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.

Certain FMCs had incomplete identification information of their customers while some had performed simplified customer due diligence (“CDD”) without producing supporting documentation. Shortfalls were also found in the screening of relevant persons in client relationships in some FMCs. In addition, several FMCs had failed to monitor transactions or performed periodic reviews on customers. Some FMCs had also retained records of CDD documentation in foreign languages.

While some FIs did not incorporate tax risk assessments into their P&Ps for CDD and ongoing monitoring, others required customers to declare their tax residency annually and also obtained independent opinion on tax responsibilities of customers. Some FIs requested supporting documents to provide evidence of the customer's source of funds.

FIs are in the process of identifying, assessing and documenting their enterprise-wide ML/TF risks and the controls to address such risks. Whereas MAS highlights the necessity to take Singapore’s National Risk Assessment (“NRA”) into consideration, FIs have also considered tax havens, suspicious transactions reports, expected growth as well as staffing and capabilities.

Where customers' money and assets are held at custodian banks, MAS recognises that the requirements relating to the segregation of assets under management are fulfilled.

For more information, please read our regulatory update here.

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