Singapore: MAS to Strengthen Defense Against Money Laundering Risks in Single Family Offices

The Monetary Authority of Singapore (MAS) recently launched a public consultation on a revised framework to strengthen surveillance and defence against money laundering (ML) risks in Singapore’s Single Family Office (SFO) sector.

The revised framework will aim to “introduce a harmonized class exemption for SFOs with specific requirements to ensure that all SFOs are subject to anti-money laundering controls.”

Currently, as SFOs do not manage third-party assets, “they can either rely on existing class exemptions from licensing requirements under the Securities and Futures Act or apply to MAS for case-by-case exemptions.”

To strengthen surveillance and defense against ML risks in the SFO sector, MAS proposes to harmonize “the exemption criteria for all SFOs operating in Singapore.”

Specifically, to qualify for the class exemption, SFOs must:

  • be incorporated in Singapore;
  • notify MAS and confirm that it is in compliance with the qualifying criteria under the class exemption when they commence operations in Singapore;
  • report annually on total assets managed after the end of each calendar year; and
  • maintain a business relationship with an MAS-regulated financial institution that will perform anti-money laundering checks on these SFOs.

These measures will allow MAS “to better monitor SFOs operating in Singapore and address any ML risks in the sector.”

Interested parties are invited to submit their comments here.

In another recent update, it was noted that the Monetary Authority of Singapore has announced that all corporate cheques will be “eliminated by end-2025 while individuals will still be able to use cheques for a period after 2025.”

With cheque usage in Singapore falling steadily, the cost of processing each cheque has been rising. To recover these cheque processing costs, banks will therefore “commence charging for Singapore Dollar (SGD)-denominated cheques by 1 November 2023.”

MAS is working closely “with The Association of Banks in Singapore (ABS), the financial industry and government agencies on a series of initiatives aimed at transiting cheque users to e-payment solutions.”

This will include a specific e-payment solution “that can serve as an alternative for post-dated cheques.” This will provide greater convenience “to corporates and individuals.”

As noted in the update, Annual cheque transaction volume “has declined by almost 70% from 61 million in 2016 to less than 19 million in 2022, alongside growing adoption of e-payments by both corporates and individuals.”

With the fixed cost incurred in cheque clearing, “the average cost of clearing a cheque has quadrupled since 2016 to $0.40 in 2021.” Most banks have to-date been “subsidizing the cost of cheque processing.” But if cheque volumes fall “by a further 70% by 2025, the cost of clearing a cheque is projected to increase to between $2.00 and $6.00 by 2025.”

Banks will no longer “be able to absorb these costs and will have to reflect the cost of cheque processing in their charges to their customers.”

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