FCC RegUpdate

On February 6, 2024, the Monetary Authority of Singapore (MAS) published guidelines outlining best practices for financial institutions in managing risks associated with money laundering, terrorism financing, and proliferation financing (ML/TF/PF) when receiving referrals from corporate service providers.

The scope of this paper encompasses banks receiving customer referrals from all entities offering FATF-defined Corporate Service Provider (CSP) services, both domestically within Singapore and internationally.

Key recommendations include:

•      Establishing a robust risk management framework that delineates the institution’s risk appetite based on factors such as the type of CSPs involved, including whether the foreign CSP operates in a high-risk jurisdiction and whether it is subject to regulation.

•      Conducting comprehensive due diligence on CSPs and promptly reporting any suspicious transactions.

•      Maintaining a roster of CSPs that have undergone assessment and are deemed to align with the bank’s acceptable risk appetite.

•      Establishing clear criteria for accepting customer referrals from non-panel CSPs, ensuring adherence to risk management standards.

•      Implementing a disempowerment process triggered by identified risks or breaches, ensuring swift action in response to adverse findings.

•      Periodically assessing CSPs for changes in ML/TF/PF risks and ongoing suitability.