MAS IMPOSES A COMPOSITION AMOUNT OF $10,000 ON ABN AMRO BANK, N.V. FOR FAILURE TO ESTABLISH AND MAINTAIN AN INSURANCE BROKING PREMIUM ACCOUNT

1 On 12 July 2006, ABN AMRO Bank, N.V. ["ABN"] paid a composition amount of $10,000 for failing to establish and maintain a separate insurance broking premium account for clients' moneys from August to October 2004. This is a breach of section 32 of the Financial Advisers Act ["FAA"].

2 Although this is the second time that ABN has breached section 32 of the FAA, the breach was discovered by the bank following an internal compliance review of the robustness of newly implemented processes. No client interest was affected by the breach and ABN took immediate action to establish an insurance broking premium account in accordance with section 32 of the FAA. 

The purpose of requiring financial advisers to set up an insurance broking premium account is to ensure that insurance moneys belonging to clients and insurers are properly segregated from the financial adviser's own moneys. MAS expects all financial advisers to put in place systems and procedures to comply with the insurance broking premium account requirements at all times.