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MAS Steps Up Enforcement Actions Against Market Abuse and Financial Misconduct

The Monetary Authority of Singapore (MAS) has announced its plans to strengthen accountability among senior managers in the financial industry by supplementing existing frameworks. This move aims to promote ethical conduct at all levels of organizations.

Individual Accountability and Conduct Framework

According to a recent report, MAS will adopt a consultative approach in assessing compliance with guidelines on individual accountability and conduct (IAC). The IAC framework focuses on measures that financial institutions (FIs) should implement to:

  • Promote individual accountability among senior managers
  • Strengthen oversight over material risk personnel
  • Reinforce standards of proper conduct among all employees

Enforcement Efforts

MAS Executive Director (Enforcement), Peggy Pao, emphasized the importance of rigorous investigation and tough enforcement in deterring financial misconduct, protecting consumers, and maintaining investor confidence. The authority has identified several key areas to focus on in its enforcement efforts, including:

  • Pursuing serious and complex cases of disclosure breaches
  • Deepening capabilities to proactively detect potential mis-selling of financial products
  • Focusing on FIs that lack rigorous systems and processes for combating money laundering and counter-terrorism financing
  • Updating enforcement-related powers to better detect, investigate, and take action against misconduct
  • Enhancing focus on senior management accountability for breaches by their FIs or subordinates

Enforcement Outcomes

In 2020, MAS took strong actions against FIs and individuals for market abuse, financial misconduct, and control breaches related to money laundering. The authority issued an Enforcement Report in November 2020, which detailed various enforcement outcomes, including:

  • 9 criminal convictions
  • 25 prohibition orders
  • 124 warnings
  • $11.7 million in civil penalties
  • 3 license revocations
  • $3.4 million in financial penalties and compositions
  • 23 reprimands
  • 282 supervisory reminders

Combating Terrorism Financing Risks

The authority also released a report on the “Terrorism Financing National Risk Assessment 2020”, which highlighted the risks and threats posed by terrorism financing in Singapore. The authority emphasized the importance of collaboration among financial institutions, regulatory bodies, and law enforcement agencies to combat these threats.

Industry Expert Views

Industry experts have welcomed the move by MAS to strengthen accountability and promote ethical conduct in the financial industry. “This is a positive step towards creating a more responsible and transparent financial sector,” said Paul Pak, Asset & Wealth Management Leader at PwC Singapore.

Conclusion

MAS’s efforts aim to create a culture of accountability among senior managers, which is essential for maintaining investor trust and confidence in the financial system.

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