations on specific non-conventional investment products and, most importantly, the introduction of an opt-in regime for Accredited Investors ("AIs").

Monday, August 31, 2015

OECD Automatic Exchange of Information & Common Reporting Standards

In July 2014, the Organisation for Economic Cooperation and Development (“OECD”) published the Standard for Automatic Exchange of Information (“AEoI”) in Tax matters (herein the “Standard”). The goal of the Standard is to improve cooperation between tax administrations, protect the integrity of tax systems and to clamp down on offshore tax evasions. Amongst the four documents found in the Standard, the Common Reporting Standard (“CRS”) contains the due diligence rules for which Financial Institutions (“FIs”) have to collect and exchange information. This consistency of information exchanged ensures predictability and quality of data analysis and facilitates the optimal use of information by jurisdictions. The OECD further published the CRS implementation Handbook in August 2015 to provide practical guidance to assist government officials in implementing the Standard.

Friday, July 31, 2015

FATF Report on AML/CTF in Gold Markets

The Financial Action Task Force (“FATF”) has released a report on money laundering and terrorist financing risks and vulnerabilities associated with gold. The gold market provides criminals with an alternative route to store or move their assets in the face of more stringent regulations from authorities. Through the use of gold, illicit funds can be made anonymous, transformable and easily exchangeable.

Hollywood!



Maroon's office location in Singapore, the Afro-Asia Building, is featured heavily in the upcoming Hitman: Agent 47 movie in a high-octane, action sequence in which our protagonist Agent 47 engaged in a fervent firefight with a squad of armed special forces. Catch all the espionage and explosions when the movie opens in theatres islandwide on August 27 2015!

Thursday, July 30, 2015

Cyber Security Preparedness

In this advanced cyber age, information technology ("IT") risks need to be effectively managed in order to protect data and prevent unauthorised access to systems and infrastructure. An increasing number of cases of data security breaches have been observed in recent times, as evident in Japan, the U.S. and even Singapore in the past year. The consequences of such incidents are severe, resulting in the compromise of the personal and financial information of millions of individuals.

Basel Committee Proposes Revisions to the General Guide to Account Opening

The Basel Committee on Banking Supervision ("BCBS") has issued a public consultation on the proposed revisions to the General Guide to Account Opening. The Guide focuses on the measures that banks can undertake in order to develop functional customer identification and verification procedures so that they are able to meet their obligations under the anti-money laundering (“AML”) and countering the financing of terrorism (“CFT”) requirements. Once finalized, the Guide will be incorporated into the BCBS' guidelines for a sound management of risks related to money laundering and financing of terrorism.

Friday, June 5, 2015

Automatic Exchange of Information between Switzerland and the EU

Switzerland and the European Union (“EU”) have signed an agreement for the automatic exchange of information (“AEOI”) on the financial accounts of each other's residents from 2018. With the signing of the AEOI agreement, specific agreements with individual EU countries will no longer be necessary.

Read our update on the topic here.

EU Issues Fourth Money Laundering Directive

The European Parliament has passed the Fourth Money Laundering Directive (“MLD4”) to combat money laundering and terrorist financing in the European Union ("EU"). The new anti-money laundering ("AML") framework will enable the different Member States to work together in identifying and following suspicious transactions as well as to facilitate the exchange of information. Money laundering and terrorist financing are frequently carried out internationally and hence, measures adopted at national or at union level will be insufficient if international coordination and cooperation is not taken into account. The Directive sets out the preventive measures to curb money laundering and terrorist financing.

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.