28 July 2020

On 15 July 2020, the Monetary Authority of Singapore (“MAS”) issued a guidance paper on “Strengthening Capital Markets Intermediaries’ Oversight over AML/CFT Outsourcing Arrangements” (“guidance paper”).

The guidance paper sets out MAS’ supervisory expectations of sound practices where anti-money laundering and countering the financing of terrorism (“AML/CFT”) control functions are outsourced. It summarises the takeaways from the series of thematic inspections of capital markets intermediaries (“CMIs”) MAS conducted to assess the adequacy of their oversight of AML/CFT service providers (“ASPs”). MAS also assessed their understanding of the key control functions outsourced to these ASPs. Further context can be found in the illustrative examples taken from MAS’ onsite findings and recommendations to the inspected CMIs.

While this guidance paper is premised on the inspections of CMIs, the guidance paper states that the takeaways are applicable and relevant to other types of financial institutions (“FIs”) with the appropriate calibrations. All FIs should therefore incorporate learning points from this guidance paper. FIs should note that the findings and examples highlighted in this paper are non-exhaustive and continue to implement appropriate AML/CFT controls that are commensurate with the nature and complexity of their business.

Reference materials

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