MAS seeks comments on proposed Notice on prevention of money laundering and countering the financing of terrorism for Singapore organised market operators

29 April 2024

On 28 March 2024, the Monetary Authority of Singapore (“MAS”) launched a public consultation on a proposed Notice on prevention of money laundering and countering the financing of terrorism for organised market operators formed or incorporated in Singapore. The consultation closed on 29 April 2024. 

The consultation sets out MAS’ proposal to introduce a Notice to approved exchanges and recognised market operators (collectively, “organised market operators”) formed or incorporated in Singapore, to perform anti-money laundering and countering the financing of terrorism (“AML/CFT”) checks.

Capital market intermediaries have traditionally facilitated access to investors seeking to trade on organised markets. These intermediaries are responsible for conducting AML/CFT checks on these investors for trading activities on organised markets. Organised market operators have thus not been required to perform AML/CFT checks on these investors which have been screened by capital market intermediaries.

In recent years, MAS has observed an increasing trend of organised market operators with business models that allow investors (which are not regulated financial institutions) to trade directly on their organised market without the involvement of capital market intermediaries to facilitate access to them. These include traditional securities and futures exchanges, and trading venues for wholesale and private markets which allow institutional and accredited investors to trade capital market products as direct participants. In the absence of intermediaries that are mandated to implement AML/CFT measures, such organised market operators may be exposed to higher inherent money laundering (“ML”) and terrorism financing (“TF”) risks.

Recognising the risk, MAS currently requires Singapore organised market operators which operate the direct participant model to conduct AML/CFT checks on direct participants which are not financial institutions to mitigate the higher ML/TF risks. This is done through the issuance of directives to such organised market operators. With a growing number of such organised market operators, MAS proposes to standardise the requirements under a new AML/CFT Notice to organised market operators formed or incorporated in Singapore.

The Notice will reflect MAS’ intended policy outcomes and imposes requirements similar to those imposed on other MAS-regulated entities, with some adaptations which are elaborated on in the consultation paper. A draft of the proposed Notice is found at Annex B of the consultation paper. MAS seeks views on the proposed Notice.

Reference materials

The following materials are available on the MAS website www.mas.gov.sg: