Financial Crime World

Singapore’s Financial Watchdogs: Fighting Against the Rising Tide of Financial Crime

Financial crime continues to be a significant threat to the global economic landscape, with Singapore, as a major financial hub, not exempt from this trend. In this article, we’ll explore how the Monetary Authority of Singapore (MAS) and the Commercial Affairs Department (CAD) are collaborating to combat financial crime in Singapore.

The Threat of Financial Crime in Singapore

High-profile cases, such as the investigation into links between financiers in Singapore and the troubled Malaysian state fund, 1MDB, have brought financial crime to the forefront of public attention. This led to the shutdown of BSI Bank and the Singapore branch of Falcon Private Bank, and the imposition of S$30m in fines.

According to MAS, between 1 July 2017 and 31 December 2018:

  • One criminal conviction
  • S$16.8m in financial penalties and compositions
  • S$698,000 in civil penalties were meted out.
  • 19 prohibition orders, 37 reprimands, 223 warnings, and 444 supervisory reminders were issued.

The volume and complexity of financial transactions, as well as the growth in cross-border transactions, have presented challenges for the Singapore authorities in curbing the spread of financial crime.

Uniting Efforts: MAS and CAD

Since March 2015, MAS and CAD have united their efforts through a joint investigations arrangement. This arrangement optimizes and streamlines the investigation process, allowing financial misconduct to be swiftly detected, investigated, and dealt with efficiently. Combining MAS’s regulatory role and CAD’s financial crime investigation and intelligence gathering capabilities strengthens the fight against:

  • Market manipulation
  • Insider trading
  • Other financial crimes

Regulating Insider Dealing and Market Abuse

Insider dealing and market abuse are regulated under the Securities and Futures Act (Cap. 289). Offenses include false trading, market rigging, and insider trading, among others. Punishments can reach a fine of up to S$250,000 and imprisonment for up to seven years.

Combating Fraudulent Activity

Fraudulent activity in Singapore covers various offenses, from corporate fraud to breaches of trust and fiduciary duties. The Companies Act (Cap. 50) sets out specific corporate fraud offenses such as false reporting and breach of directors’ duties.

Addressing Bribery and Corruption

Bribery and corruption are addressed under the Prevention of Corruption Act (Cap. 241) and the Corruption Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (Cap. 65A). The Corrupt Practices Investigation Bureau (CPIB) is responsible for investigating such offenses and is independent from other government agencies to ensure impartial investigations.

Singapore’s Commitment to Combating Financial Crime

As a member of the Financial Action Task Force, Singapore has taken a strict stance against money laundering, terrorist financing, and breach of financial/trade sanctions. The Corruption Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act and the Organised Crime Act 2015 criminalize these offenses.

Strengthening Financial Watchdog Measures

MAS has implemented new measures to enhance consumer protection and maintain public trust in financial institutions. These measures include:

  • Enhanced disclosure requirements for listed companies
  • Increased focus on brokerage houses’ internal controls to detect and deter market abuse

Conclusion

Through collaborative efforts between regulatory bodies, advanced technology, and robust legislation, Singapore remains committed to addressing the challenges presented by financial crime in the modern economic landscape.