On 26 July 2024, the Monetary Authority of Singapore issued the Circular titled “Establishing the Sources of Wealth of Customers” (Circular No.: AMLD 08/2024) (“Circular“). The Circular applies to all financial institutions in the wealth management sector in Singapore (“FIs“). The Circular provides further guidance on the establishment of the sources of wealth (“SOW“) of customers and their beneficial owners before business relations with customers can be established.
In summary, the Circular emphasises the existing requirements for FIs to take appropriate and reasonable means to establish the SOW of customers and independently corroborate information obtained from customers against documentary evidence or public information sources.
The Circular provides that FIs should take the following steps:
(a) Ensure that their policies and procedures to establish the SOW of customers are risk-proportionate and reasonable, taking into account the unique circumstances and profile of each customer.
(b) Consider risk principles of materiality, prudence and relevance when designing their policies and procedures to establish the SOW of customers.
(c) Ensure that their senior management should: (i) exercise close oversight over higher risk accounts and transactions; and (ii) ensure that ongoing monitoring controls take into account the customer’s risk profile.
This Update outlines the key guidance under the Circular.
For more information, click here to read the full Legal Update.
