MAS Imposes S$2.5 Million Penalty on Swiss-Asia Financial Services for AML/CFT Breaches; Reprimands CEO and COO
On 7 May 2024, the Monetary Authority of Singapore (MAS) imposed a S$2.5 million penalty on Swiss-Asia Financial Services Pte. Ltd. (SAFS) for AML/CFT breaches. The CEO, Olivier Pascal Mivelaz, and COO, Steve Knabl, were reprimanded for failing to ensure compliance.
Key breaches from September 2015 to October 2018 included:
- Inadequate risk assessment of customers and business activities.
- Establishing business relations without completing customer due diligence.
- Ignoring inconsistent third-party transactions.
- Failing to identify and perform enhanced due diligence on high-risk customers.
- Not submitting suspicious transaction reports despite clear indicators.
- Lack of internal audits to monitor AML/CFT controls.
SAFS has since taken remedial actions. MAS emphasised the necessity for financial institutions to implement robust AML/CFT measures, particularly for wealth management services catering to high net worth individuals.
Ms. Loo Siew Yee, Assistant Managing Director at MAS, highlighted the importance of effective AML/CFT controls and active oversight by senior management to mitigate risks.
Regulation of Financial Advisers Advertising Estate Planning and Investment Services
On 7 May 2024, the MAS detailed regulations for financial advisers advertising estate planning and investment services in the heartlands, particularly those targeting seniors.
Key Points:
- Financial advisers offering investment advice are regulated under the Financial Advisers Act (FAA); non-advisory estate planning services like will writing are not.
- Advisers must disclose their identities when prospecting publicly.
- Additional safeguards are required for seniors, including call-backs or in-person checks to confirm understanding before transactions.
- Advertisements must be truthful and approved by senior management; MAS is reviewing feedback from a June 2023 consultation and will respond by mid-2025.
These measures aim to enhance transparency, protect seniors, and ensure the integrity of financial advisory services.
UK and Singapore Strengthen Collaboration in Sustainable Finance and FinTech
On 8 May 2024, the UK and Singapore held the 9th UK-Singapore Financial Dialogue, focusing on sustainable finance and FinTech collaboration.
Key Points:
- Sustainable Finance:
- Commitment to scale financing for the net zero agenda.
- Agreed on globally comparable transition plans and implementing ISSB’s standards for sustainability disclosures.
- Discussed mobilising private capital for Asia’s green finance projects.
- FinTech and Innovation:
- Exchanged views on managing risks and opportunities in AI, cryptoassets, CBDC, and tokenisation.
- Discussed regulatory frameworks for cryptoassets and the “digital pound” consultation.
- Emphasised benefits of tokenisation and distributed ledger technology.
- NBFI and Cross-Border Payments:
- Enhanced risk monitoring in the NBFI sector.
- Reaffirmed commitment to the G20’s Roadmap to Enhancing Cross-Border Payments and progress on Project Nexus.
- Future Engagements:
- Planned further cooperation ahead of the next Financial Dialogue in the UK in 2025.
- Scheduled industry roundtables on Transition Planning and Generative AI on 9 May 2024.
Government’s Assessment of Measures to Boost Singapore Equities Market
On 8 May 2024, Deputy Prime Minister and Finance Minister Lawrence Wong addressed measures to enhance the attractiveness of the Singapore equities market. Key points include:
- Initiatives: Various initiatives by the Government and SGX, such as funds for high-growth enterprises and MAS grants to defray listing costs and boost research coverage.
- DR Listings: Progress in Depository Receipt (DR) listings, with eight Singapore DRs on Thai stocks and four DRs on Singapore stocks in Thailand.
- Market Challenges: Global market conditions remain challenging, with declining IPO proceeds globally and in Asia-Pacific.
- Government Role: The Government will continue to encourage local listings, but GIC and Temasek operate commercially, with listing decisions made by companies based on their commercial objectives.
Former CEO of Eagle Hospitality Trust Charged for Non-Disclosure
On 17 May 2024, Mr Salvatore Gregory Takoushian, former CEO of Eagle Hospitality Trust, was charged with four offences under the Securities and Futures Act (SFA) for failing to disclose material information. The charges relate to the non-disclosure of a US$20 million shortfall in security deposits owed under master lease agreements, which led to defaults under these agreements and a subsequent US$341 million loan default.
Key Points:
- Charges: Four counts under section 203(1) read with section 331(1) of the SFA for consenting to reckless non-disclosure.
- Consequences: Each charge carries a potential fine of up to $250,000 or imprisonment for up to 7 years, or both.
- Investigation: Jointly conducted by the Monetary Authority of Singapore and the Commercial Affairs Department.
- Ongoing Investigations: Other former directors of EHT’s managers are still under investigation.
MAS Issues Prohibition Order Against Mr Muhammad Hafiz Bin Ismail for Dishonest Conduct
On 20 May 2024, the MAS issued a 5-year prohibition order against Mr Muhammad Hafiz Bin Ismail, a former DBS Bank representative, for dishonest conduct. This follows his conviction for obstructing justice and contraventions of the Financial Advisers Act (FAA) and the Securities and Futures Act (SFA).
Key Points:
- Prohibition Order: Mr Hafiz is banned from providing financial advisory services, managing or directing financial advisory or capital markets services firms.
- Conviction: Convicted for obstructing justice by directing the removal of a safe linked to a police investigation.
- Contraventions: Failed to disclose ongoing investigations when applying for a position at DBS, contravening FAA and SFA requirements.
- MAS Action: The prohibition order safeguards the integrity and trust in Singapore’s financial sector.
MAS and PBC Advance Collaboration in Green and Transition Finance
On 21 May 2024, the MAS and the People’s Bank of China (PBC) discussed initiatives to enhance cooperation in green and transition finance at the 2nd China-Singapore Green Finance Taskforce (GFTF) meeting.
Key Points:
- Taxonomies and Definitions: MAS and PBC aim to align the Singapore Asia Taxonomy (SAT) with the International Platform on Sustainable Finance’s Common Ground Taxonomy (CGT) by year-end to facilitate cross-border green financing.
- Green Finance Products: Collaboration on a Green Corridor between Singapore and China to encourage green panda bond issuances. CapitaLand Investment issued a 3-year sustainability-linked panda bond of RMB 1 billion under this initiative.
- Technology: Development of a carbon accounting and decarbonisation rating platform by Metaverse Green Exchange and Beijing Green Exchange to support green financing solutions.
- Emerging Areas: Focus on nature and biodiversity, ESG data model interoperability, and the use of AI and data analytics through Greenprint and Project NovA! to enhance ESG data collection and usage.
Ms Gillian Tan, MAS’ Assistant Managing Director and Chief Sustainability Officer, emphasised the GFTF as a platform for concrete initiatives to advance green finance cooperation between China and Singapore, showcasing strong collaboration and a shared ambition for effective net zero transition in the region.
MAS Bans Three Individuals for Obstructing Justice, Falsification of Records, and Providing False Information
On 24 May 2024, the MAS issued prohibition orders (POs) against three former insurance agents for obstructing the course of justice, falsifying records, and providing false information to MAS.
Key Points:
- Individuals Banned:
- Ms Yuen Pui Leng Eunice: Banned for 5 years.
- Ms Tan Zhen Zhi, Grace: Banned for 3 years.
- Mr Lim Hee Loon Benny: Banned for 1 year and issued a stern warning.
- Offences:
- Ms Yuen and Ms Tan: Convicted under the Financial Advisers Act (FAA) for falsifying coaching documents and obstructing MAS investigations.
- Mr Lim: Provided false information during MAS’s investigation.
- Details:
- Ms Yuen: Directed falsification of documents and deletion of evidence, fined $20,000.
- Ms Tan: Made false entries in documents, fined $5,000.
- Mr Lim: Made false statements about the coaching forms.
- Prohibition Order Impact:
- Prohibited from providing financial advisory services and managing financial advisory firms.
- Ms Yuen and Ms Tan also banned from managing insurance intermediaries.
Singapore Issues Environmental Crimes Money Laundering National Risk Assessment
On 29 May 2024, Singapore published an Environmental Crimes Money Laundering (ML) National Risk Assessment (NRA), highlighting key threats and vulnerabilities related to environmental crimes ML and outlining mitigation measures for government agencies, financial institutions (FIs), and Designated Non-Financial Businesses and Professionals (DNFBPs).
Key Points:
- Environmental Crimes Impact: Illegal activities such as wildlife trafficking and logging generate US$110-281 billion annually in criminal gains globally.
- Singapore’s Exposure: As an international financial centre and trading hub, Singapore is susceptible to ML threats from these crimes, particularly in Southeast Asia.
- Vulnerable Sectors: Banks and cross-border payment service providers are most at risk due to their transnational nature.
- Risk Level: Despite strong legal and enforcement frameworks, Singapore faces a medium-low risk of being used for environmental crimes ML.
Actions:
- Government and Agencies: Will continue to monitor and mitigate identified risks.
- FIs and DNFBPs: Should use the NRA to assess and enhance their controls against environmental crimes ML.
MAS Expands Fair Dealing Guidelines to All Financial Institutions and Products
On 30 May 2024, the MAS issued updated Guidelines on Fair Dealing, expanding their application to all financial institutions (FIs) and all products and services offered to customers.
Key Points:
- Scope Expansion: The guidelines now apply to all FIs and their entire range of products and services.
- Customer Expectations:
- Products tailored to target market needs.
- Suitable product recommendations and accurate information, with extra consideration for vulnerable customers.
- Clear explanations of product terms and conditions.
- Independent and responsive handling of feedback.
Background:
- First introduced in 2009, the guidelines initially covered investment products and advisory services. The expanded scope formalises the application of fair dealing principles across all customer interactions.
MAS Statement:
- Ms Ho Hern Shin, Deputy Managing Director (Financial Supervision) at MAS, emphasised the importance of fair dealing as a foundational value for all FIs, championed by their boards and senior management. The updated guidelines are expected to be implemented robustly across all customer-impacting activities, from product design to post-sales service.
