All instruments (excluding gold items sold under the CPFIS by CPF Agent Banks, Singapore Government Bonds, and Singapore Government Treasury Bills) are included only in the applications of the component manufacturers and in the examination by the CPF Board. These instruments must satisfy the requirements for inclusion.

All investments made under CPFIS shall, unless otherwise specified, be in Singapore dollars. It is not possible to assign, commit or use savings under CPFIS as leverage. These instruments must meet the eligibility requirements as well.

CPFIS-included Fixed Deposit Banks must fund it; the bank must be established locally with a minimum of $1.5 billion in capital and a good credit score, or the bank must be an affiliate of a local bank that meets the conditions set out in the first point mentioned above, the bank must continue to be a subsidiary of a local bank; or if the bank is a foreign bank, it must be recognized as a subsidiary of a local bank.

Bonds are listed on SGX; they are exchanged in Singapore dollars; they are not sold only under Section 274 or 275 of the Securities and Futures Act (‘SFA’) to institutional investors or approved investors and any other persons; they are not liable to secondary market trade bans, and a prospectus in compliance with SFA bond specifications is issued.

For endowment plans, the maturity date should not be later than the 62nd birthday of the investor. Insurance providers under the CPF Investment Scheme shall sell it, and the life insured must be the member himself.

Insurance providers listed with CPFIS would sell annuities, endowment insurance plans, and pension-related insurance products. The member himself must be on life insurance and only single premium or periodic single premium plans are approved.

Members are only allowed to purchase or sell their shares by service companies protected by CPF investment schemes. The asset management firms must manage unit Trusts and Exchanged-traded funds included in the CPFIS.

If the agent bank has been dormant (i.e. If the member has made no investment transactions) for two continuous months, the agent bank will then immediately move the cash balance kept in the member’s CPF Investment Account to his/her ordinary CPF account (at the end of the month).

Any dividends, gains received from CPFIS-OA and/or CPFIS-SA investments are not withdrawable, as the object of investing is to increase retirement CPF benefits for members. However, according to the contract terms of these schemes, distributions or gains can be used for such CPF schemes.

A member may ask the CPF Board at the age of 55 to withdraw his/her investments in CPFIS-OA and CPFIS-SA as well as the reserve fund in his/her investment account, as long as the CPF Minimum Sum and Medisave Minimum Sum have been set aside.

For CPFIS-SA, the Board of CPF will notify the product provider(s) of the member to move the investment of the member to his/her own name and he/she will then liquidate it as he/she desires and have the sales proceeds paid directly to him/her.

His/her savings under the CPF Insurance Scheme and any cash held with his/her agent bank in his/her Investment Account shall be part of his/her assets and shall be paid instantly to the claimants named by the insurer.

Money laundering (ML) is a mechanism planned to disguise the proceeds from an illegal activity such as drug dealing and other serious offenses in order to appear to have originated from a legal source.

By constructing layers of financial transactions intended to obscure the audit trail, the layering step relates to the segregation of the profits of illegal activity from their origins. Criminals can purchase luxury or high-value products from genuine sellers, resell them to unknown buyers, and then return the valid funds to the bank as check or wire transfer payments.

The process of placement relates to the physical disposal of illegal activity benefits. These are put with approved deposit-taking firms such as banks and investment companies. By developing layers of financial transfers intended to mask the audit trail, the layering step relates to the isolation of rewards of illegal activity from their origins. The process of integration relates to the provision of evident credibility to the advantages of illegal activity.

Capital market investments within financial firms provide a broad variety of possibilities, as capital market operations are no longer only cash-based, to turn money into a wide range of assets. The convenience with which they can transfer these investments to other investment options, especially if they are liquid and commercially viable, further supports layering.

This could take place by high-frequency trades and transfers to third parties or by dealings with consumers whose beneficial owners are not explicitly defined by shell corporations. For their ill-gotten earnings, offenders will set up these firms in offshore jurisdictions where the rules against money laundering are not as rigorous and are not committed to meeting the requirements of the Financial Action Task Force (FATF).

Terrorism finance funding outlets maybe both illegal and legal; illegitimate sources include fraud, drug distribution, kidnapping or hacking internet accounts, and legitimate sources include contributions from charities, the selling of views and philosophy magazines, legitimate business activities, and private self-financing.

Terrorism Financing: Similar to the practice of tax evasion, a brokerage firm may unwittingly cause itself to be part of a TF arrangement if, for example, funds are diverted to a third party which is not a client of a finance company of the CMS and proper checks has not been carried out on a third party.

An embargo is a full ban on trading or economic transactions with a country to exclude it from becoming a part of economic growth. Examples of embargoes on certain industries include embargoes on weapons and equipment.

Embargoes or sanctions are perceived to be strict steps imposed in an attempt by the United Nations, the United States, the EU, or the government enforcing the embargo to induce a constructive response from the country to which they are imposed. They use sanctions when there is a lack in political efforts, and armed action remains a last option.

Unless proper measures are taken, large corporations, through high-frequency transfers and payments to external parties, could inadvertently promote the layering and incorporation stages of money laundering and terrorist financing. Financial firms should ensure that their payment processes and protocols require extra reviews on third-party payments.

The Bearer Share companies do not identify their stockholders, and the proprietor is the person holding the share certificate. In most organizations, the policy is to ask customers to register their shares. Because of the inability to grasp for certain the name of the ultimate beneficial owner, a reasonable approach is not to recognise “Bearer Share” corporations as customers.

As the representative who perpetrated fraud was part of the organization, this is an example of internal fraud. Fraudulent acts are acts involving deception and insincerity in which at the detriment of another, an individual obtains or attempts to get an advantage or profit.

A strong control system and authentication mechanism for orders and payments is essential for a financial institution. A good idea is to include a procedure in place to validate the orders for workers awaiting mobile instructions to make a call back to the customer. If it is not an order issued by the customer, so the bank will be informed and the theft will be stopped as no payment will be permissible.

Financial Action Task Force (FATF): The FATF Recommendations form the fundamental and coherent framework for action to be taken by countries to minimize money laundering and terrorist financing, as well as the monetary support to the excessive use of nuclear weapons.

The CDSA controls the practices of money laundering and encompasses drug trafficking, adultery, gambling, terrorism financing, and tax evasion charges, among others. It was implemented to criminalize the smuggling of money and to encourage money laundering benefits to be prosecuted and seized.

The drug trade was the principal source of funds for money laundering before the CDSA was implemented. Since then it has been revised to cover the practices of money laundering and seizure of benefits and illegal behavior, including fraud, criminal abuse of confidence, counterfeiting, theft, robbery, stealing, and tax evasion.

He or she is guilty of a felony if a person covers up the assets, or converts or transfers the property, or removes it from the authority in order to help another person escape punishment for a cocaine trafficking crime, an international narcotics trafficking offense, a severe offense or a serious foreign offense, or to allow or execute an expropriation order.

If a person, a penalty of up to $500,000, or incarceration of up to 10 years, or both or if non-individual, a fine of $1 million shall be subject to a person who has committed certain money laundering activities.