Before forming customer partnerships, financial companies must perform screening of their clients, independent of the risk profiles of the clients. Screening is typically done as an automatic method against the available datasets, and the financial companies must be aware of their company’s structure, scale, and risk profile and should be aware of any vulnerabilities/setbacks in their automatic scanning mechanisms.

We can take simplified CDD into consideration where the risk of money laundering is minimal, e.g. for entities listed on the stock market and subject to regulatory reporting standards; where emphasis can be imposed on another licensed financial intermediary established outside Singapore that conforms to and monitored to comply with AML/CFT criteria under FATF standards, the client is a MAS regulated brokerage firm aor the company is a government agency in Singapore.

If there are grounds to suspect that suspicious knowledge about a prospective customer could exist, so they should carry out complete due diligence. For instance, an intermediary is on a sanctioned or alert list on the MAS, or the intermediary cannot supply information or documents. If a financial institution believes that money laundering or terrorist activity is involved, they cannot carry the simpler CDD out.

Examples of “high-risk” customers include clients who perform business in sectors of higher-risk companies listed by the finance company or in the National ML/TF Risk Assessment (NRA) of Singapore; have a corporate structure that seems irregular or unnecessarily ambiguous given the existence of the business of the legal individual or legal arrangement; are legal persons holding personal assets, perform their commercial relationships in unusual conditions ( e.g. substantial unknown geographical gap between the bank and the customer); are businesses with candidate owners or securities in bearer form; or are cash-intensive companies.

An EDD must be carried out by a financial institution and its delegate for cases where the risk profile is high. Examples of product/service/transaction or distribution threats are unidentified sales (which can include cash) or additional payments receieved from unknown or associated third parties.

Examples of red flags to look out for include prospective customers who’s reluctant to disclose the source of his funds, the activity of the company is inconsistent with the business profile, client history and profile do not reflect the scale of account partnership and account actions, unusual tax deduction transfers, uncertain account intent or non-transparent ownership.

Due diligence is an ongoing process, so it requires an annual review for all accounts with “higher risk.” Representatives must decide if the context and profile of the customer correlate to the scale of the account partnership and account behavior. As a delegate, it should be promptly highlighted to the boss or comply if you find any red flags or possible AML/CFT problems when handling the client partnership.

An individual who has an influential public position in Singapore or abroad, immediate family members of such an individual, or a close confidant of such an individual are referred to as Politically Exposed Persons (PEP). The position of heads of state, heads of cabinet government ministers, senior civil servants, senior judiciary or military officers, senior managers of state-owned enterprises, and senior officials of political parties requires major social roles.

It requires the introduction of acceptable internal rules, processes, and controls to assess and determine if a customer or BO is a PEP, the consent of the senior management of the financial institution to develop or maintain contractual relationships where the customer or BO is a PEP or ultimately a PEP, and the establishment of each customer’s source of revenue and transfer of income via effective means.

The Personal Data Privacy Act (PDPA) regulates personal data storage, usage, dissemination and treatment. It is critical that financial institutions insert PDPA-related disclosure provisions into the account opening terms and conditions to compensate for certain circumstances. Failure to do so means violating the PDPA, which serves to protect the security of consumer records, by a financial institution.

When a decision is taken to file an STR, they must make such filing within 15 days of the person being referred to in the event. It should provide a central point of reference to which all workers are directed to respond to all transactions accused of money laundering or used for terrorism acts promptly. This is to allow for quick inquiries to take place so that a decision to file a suspicious transaction report (STR) can be made.

These reports are to be forwarded to the Commercial Affairs Unit of the Singapore Police with a copy to the MAS as well. The investigative report and review should be included in the report, along with the justification for submission of the Suspicious Transaction Report (STR).

The financial institution shall keep records of all transactions prior to the filing of the STR, and those transaction records should be held for a minimum holding period of 5 years. Similarly, a proper registry of all STRs and supporting documentation filed must be maintained and monitored for a minimum amount of time.

A person who knows or has rational reasons to believe that an authorized person is acting or planning to act with an inquiry that is or is about to be carried out under or for the objectives of the CDSA; and who uncovers material or any matter to any other person who is likely to impair any inquiry that may be carried out after disclosure shall be guilty of an offense.

Failure to disclose a suspicious transaction is subject to a fine of up to $20,000. Failure to keep records of financial transfers holds up to $10,000 in fines. Failure to keep a registry of all filed STRs and documents for the given time required would bear a fine of up to $10,000.

Via the issuing of different financial instruments such as shares/common stock/equity securities, bondsfixed income securities and company warrants, companies generate capital. By acquiring these instruments, buyers will then have the money. As investors purchase these instruments, they take risks as the price of the financial instruments constantly changes due to the success of the firm.

An exchange offers a centralized market in which buyers and sellers will gather together. This helps the prices and amounts at which each participant is engaged in purchasing or selling securities to be readily found. The buyer or seller must be a trading member of the exchange or a client of a trading member of the exchange to trade on the exchange.

Initial Public Offering (IPO): Financial intermediaries, such as commercial banks and other financial firms with a licence to advise on corporate finance for stock market services, are typically named as question managers, since most organisations are unlikely to have such in-house knowledge.

Wholesale Banks: Singapore dollar deposits of at least S$250,000 will only be approved. They are not approved to run bank accounts for Singapore dollar savings. Therefore, many wholesale banks tend to target High Net Worth Individuals (HNWI) for business through their private banking platforms. These consumers are typically more interested in stock market funding goods.

Offshore banks can usually take out some banking activity subject to Singapore dollar business constraints. Singapore dollar deposits are not approved to be accepted by offshore banks, whether in the form of fixed deposits or deposits of savings by citizens of Singapore. Lending in Singapore dollars is also limited. Such Singapore dollar loans can not exceed $500 million in total unless prior MAS approval has been given.

They may not take deposits or invest from the public in any way, except for banks, financial firms, shareholders, and shareholder-controlled companies. Therefore, merchant banks are also not based in the retail space, but through its Asian Currency Unit for non-Singapore dollar banking sector, they may conduct corporate finance operations that come under capital market services or private banking.

These firms, including banks, do not participate in deposit-taking and credit extension operations, but instead specialize in connecting buyers with sellers. Broker/dealer firms will also be selling or clearing participants and provide their clients with trading or clearing services in the form of the financial markets eco-system, encouraging customers to invest in the exchange.

Providers of Custodial Services for Securities: Some custodians also provide facilities for securities borrowing and securities lending. Securities lending is known to be trading in securities and, they expect a securities lending company to have a CMS license to trade in securities. The borrowing of securities and leasing of securities are not related practices and need another form of CMS license.

Its roles include functioning as Singapore’s central bank e.g. performing monetary policy, issuing currencies, monitoring payment processes and working as a state banker and monetary agent; conducting coordinated monitoring of financial services and regulation of financial stability; handling Singapore’s official foreign reserves; and establishing Singapore as an internal financial agent.

In the quest for Asian growth, SGX links shareholders to corporate issuers in quest of international capital. With a substantial proportion of companies listed on SGX coming from outside Singapore, SGX is Asia’s largest foreign exchange. It also provides customers the biggest offshore market in the world for Asian stock futures, based on China, India, and Japan, the three largest economies in Asia.

In matters such as administrative policies, risk control, regulatory supervision, and compliance measures, SGX keeps a close working partnership with other regulatory and enforcement bodies, such as the MAS, Commercial Affairs Department (CAD), and the Accounting and Corporate Regulatory Authority (ACRA).

The SGX Catalist Board serves the needs of smaller or fast-growing firms and has a particular model in which an initial public offering (IPO) must be used to list approved sponsors. There are no basic quantitative entry requirements required by SGX for such businesses. Rather, sponsors will determine if they should list the candidate for the listing.

SGX-DC is a fully owned subsidiary of SGX which offers clearance for Singapore Exchange Derivatives Trading (SGX-DT) Products; OTC commodity trades registered through the SGX OTC Trade Registration Portal (TRS); and OTC commodity futures trades registered through the trading registration system used by the industry. 

The organization must employ an adviser as the issue manager to plan for the listing submission. These services are offered by a CMS-approved bank or financial institution for advice on Corporate Finance. The business then authorizes the problem manager to negotiate with the SGX on its behalf. In the listing process, the dilemma manager takes an important role. It will compile the information submitted, consult with the SGX on matters related to the application, and make the ultimate submission.

The timeline comprises two parts: pre-submission planning and post-submission acceptance and listing. The typical timetable for registration and trading applications includes 2-6 months pre-submission meeting, 9-12 weeks SGX & MAS examination, 2 weeks issuance & Public Attention on the MAS Opera website, 1-2 weeks Registration & Launch, and finally Trading begins.