From 28 March 2024 to 29 April 2024, the Monetary Authority of Singapore (“MAS“) conducted a consultation on the Proposed Notice on Prevention of Money Laundering and Countering the Financing of Terrorism for Organised Market Operators Formed or Incorporated in Singapore (“Proposed Notice“). The consultation sought views on MAS’ proposal to impose anti money laundering (“AML“) and countering the financing of terrorism (“CFT“) requirements on Approved Exchanges and Recognised Market Operators (collectively, “Organised Market Operators“) formed or incorporated in Singapore.
The traditional operating model for organised markets operated by securities and futures exchanges involves capital market intermediaries facilitating access to investors who seek to trade on the organised market. Organised Market Operators thus have not been required to perform AML/CFT checks on these investors, which would have already been screened by the capital market intermediaries pursuant to MAS Notice SFA04-N02 on Prevention of Money Laundering and Countering the Financing of Terrorism – Capital Markets Intermediaries.
However, MAS has observed an increasing trend of Organised Market Operators using the direct participant model, which allows investors who are not regulated Financial Institutions (“FIs“) to trade directly on their organised market. To reflect the growing number of such Organised Market Operators, and to standardise these requirements, MAS proposes to introduce the Proposed Notice, which will impose requirements on Organised Market Operators to perform AML/CFT checks on market participants that: (i) are not FIs; and (ii) trade directly on their organised markets without facilitation by a capital market intermediary.
The consultation paper sets out MAS’ proposals and seeks feedback on the following:
(a) the scope of the Proposed Notice;
(b) definitions of “Trade-Related Activity”, “Business Relations”, and “Customer”, which determine the conditions in which an Organised Market Operators will be required to perform AML/CFT safeguards;
(c) the key AML/CFT requirements for Organised Market Operators;
(d) exclusion of AML/CFT requirements relating to correspondent accounts and value transfers; and
(e) implementation timeframe of six months from the day the Proposed Notice takes effect.
Click on the following link for more information:
- Consultation Paper on the Proposed Notice on Prevention of Money Laundering and Countering the Financing of Terrorism for Organised Market Operators Formed or Incorporated in Singapore (available on the MAS website at www.mas.gov.sg)
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