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OUR MISSION
OUR OBJECTIVES
 
Supervision
Inspections and
Supervisory Reviews
New Legislation
Enhancing Regulatory Frameworks
Market and Business Conduct
Risk Management
B THE FINANCIAL SECTOR: KEY SUPERVISORY
AND REGULATORY INITIATIVES
 
  Inspections and Supervisory Reviews 32
 
BASEL II Implementation  
32
 
Box 1 – BASEL II Implementation in Singapore  
33
 
Thematic Inspections Relating to Anti-Money
 
Laundering/Countering Financing of Terrorism
34
 
Thematic Inspections on Asset-Liability
 
and Capital Management for Life Insurers
35
 
Box 2 – Monitoring Hedge Funds in Singapore  
36
 
Thematic Inspections of Corporate Finance Advisers  
37
 
Thematic Inspections on E-trading of Futures Contracts  
37
 
Inspections of Fund Management Companies  
37
 
Box 3 – Developing and Enforcing Supervisory
 
Regimes for Real Estate Investment Trust  
38
 
Box 4 – Thematic Supervisory Work on Financial Advisers  
39
 
  INSPECTIONS AND SUPERVISORY REVIEWS

Thematic Inspections Relating to Anti-Money Laundering/Countering
Financing of Terrorism
 
In keeping with evolving international Anti-Money Laundering/Countering Financing of Terrorism (AML/CFT) standards, MAS has been reviewing its AML/CFT regulations for the financial sector. Revisions to the regime will include: expansion of measures to cover both money laundering and terrorist financing risks in a single regulation, a more comprehensive set of customer due diligence measures, and introduction of an element of risk sensitivity in performing customer due diligence.

During the year, MAS remained vigilant in its AML/CFT efforts. We continued to inspect and review internal and external audit reports on the adequacy of banks’ AML/CFT measures, and their compliance with MAS’ regulations. In line with our risk-based supervision, the inspections were either targeted or part of regular inspections of the financial institutions. Since January 2005, 43 banks and merchant banks have been inspected on the adequacy of their AML/CFT measures.

The banks and merchant banks inspected were generally in compliance with MAS’ Notice on Prevention of Money Laundering and Anti-Terrorism (Measures) Regulations. However, a number of them had room for improvement in one or more of the following areas: updating of policies and procedures, staff training, customer due diligence measures, comprehensiveness of screening of customers’ identity and remittances, and transaction monitoring processes and systems. MAS is following up with the institutions concerned to ensure that they institute the necessary improvements expeditiously and satisfactorily.

During the year, MAS also inspected 12 money changing and remittance licensees for their compliance with relevant laws and regulations, including the adequacy of their AML/CFT systems and procedures. MAS has extended the AML/CFT regulations, which already cover licensees’ outward remittance business, to include their inward remittance operations. The AML/CFT regulations require licensees to conduct customer due diligence, screen customers against updated terrorist lists, and comply with the requirements for maintenance of proper records and reporting of suspicious transactions.

MAS also assesses the life insurers’ compliance with MAS’ AML/CFT regulations in the course of our inspections of these insurers.

The life insurers inspected to date were generally in compliance with MAS’ Notice 314 on the Prevention of Money Laundering and Anti-Terrorism (Measures) Regulations. While these life insurers’ AML/CFT measures were adequate relative to their size and risk profile, they need to continue to enhance their systems in order to ensure robust ongoing monitoring of customer transactions.

MAS continues to emphasise to all financial institutions the need to have in place robust AML/CFT policies, procedures and controls, and to regularly review and enhance them.