MAS conducted a series of thematic inspections of capital markets intermediaries (“CMIs”) to assess the adequacy of their oversight of AML/CFT service providers (“ASPs”), and their understanding of the key control functions outsourced to these ASPs. This guidance paper sets out MAS’ supervisory expectations of sound practices where AML/CFT control functions are outsourced. Further context can be found in the illustrative examples taken from MAS’ onsite findings and recommendations to the inspected CMIs.

While this paper is premised on the inspections of CMIs, the takeaways are applicable and relevant to other types of financial institutions (“FIs”), with the appropriate calibrations. All FIs should therefore incorporate learning points from this guidance paper. FIs should also note that the findings and examples highlighted in this paper are non-exhaustive, and FIs should continue to implement appropriate AML/CFT controls that are commensurate with the nature and complexity of their business.