29 September 2022

On 13 September 2022, the Monetary Authority of Singapore (“MAS”) issued Circular No. AMLD 06/2022 on Enhancing Anti-Money Laundering and Countering the Financing of Terrorism Controls in the VCC Sector (“Circular”).

MAS conducted an industry-wide survey of variable capital companies (“VCCs”) in 2021 and followed up with a series of thematic engagements of how selected eligible financial institutions (“EFIs”) implemented anti-money laundering and countering the financing of terrorism (“AML/CFT”) controls for their respective VCCs. The Circular sets out MAS’ key observations and supervisory expectations for effective AML/CFT frameworks and controls that VCCs and their appointed EFIs should note. MAS states that VCCs should read the Circular in conjunction with the MAS Notice VCC-N01 and Guidelines to Notice VCC-N01.

The key observations detailed in the Circular are:

  • insufficient oversight by VCCs of appointed EFIs;
  • inadequate customer money laundering and terrorism financing risk assessment frameworks and processes; and
  • failures to implement enhanced customer due diligence measures.

MAS states that while the Circular is premised on its observations in the VCC sector, the takeaways are applicable and relevant to other types of financial institutions (“FIs”), with the appropriate calibrations. FIs should note the learning points and continue to implement appropriate AML/CFT controls that are commensurate with the nature and complexity of business.

Reference materials

The Circular is available on the relevant webpage of the MAS website www.mas.gov.sg.