MAS clarifies and amends AML rules

17 April 2025 | Asia | Articles

The MAS has issued a consultation paper to clarify and amend certain areas of its Anti-Money Laundering and Countering the Financing of Terrorism rules. These include proliferation financing, clarity on what is a ‘trust relevant party’, filing of suspicious transaction reports, and establishment of source of wealth and source of funds. These changes are expected to take effect from 30 June 2025.

In its consultation paper titled, ‘Consultation Paper on the Proposed Amendments to Anti-Money Laundering and Countering the Financing of Terrorism Notices for Financial Institutions and Variable Capital Companies’, MAS proposes to amend the various anti-money laundering and countering the financing of terrorism (AML/CFT) Notices and Guidelines for financial institutions (FIs) and variable capital companies (VCCs). The proposed amendments will align MAS rules with the latest revised Standards set by the Financial Action Task Force , the global standard-setter for measures to combat money laundering (ML), terrorism financing (TF) and proliferation financing (PF).

The amendments will apply across all the MAS AML/CFT Notices and Guidelines relevant to banks, merchant banks, finance companies, payment service providers, direct life insurers, capital markets intermediaries, financial advisers, central depository, approved exchange and recognised market operators, approved trustees, trust companies, non-bank credit and charge card licensees and digital token service providers, as well as VCCs.

The consultation closes on 8 May 2025. The amendments are expected to take effect from 30 June 2025.

The key amendments are:

Inclusion of PF risk assessments: to clarify that ML includes PF. FIs and VCCs should include PF risks in their ML/TF risk assessments.

Trust relevant party and identification of legal arrangement: to enhance the definition of ‘trust relevant party’ and to provide clarity on the requirements to identify all related parties to a legal arrangement and to collect relevant information. These include:

• Expanding the definition of “trust relevant party” to include “protector”, “class of beneficiaries”, “object of a power” and “any other persons with the power under the legal arrangement instrument or by law”.
• Obtaining information on the identity of the protector; identity of the class of beneficiaries and object of a power; and information on the identity of any other natural person(s) exercising ultimate effective control over the trust relevant party.
• The current requirement to identify and verify effective controllers of settlors or trustees will now apply to all trust relevant parties or other similar arrangements.
• Collecting the full name of the legal arrangement, the unique identifier such as a tax identification number, the trust deed, purpose of setting up of the legal arrangement, and the place where the legal arrangement is administered.

These amendments will impact FIs and VCCs whose customers include legal arrangements (these are trusts or other similar arrangements).

Timelines for filing of Suspicious Transaction Reports (STRs): Clarification in the Guidelines that the filing of an STR should not exceed 5 business days after suspicion was first established, unless the circumstances are exceptional or extraordinary.In cases involving sanctioned parties and parties acting on behalf of or under the direction of sanctioned parties, FIs and VCCs should file the STRs no later than 1 business day after suspicion was first established.There will be no need to extend a copy of the STR to the MAS unless the MAS requests it.

Amendments to the AML/CFT Guidelines: the MAS has taken this opportunity to update the various Guidelines to reflect enhanced expectations and industry practice. Amendments cover screening, source of wealth (SoW) and source of funds (SoF) establishment, as well as the characteristics of a higher-risk shell company. Some of the notable amendments are:

• Information sources used for screening should include search engines used in jurisdictions closely associated with the person screened, and the screening should be conducted in the native language(s) of the person screened.
• There should be processes to share information on customers and related accounts across business units.
• There should be guidance and processes in place on how to identify and manage fraudulent or tampered data, documents or information.
• Various SoW and SoF-related clarifications pertaining to seed money, corroboration of information, use of reliable and independent sources, residual risk of not being able to corroborate information, legitimacy and plausibility of gifts, etc.

For details of the amendments, you may wish to refer to the respective MAS AML/CFT Notices and Guidelines:

MAS AML/CFT Notice: Capital Markets Intermediaries

MAS AML/CFT Guidelines: Capital Markets Intermediaries

MAS AML/CFT Notice: Variable Capital Companies

MAS AML/CFT Guidelines: Variable Capital Companies

MAS AML/CFT Notice: Payment Services Providers

MAS AML/CFT Guidelines: Payment Services Providers

MAS AML/CFT Notice: Payment Services Providers (Digital Payment Token Service)

MAS AML/CFT Guidelines: Payment Services Providers (Digital Payment Token Service)

How can Bovill Newgate help you meet the updated AML/CFT requirements?

Since 2015, our Singapore team have been actively supporting clients in:

• developing their AML/CFT policies and procedures or reviewing to enhance their existing policy and procedures
• providing appropriate and actionable advice (as part of our ongoing compliance support services) to help put in place appropriate AML/CFT control measures and deal with specific situations.
• carrying out periodic AML/CFT internal audits.