Articles and Events Summary

Regulation for Insurance Brokers in Singapore

The Monetary Authority of Singapore (MAS) mandates the registration of insurance brokers in Singapore. A person who carries on business as any type of insurance broker in Singapore is required to be registered as that specific type of insurance broker, unless he is exempted from registration under Section 35ZN of the Insurance Act. An applicant may be registered as a general reinsurance broker, direct Insurance broker, life reinsurance or an insurance broker to carry combination of any of these types.

For more information, click here.

Amendments in Accredited Investor definition- Opt-in Regime

The Securities and Futures (Amendment) Act 2017 which came into force in 2018 (hereinafter the Amendment Act) introduced changes to the definition of who is an “accredited investor” pursuant to section 4A of the Securities and Futures Act (cap. 289) (“SFA”), as well as an opt-in/opt-out regime. These recent legislative amendments aimed at enhancing regulatory safeguards for investors and will also encourage those who are truly aware of the risks and complexities to enter into the investments. In addition, such a person cannot be treated as an accredited investor even without his or her knowledge.

For more information, click here.

Industry News

Cayman Islands added onto new tax haven blacklist

The Cayman Islands has been added onto the Netherlands new low-tax jurisdictions list, dubbed blacklist, of 21 jurisdictions considered to be tax havens, as a step to combat tax avoidance.Companies registered in the jurisdictions on the list face paying 20.5% tax from 2021 on interest and royalties received from the Netherlands. This will prevent funds being channeled to tax havens through the Netherlands, the Dutch finance ministry explained.The Dutch list has the Bahamas, Bahrain, Belize, Bermuda, the British Virgin Islands, Guernsey, the Isle of Man, Jersey, the Cayman Islands, Kuwait, Qatar, Saudi Arabia, the Turks and Caicos Islands, Vanuatu and the United Arab Emirates, American Samoa, the US Virgin Islands, Guam, Samoa, and Trinidad and Tobago having either no corporation tax or have a corporation tax rate that is lower than 9%.

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MAS sets up Corporate Governance Advisory Committee to Promote Good Corporate Governance

The Monetary Authority of Singapore (MAS) has established a Corporate Governance Advisory Committee (CGAC) to level up corporate governance practices & standards among listed companies in Singapore and help to strengthen investors’ confidence in our capital markets and uphold Singapore’s reputation as a trusted international financial centre. The permanent, industry-led body, will be chaired by Mr. Bobby Chin, director of Singapore Telecommunications Ltd.CGAC includes directors on the boards of listed entities and members from key stakeholder groups such as large and small companies, institutional and retail investors, audit and legal professionals, academia and the media. In 2018 the Corporate Governance Council, that was set up to review the Code of Corporate Governance (CG Code) has recommended for the implementation of the same. CGAC will monitor international trends, revise the Practice Guidance to clarify the CG Code, and recommend updates to the CG Code.

For more information, click here.

EU publishes money laundering blacklist, urges banks to apply customer due diligence (CDD)

The European Commission adopted a list of countries that has weak anti-money laundering and terrorist financing regimes, and urged banks to increase customer due diligence (CDD) checks on customers and firms from the blacklisted states following an in depth analysis based on the criteria set by fifth anti-money laundering Directive.The criteria for assessments included, the level of existing threat, the legal framework and controls put in place to prevent money laundering and terrorist financing risks and their effective implementation and also the work of the Financial Action Task Force (FATF), a global anti-money laundering body. The Commission concluded that 23 countries have strategic deficiencies in their anti-money laundering/ counter terrorist financing regimes. The 23 blacklisted jurisdictions are Afghanistan,American Samoa, The Bahamas, Botswana, Democratic People’s Republic of Korea, Ethiopia, Ghana, Guam, Iran, Iraq,Libya, Nigeria, Pakistan, Panama, Puerto Rico, Samoa, Saudi Arabia, Sri Lanka,Syria, Trinidad and Tobago, Tunisia, US Virgin Islands, and Yemen.

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Rabobank fined over poor anti-money laundering controls, KYC, beneficial ownership

Dutch lender Rabobank has been fined just over €1 million by the Dutch Regulator, the Dutch National Bank over its anti-money laundering controls, including know your customer (KYC), customer due diligence (CDD) and beneficial ownership issues. The spokesman for the Dutch Lender told that they were not fined for money laundering crimes, but rather for our files or records on standard checks to prevent money laundering. He also stated that they have made a lot of improvements and investments in Compliance department, which includes anti-money laundering.

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Commerzbank spends 600 million euros on compliance, driven by U.S. monitor – Q4 results

Commerzbank’s compliance function, helped by the demands of a U.S. monitor, has come at a cost of 600 million euros since 2015 and reduction in both products and customer reach. This includes an international anti-money laundering and sanctions compliance programme monitoring and sanctions screening, the definition and roll-out of international know-your-customer processes. Stephen Engels, chief financial officer of Commerzbank stated that they have established a sound and robust compliance framework and made significant investment in terms of both money and full time employees.

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Estonia orders Danske Bank to shut down following money laundering scandal

The Danske Bank’s local unit has been ordered by Financial Supervision Authority of Estonia (FSA) to cease operating and finalise its affairs within eight months, citing its financial crime scandal which revealed that €200 billion was allegedly laundered through its system. As per FSA, Danske Bank violated anti-money laundering regulations for many years by operating high-risk money-laundering clients to make suspicious transactions through the bank. In addition, Danske Bank misled the Estonian public authorities by providing them with inadequate information and thus actually hampered their activities. The decision by FSA has been reached on the basis of on-the-spot checks carried out at the bank and a thorough analysis of the information received from the Estonian Financial Intelligence Unit.The FSA also ordered Danske to submit an action plan for closing the branch in Estonia within 20 days.

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France fines UBS bank record S$5.6 billion in tax fraud case

A Paris court on Wednesday fined Swiss banking giant UBS 3.7 billion euros (S$5.67 billion) for encouraging customers to commit tax fraud, a record in France where public opinion has grown vocal for crackdowns on tax dodging. Lawyers for the bank, which was convicted of illegally soliciting rich clients abroad and helping them to hide billions from French tax authorities, said they would appeal the landmark ruling.UBS, the world’s largest private bank, had tried to negotiate a settlement to avoid the potentially embarrassing court showdown, but failed to agree on a fine with prosecutors.

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Standard Chartered fined $133 million by UK financial regulator FCA

The Financial Conduct Authority (FCA) has imposed a £102.2 million penalty against Standard Chartered Bank for issues pertaining to its financial crime controls. The bank’s 2018 interim report states that it is expecting to pay a ‘hefty’ fine to the FCA for violating financial crime rules in an ongoing investigation. At the time, it said the probe was focused “within the correspondent banking business carried out by Standard Chartered Bank’s London branch, particularly in relation to the business carried on with respondent banks from outside the European Economic Area.”

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U.S. seeks to recover $38 million in assets from 1MDB case

The U.S. Justice Department had filed complaints seeking forfeiture and recovery of approximately $38 million in assets collected by corrupt officials and their associates through a massive scheme that stole billions of dollars from the people of Malaysia and laundered the proceeds across the world associated with its 1Malaysia Development Berhard – or 1MDB case.The department has estimated that a total of $4.5 billion was misappropriated by high-level 1MDB fund officials and their associates between 2009 and 2014, including some funds that Goldman Sachs helped raise as underwriter and arranger of three bond sales totaling $6.5 billion. Goldman has consistently denied wrongdoing and said certain members of the former Malaysian government and 1MDB lied to it about the bond sale proceeds.

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EU Sixth Anti-Money Laundering Directive (6AMLD): Countdown to Enforcement Begins

With its publication in the Official Journal of the European Union in late 2018, the Sixth EU Anti-Money Laundering Directive (6AMLD) is now on its way. As per the 6AMLD compliant EU nations will adopt a list of 22 predicate crimes which includes “counterfeiting and piracy of products,” smuggling and cybercrime, to which money laundering charges can be appended. The directive also clarifies that convictions of predicate offences are not necessary prerequisites for money laundering cases, and that predicate crimes committed anywhere in the world can be cited in domestic money laundering cases, provided that the acts are outlawed by a member-state. For individuals, offences shall be punished by “effective, proportionate and dissuasive” criminal penalties. There shall be a maximum prison sentence of at least four years following convictions of the main money laundering offences.

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Regulatory Updates

4th Feb 2019 – FAQs on The Definition of Accredited Investor and Opt-in process

MAS has issued FAQs on the revised definition of Accredited Investor under Securities and the Futures Act and the new opt-in regime effected by  The Securities and Futures (Classes of Investors) Regulations 2018 (“the Regulations”) which was published on 8 October 2018 and came into effect on 8 January 2019

For more information, click here to access the relevant section of MAS website.

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