Knowledge & Insights

The Monetary Authority of Singapore ("MAS") has published a consultation paper proposing to impose anti-money laundering and countering the financing of terrorism (“AML/CFT”) related obligations on Approved Exchanges and Recognised Market Operators formed or incorporated in Singapore (“Singapore organised market operators"). These obligations would be imposed by way of a notice issued under the Financial Services and Markets Act, which is similar to how AML/CFT obligations are currently imposed on other types of MAS regulated financial institutions.

Singapore organised market operators have not been required to perform AML/CFT checks on investors who trade on their markets – the rationale being that such investors would typically trade through capital markets intermediaries ("CMI") which facilitate their access to such markets, and such CMIs would be responsible for conducting AML/CFT related checks pursuant to the relevant requirements imposed on them. However, MAS has observed an increasing trend of organised market operators with business models that allow investors who are not regulated FIs ("non-FIs") to trade directly on their markets without the need for CMIs. As these investors are not subject to AML/CFT checks by CMIs, organised market operators that take on such investors are exposed to higher ML/TF risks. Recognising the risk, MAS proposes to issue an AML/CFT notice to Singapore organised market operators, which will require them to perform AML/CFT checks on non-FI market participants who trade directly on their markets without facilitation by a CMI.

The consultation paper may be accessed here, and the consultation period will close on 29 April 2024.

Our Financial Services Regulatory Practice has advised on a broad range of issues that concern Financial Institutions, including AML/CFT related requirements. Reach out to our Financial Services Regulatory Practice Partners Elaine Chan, Rosabel Ng, Chan Jia Hui, Tian Sion Yoong to understand more about these latest developments, or find out more about our practice here.