The Monetary Authority of Singapore (MAS) has been constantly introducing new regulations while tightening existing regulations in a bid to combat money laundering and the financing of terrorism. Just recently, on 11 February 2021, MAS released Notice PSN01AA, a transitional arrangement to apply requirements of PSOA-N02 to include the exempt persons. The MAS Notice PSN01AA defines an ‘exempt person’ as a person who:
- carried on a business of providing account issuance services in relation to a relevant payment account immediately before 28 January 2020;
- satisfies the requirements for exemption under Regulation 3(1) of the Payment Services (Exemption for Specified Period) Regulations 2019; and
- was a holder of a stored value facility immediately before 28 January 2020.
This meant that, with immediate effect, exempt persons when conducting their operations and business activities, are required to:
- Exercise Customer Due Diligence (CDD) such as:
- Screening customers, natural persons appointed to act on behalf of the customer, connected parties of the customer and beneficial owners of the customer
- Ongoing monitoring
- Guard against any business relations or undertaking any suspicious transactions that would possibly facilitate money laundering or terrorism financing.
- Assist and cooperate with the authorities in Singapore to prevent money laundering and terrorism financing.
What it means for the industry
The introduction of Notice PSN01AA essentially includes yet another group of people that are now required to do Know-Your-Customer (KYC) when onboarding their clients. Prior to the notice, these group of people did not have to set aside budget for such activities. The inclusion of exempt persons in CDD foreshadows an industry where every organisation is required to do some form of CDD. As a result, many firms that are not well prepared would inevitably struggle keep up with compliance, be it in terms of cost or effort.
Key trend going forward
Without a doubt, CDD requirements are only going to becoming more stringent in view of new modes of payment. More importantly, we believe MAS will likely widen the net by applying CDD requirements to more groups of individuals or organisations moving forward. It is but a matter of time before more organisations will have to deal with the numerous CDD requirements when onboarding clients.
Regtank has anchored ourselves as a reliable pillar of support in a world where regulatory technologies are crucial in the ensuring the smooth operation of businesses. Our product uses state-of-the-art technology to assist our clients in meeting compliance and regulatory requirements set out by the government, allowing them to remain competitive in the new environment while focusing on their core business.