Other ECDD measures that may be performed include:
(a) requiring the first payment to be carried out through an account in the customer’s name with another FI subject to similar or equivalent CDD standards;
(b) using public sources of information (e.g. websites) to gain a better understanding of the reputation of the customer or any beneficial owner of a customer.
(c) commissioning external intelligence reports where it is not possible for a financial adviser to easily obtain information through public sources or where there are doubts about the reliability of public information.

A financial adviser should ensure that the internal process for evaluating whether a matter should be referred to the Suspicious Transaction Reporting Office (“STRO”) via an STR is completed without delay and should not exceed 15 business days of the case being referred by the relevant employee, representative or officer, unless the circumstances are exceptional or extraordinary.

A financial adviser should ensure that the internal process for evaluating whether a matter should be referred to the Suspicious Transaction Reporting Office (“STRO”) via an STR is completed without delay and should not exceed 15 business days of the case being referred by the relevant employee, representative or officer, unless the circumstances are exceptional or extraordinary

The responsibilities of the AML/CFT compliance officer should include:
(a) carrying out, or overseeing the carrying out of, ongoing monitoring of
business relations and sample review of accounts for compliance with the Notice and these Guidelines;
(b) promoting compliance with the Notice and these Guidelines, as well as MAS Regulations issued under Section 27A of the MAS Act, and
taking overall charge of all AML/CFT matters within the organisation;
(c) informing employees, officers and representatives promptly of regulatory changes;
(d) ensuring a speedy and appropriate reaction to any matter in which ML/TF is suspected

The frequency and extent of the audit should be commensurate with the ML/TF risks presented and the size and complexity of the financial adviser’s business.

The screening procedures applied when a financial adviser in Singapore hires employees and appoints representatives and officers should include:
(a) background checks with past employers;
(b) screening against ML/TF information sources; and
(c) bankruptcy searches.

A financial adviser should monitor the effectiveness of the training provided to its employees and representatives. This may be achieved by:
(a) testing employees’ and representatives’ understanding of the financial adviser’s policies and procedures to combat ML/TF, their obligations under relevant laws and regulations, and their ability to recognise suspicious transactions;
(b) monitoring employees’ and representatives’ compliance with the financial adviser’s AML/CFT policies, procedures and controls as well as the quality and quantity of internal reports so that further training needs may be identified and appropriate action taken;
(c) monitoring attendance and following-up with employees and representatives who miss such trainings without reasonable cause.

A financial adviser should develop indicators that would alert it to customers and transactions (actual or proposed) that are possibly associated with proliferation financing-related activities, including indicators such as whether:
(a) the customer is vague and resistant to providing additional information when asked;
(b) the customer’s activity does not match its business profile or the enduser information does not match the end-user’s business profile;
(c) the transaction involves designated persons;
(d) the transaction involves higher risk countries or jurisdictions which are known to be involved in proliferation of weapons of mass destruction or proliferation financing activities;

Transactions Which Do Not Make Economic Sense
i) Transactions that cannot be reconciled with the usual activities of the customer, for example switching from investing predominantly in blue chip stocks to penny stocks.
ii) A customer relationship with the financial adviser where the customer carries out frequent large transactions which are beyond the customer’s apparent financial means (for example, customer requests for a single premium contract with large sum assured).
iii) Transactions where the nature, size or frequency appears unusual, for example, a sudden request for a significant purchase of a lump sum contract from an existing customer whose current contracts are small and of regular payment only.

Tax Crimes Related Transactions
i) Negative tax-related reports from the media or credible information sources.
ii) Unconvincing or unclear purpose or motivation for having accounts opened in Singapore.
iii) Life insurance solutions used for illegal purposes.
iv) Purchase or sale of large amounts of precious metals by a customer which is not in line with his business or background.

An insurer shall obtain written approval from the MAS before offering any product with any feature that does not appear in any product in the insurer’s then-existing business portfolio. The above paragraph shall not apply in respect of:
(a) a short-term Accident and Health policy; or
(b) a Term policy having a duration of five years or less.

Subject to the paragraph below, an insurer should notify the MAS in writing of any product launched by the insurer that does not require the approval of the MAS. Such notice should be given to the MAS within seven working days after the official launch date of the product. The notification should contain relevant information and be accompanied by product documents. Details of the requirements are in the MAS website.

Without prejudice to the generality of the first paragraph of this subsection, the circumstances in which an insurer should notify the
MAS under the paragraph include, but are not limited to:
(a) when the single-premium endowment products in the thenexisting business portfolio of the insurer have durations of five years, and the insurer wishes to introduce longer or shorter policy terms for any such products;
(b) when the insurer wishes to increase the number of dread diseases covered under their whole life products;
(c) when the insurer wishes to provide prospective or existing policy owners of a product in the insurer’s then-existing business portfolio with the option of paying premiums at any frequency, which is then unavailable to such policy owners; and
(d) when total permanent disability cover is an existing feature of any products other than whole life products in the insurer’s thenexisting business portfolio.

The MAS may take into account a failure to comply with these standards in considering whether to:
(a) approve a new product;
(b) revoke the approval for a product; or
(c) issue directions for the withdrawal of a product.

There are two parts to the Notice comprising both Part I and Part II in relation to disclosure, investment guidelines, borrowing limits and operational practices for Investment-linked Policies (ILPs).

Strengthening Core Investment Requirements:
(i) introducing a list of permissible investments for ILP sub-funds;
(ii) strengthening safeguards on the use of financial derivatives and counterparty requirements;
(iii) enhancing guidelines on securities lending activities

An insurer shall notify the MAS of:
(a) the insurer’s intention to launch any ILP sub-fund at least 21 days before the ILP sub-fund is established. For this purpose, an insurer shall submit a copy of each of the following to the MAS:
(i) a product summary (it should contained information as specified in Appendix A and the annexes to Appendix A of the Notice No: MAS 307);
(ii) the policy containing the information specified in Appendix B of the Notice No: MAS 307;
(iii) a benefit illustration of the ILP;
(iv) information on the Investment-linked Policy (“ILP”) Subfund under Appendix G of the Notice No: MAS 307;
(v) a product highlights sheet (“PHS”) containing the information specified in Appendix H of the Notice No: MAS 307;

Where an insurer is unable to determine whether a significant change would occur at least one month before the change is to take effect, the insurer shall inform the MAS and existing policy owners in writing of the significant change as soon as practicable. Examples of such changes include the following:
(i) suspension and resumption of dealings as a result of exceptional circumstances;
(ii) any change which may materially affect the risks and returns of an ILP sub-fund1;
(iii) any change which may materially affect the ability of any key counterparty2 to an over-the-counter financial derivative, securities lending or repurchase transactions to fulfil its obligations to the ILP sub-fund; or
(iv) the cessation of market making activity by designated market makers.

Upon the change to the audit by way of the second method, no insurer shall, without the approval of the MAS, make any change to the audit method. The MAS may grant approval for any change to the audit method subject to such conditions as the MAS may think fit to impose on the insurer and the insurer shall comply with the conditions imposed.

Where the audit is carried out by way of the second method, the insurer shall ensure that the inaugural audit is completed not later than three months after the ILP sub-fund‘s year end. Upon completion of the inaugural audit, the insurer shall ensure that every subsequent audit by way of the second method is completed not later than the next financial year end of the insurer.

Where an audit by way of the second method is carried out, the insurer shall ensure that an audit report is prepared which includes the following objectives:
(a) outstanding unit holdings of the insurer‘s ILP sub-funds are properly maintained, with subscriptions (including top-ups),
redemption (including partial redemption) and switching of units of the ILP sub-funds properly accounted in the correct period and allocated into the correct ILP sub-funds;
(b) units of the ILP sub-funds are properly priced;
(c) charges and expenses directly attributable to each ILP sub-fund are properly accounted in the correct period and allocated to the correct ILP sub-funds while common expenses are properly apportioned amongst the ILP sub-funds;
(d) existing assets and liabilities are properly accrued for each ILP sub-fund;

The insurer shall ensure that the audit certificate is completed within six months after the termination or maturity of the ILP sub-fund. The insurer shall send to the MAS a copy of the audit certificate on the ILP sub-funds which are terminated or matured within 30 days after the completion of the audit. The insurer shall retain a copy of the audit certificate on the ILP sub-funds which are terminated or matured for a period of five years, from the date of termination or maturity of the ILP sub-fund. The insurer shall make available the audit certificate to the policy owner, within 30 days of the policy owner‘s request, if such request is made within five years from the date of termination or maturity of the ILP sub-funds.

The insurer may send to policy owners, within the time as provided in this paragraph, the underlying fund reports prepared by the managers if the following conditions are met:
(i) the ILP sub-fund feeds substantially into the underlying fund;
(ii) the policy owners shall have each purchased an ILP to which the ILP sub-fund belongs with a minimum single premium of US$50,000 or an annualised regular premium of US$5,000, or the equivalent in other currencies;
(iii) the ILP sub-fund is not available for investment using CPF monies; and the insurer has obtained written consent from the policy owners.

Where the insurer sends to the policy owners the underlying fund reports prepared by the managers, the insurer need not send to the policy owners:
(i) the Semi-Annual Report;
(ii) the Annual Audited Report (except the audited financial statements of the ILP sub-fund) where the audit by way of the first method is carried out; or
(iii) the Annual Report (except the audit report) where the audit by way of the second method is carried out.

Examples of electronic means include:
(i) transmitting via email with softcopy attachments to the email address provided by the policy owner for correspondence purposes;
(ii) making available via an electronic storage medium (e.g. CD-ROM); and
(iii) posting on a website where the statements and reports would remain posted on that website for at least 12 months from the date of posting.

A failure by any insurer to comply with the non-mandatory standards shall not of itself render the insurer liable to criminal proceedings but such failure may, in any proceedings whether civil or criminal, be relied upon by any party to the proceedings as tending to establish or to negate any liability which is in question in the proceedings. In addition, the MAS may take into account a failure to comply with these standards in considering whether to issue directions to the insurer to withdraw the ILP sub-fund.

The manager should take all reasonable steps to obtain the best possible result for the ILP sub-fund, taking into account the following execution factors: price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of a trade or transaction.

The suspension should cease as soon as practicable when the exceptional circumstances cease to exist, and in any event, within 21 days of the commencement of the suspension. The period of suspension may be extended if the insurer is satisfied that it is in the best interest of policy owners for the dealing in units to remain suspended.

The value of the assets of an ILP sub-fund, in the case of quoted investments, should be based on:
(a) the official closing price or the last known transacted price on the organised market on which the investment is quoted; or
(b) the transacted price on the organised market on which the investment is quoted at a cut-off time specified in the product summary and applied consistently by the manager;

The insurer should ensure that the units of an ILP subfund are valued every business day. Where the ILP subfund:
(a) does not offer dealing every business day, it should be valued every regular dealing day, but in any event, at least once a month;
(b) is a property ILP sub-fund which complies with Appendix 6 (Property Funds) of the Code, it should have a full valuation at least once yearly.