Upholding Standards of Conduct, Competence and Accountability
Maintaining trust in Singapore’s financial system requires both individuals and FIs to meet high standards of conduct, competence and accountability. Through its supervisory and enforcement work, MAS acts against misconduct, weak controls and governance failures. The following cases illustrate how MAS has held individuals and FIs accountable for breaches of these standards.
Holding financial institutions accountable for risk management failures
Effective risk management, compliance and governance frameworks are important in helping FIs manage risks arising from the nature, scale and complexity of their business. MAS observed a few instances where FIs operated with generic risk management frameworks that were insufficiently tailored to the entity’s specific risks.
Cases at a glance
MAS imposed composition penalties against two fund management companies for deficiencies that increased investors’ exposure to risks that were neither properly understood nor adequately managed. In one case, the failure to appropriately manage conflicts of interest further heightened those risks. Senior management in these fund management companies were also reprimanded or prohibited from the industry for failing to ensure adequate risk management, compliance and oversight within their firms:
Eurofin Investments
Deficiencies in the firm's risk management framework led to the mischarging of management fees. Eurofin also failed to adequately manage conflicts of interest arising from its director's involvement in an underlying investment.
Havenport Investments
Weaknesses in the firm's risk management framework for its loan fund resulted in inadequate credit assessments of debtors, exposing investors to risks that were not adequately identified or monitored.
Prohibiting individuals who commit serious misconduct
MAS’ fit and proper criteria take into account factors such as honesty, integrity, competence and capability. These standards seek to ensure that individuals can be trusted to provide financial services to others.
MAS takes firm action against individuals whose misconduct calls into question their fitness and propriety, particularly where the misconduct reflects dishonesty. In serious cases, MAS issues prohibition orders to prevent such individuals from providing regulated services in the financial sector, thereby protecting consumers and preserving the integrity of the financial sector. The duration of the prohibition is carefully calibrated to the nature and scale of the individual’s misconduct.
Cases at a glance
MAS issued prohibition orders to 23 individuals in response to a range of misconduct, including cases involving:
Mis-selling Insurance Policies
3-year prohibition order
A financial adviser sold insurance policies, including investment-linked policies with complex features, to a vulnerable client with an intellectual disability. The financial adviser had the client buy insurance policies which he could not afford, and without due consideration of his financial circumstances, limited educational qualifications, and lack of work and investment experience.
Fabricating Insurance Claims
15-year prohibition order
A claims assessor fabricated and approved fraudulent insurance claims on insurance policies of acquaintances for personal gain. The individual was convicted for offences including cheating, obstruction of justice and computer misuse. A 9-year prohibition order was also issued to his accomplice, a policyholder who allowed the claims assessor to make false claims against his policy.
Facilitating Money Laundering
16-year prohibition order
A relationship manager deliberately circumvented due diligence controls and thereby facilitated the laundering of suspected criminal proceeds. The individual was convicted for offences of forgery, money laundering and obstructing the course of justice.