MAS consults on proposed AML/CFT notices for cross-border business arrangements of capital markets intermediaries under proposed exemption frameworks: Allen & Gledhill

18 May 2021

On 12 May 2021, the Monetary Authority of Singapore (“MAS”) released a consultation paper seeking feedback on draft notices setting out the proposed anti-money laundering and countering the financing of terrorism (“AML/CFT”) requirements for cross-border business arrangements of capital markets intermediaries under the exemption frameworks proposed by MAS. The consultation closes on 11 June 2021.

MAS issued a consultation paper on 15 March 2021 to seek feedback on:

MAS’ proposal to introduce an exemption framework for cross-border business arrangements involving foreign head offices or branches (collectively, “Foreign Offices”) by exempting Foreign Offices of financial institutions (“FIs”) in Singapore from the applicable business conduct and representative notification requirements under the Securities and Futures Act and Financial Advisers Act when they serve Singapore customers (“proposed Branch Framework”); and
the proposed notification forms to be submitted to MAS at the point of commencement of the arrangement and on an ongoing basis, as well as the draft regulations and notices, for both the proposed Branch Framework and the proposed exemption framework for cross-border business arrangements between Singapore FIs and their foreign related corporations (“FRCs”) (“notified FRC framework”).

The current consultation follows from the 15 March 2021 consultation paper, in which MAS indicated that it would consult on the draft notices setting out the AML/CFT requirements under both the proposed Branch Framework and notified FRC framework separately.

AML/CFT requirements

Under the proposed notified FRC framework and the proposed Branch Framework, the Singapore FI is required to have in place policies and procedures to oversee the conduct of the FRCs or Foreign Offices, as the case may be, and their representatives under the cross-border business arrangement between an FI in Singapore and its FRCs or Foreign Offices.

The applicable policies and procedures include (i) conducting customer due diligence (“CDD”) in accordance with the relevant MAS notice on AML/CFT and MAS regulations made pursuant to United Nations Security Council (UNSC) Resolutions, and (ii) maintaining or having access to all CDD records kept overseas by the FRCs or Foreign Offices that relate to the arrangements, and providing MAS with timely access to these records.