30 January 2019
On 4 January 2019, the Monetary Authority of Singapore (“MAS”) issued the “Guidance to Capital Markets Intermediaries on Enhancing AML/CFT Frameworks and Controls” (“Guidance”).
The Guidance does not impose any additional legal requirements on financial institutions (“FIs”) but seeks to clarify MAS’ supervisory expectations of existing anti-money laundering and countering of financing of terrorism (“AML/CFT”) requirements through sharing of MAS’ key observations from their recent inspections on capital markets intermediaries (“CMIs”). CMIs are encouraged to study and leverage on the Guidance to identify and address effectiveness gaps so as to enhance their AML/CFT frameworks and controls in a risk-appropriate manner. Case studies taken from MAS’ inspections are included in the Guidance.
MAS applies a three-pillar framework comprising Governance, Risk Awareness and Execution in their AML/CFT inspections:
- Governance: The Board and Senior Management play an important role to maintain sound governance frameworks for active management of money laundering and terrorism financing (“ML/TF”) risks. Setting a firm tone from the top with adequate oversight for effective AML/CFT controls should be a priority.
- Risk awareness: Strong risk awareness across the FI is needed to enhance the assessment of the nature and level of ML/TF risks faced by the firm, and strengthen the FI’s ability to properly identify and escalate risk issues as well as determine appropriate risk mitigation measures.
- Execution: Effective execution of controls within the organisation is necessary to achieve desired outcomes of detecting, preventing and deterring ML/TF risks.
The following materials can be found on the MAS website www.mas.gov.sg:
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