Financial Crime World

Singapore’s Financial Firms Must Beef Up Internal AML/CFT Systems to Avoid Regulatory Scrutiny

In a move to strengthen anti-money laundering and counter-terrorism financing (AML/CFT) measures, Singapore’s financial institutions have been issued numerous notices by the Monetary Authority of Singapore (MAS). The revised Payment Services Act 2021 aims to address AML/CTF threats posed by companies offering services for virtual assets.

New Regulations

Under the new regulations, financial firms must establish a robust internal AML/CFT system, which includes:

  • Assessing the risk of doing business with a given customer
  • Keeping senior management updated on internal AML/CFT measures and government regulations
  • Filing Suspicious Transaction Reports (STRs)

Guidelines for Fintech Businesses

Singapore has also issued guidelines for fintech businesses operating in the country. The government has published an Information Paper on Implementation of Fairness Principles in Financial Institutions’ use of Artificial Intelligence/Machine Learning, which sets out recommendations and good practices for implementing AI and machine learning technologies.

Talent Acquisition Challenges

Singapore’s Employment Act 1968 governs employment relationships between employers and employees, with the government seeking to attract foreign talent while ensuring sufficient jobs are available for citizens. To hire foreign employees, firms must:

  • Post job openings
  • Give local candidates serious consideration under the Fair Consideration Framework

Employers must also provide mandatory benefits such as:

  • Minimum days of paid annual leave
  • Entitlements to paid sick leave and public holidays
  • Timely payment of wages
  • Legal protection against wrongful dismissal

Additionally, a 17% contribution to each employee’s Central Provident Fund account is required from the employer.

IP Protection

Innovations and inventions in Singapore are protected by intellectual property (IP) rights, including copyright, patent, and trademark. The Intellectual Property Office of Singapore (IPOS) advises on and enforces IP legislation, with a dedicated program to speed up the processing of fintech-related patent applications.

How IP Ownership Works

Under Singapore law, IP ownership operates differently depending on the type of IP. For example:

  • Under the Copyright Act 2006, the author or owner has the sole right to publish, perform, broadcast, or modify a work, which can be transferred or licensed to others

Enforcing IP Rights

To protect or enforce IP rights in Singapore, it is generally necessary to own local/national rights. However, some treaties and multi-jurisdictional rights may also apply.

As financial institutions and fintech businesses operate in an increasingly complex regulatory environment, it is crucial that they prioritize AML/CFT compliance, talent acquisition, and IP protection to avoid regulatory scrutiny and maintain a strong reputation in the market.