MAS consults on proposed amendments to AML/CFT notices for financial institutions and variable capital companies

17 April 2025

On 8 April 2025, the Monetary Authority of Singapore (“MAS”) published a consultation paper seeking feedback on proposed amendments to the notices on anti-money laundering and countering the financing of terrorism (“AML/CFT”) (“Notices”) and guidelines to the Notices (“Guidelines”) for financial institutions (“FIs”) and variable capital companies (“VCCs”). The consultation closes on 8 May 2025, and the amendments are expected to take effect from 30 June 2025.

The proposed amendments will apply across the financial sector - including banks, merchant banks, finance companies, payment service providers, direct life insurers, capital markets intermediaries, financial advisers, the central depository, approved exchanges and recognised market operators, approved trustees, trust companies, non-bank credit and charge card licensees, and digital token service providers - and to VCCs.

The proposed amendments arise from MAS’ regular review of its AML/CFT framework, aimed at ensuring that its supervision of FIs and VCCs takes into account the latest money laundering (“ML”), terrorism financing (“TF”), and proliferation financing (“PF”) developments, including Financial Action Task Force (“FATF”) and international standards.

Inclusion of PF in ML, and PF risk assessments in ML/TF risk assessments

The revised FATF Standards require FIs and designated non-financial businesses and professions to identify, assess, understand, and mitigate their PF risks. While the Notices currently do not expressly refer to PF, offences under MAS’ sanctions and freezing of assets of persons regulations which effect the relevant United Nations Security Council Resolutions against the proliferation of weapons of mass destruction are ML predicate offences under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992. Thus, most (if not all) FIs would in practice already be covering PF risks as part of their existing AML/CFT and/or sanctions compliance controls.

To ensure that the Notices are updated and in line with the revised FATF Standards, MAS proposes to amend the Notices to clarify that ML includes PF, and thus that ML risks include PF risks, such that the requirement for FIs and VCCs to carry out ML/TF risk assessments includes PF risk assessments. While positioned as an amendment to the Notice, this requirement should not in substance be something new or unfamiliar to FIs and VCCs.

Amendments to MAS Notice TCA-N03

MAS proposes amendments to align the wording of MAS Notice TCA-N03 on Prevention of Money Laundering and Countering the Financing of Terrorism - Trust Companies (“TCA-N03”) with the Trustees Act 1967 and contemplated legislative changes, arising from the revised FATF Recommendation 25 which was updated in February 2023.

The main proposed amendments are as follows:

  • To expand the definition of “trust relevant party” in paragraph 2.1 of TCA-N03 to include:
    • a “protector”, a “class of beneficiaries”, and an “object of a power”; and
    • “any other persons with the power under the legal arrangement instrument or by law” to, for example, deal with the property under the legal arrangement or vary the legal arrangement.
  • To specify the following additional information in respect of the trust relevant parties of a legal arrangement which trust companies are required to obtain and hold:
    • information on the identity of the protector;
    • information on the identity of the class of beneficiaries and object of a power; and
    • information on the identity of any other natural person(s) exercising ultimate effective control over the trust relevant party.
  • To set out that the coverage of paragraphs 6.14 to 6.16 of TCA-N03 applies to all trust relevant parties of a trust or other similar arrangement.
  • To specify the collection of certain information of the legal arrangement (e.g. the full name, unique identifier such as a tax identification number or its equivalent, the trust deed (or its equivalent) and purpose for which the legal arrangement was set up, and the place where the legal arrangement is administered).

Amendments to Guidelines

Clarification of timelines for filing of STRs

Under the Notices, FIs and VCCs are required to ensure that suspicious transaction reports (“STRs”) are filed with the Suspicious Transaction Reporting Office (“STRO”) promptly. The existing Guidelines set out supervisory expectations for FIs and VCCs to ensure that their internal process for evaluating whether a matter should be referred to STRO via an STR is completed without delay and should not exceed 15 business days of the case being referred by the relevant employee or officer, unless the circumstances are exceptional or extraordinary.

MAS has observed that industry practices with respect to time taken for review and investigation to establish suspicion vary, depending on the complexity of the case. To avoid ambiguity around applicable STR filing timelines which could lead to inadvertent delay, MAS will be clarifying in the Guidelines that the filing of an STR should not exceed five business days after suspicion was first established, unless the circumstances are exceptional or extraordinary. In cases involving sanctioned parties and parties acting on behalf of or under the direction of sanctioned parties, FIs and VCCs should file the STRs as soon as possible, and no later than one business day after suspicion was first established. This is aligned with the definition of “date of detection” in the revised STR template.

MAS will also be setting out in the Guidelines the need for FIs and VCCs to ensure that there are processes in place for them to:

  • identify and prioritise the review of concerns of higher ML/TF risks;
  • ensure that such concerns of higher ML/TF risks are reviewed promptly; and
  • require any such concerns of higher ML/TF risks that cannot be reviewed promptly to be escalated to senior management, or a similar oversight body, for the application of appropriate ML/TF risk mitigation measures.

Separately, as MAS can already access STRs filed by FIs and VCCs with STRO directly, MAS intends to replace the requirement for FIs and VCCs to extend a copy of STRs filed to MAS for information with a requirement for FIs and VCCs to extend a copy of STRs filed to MAS upon request. This revised requirement is intended to cover situations where a separate access route might be necessary.

Other amendments

MAS also proposes further changes to the Guidelines to clarify and reflect MAS’ supervisory expectations and guidance over the years, including those relating to screening, source of wealth and source of funds establishment, and the characteristics of a higher-risk shell company.

Reference materials

The consultation paper is available from the MAS website www.mas.gov.sg.