MAS responds to AML, CFT consultation paper

The Monetary Authority of Singapore (MAS) has released its response to a consultation paper introduced late last year on the establishment of a regulatory framework for financial institutions (FIs) to share information and prevent money laundering (ML), terrorism financing (TF) and proliferation financing (PF).

A digital platform, named the Collaborative Sharing of ML/TF Information & Cases (COSMIC), was also included as part of the consultation, which received 59 feedback submissions from 98 respondents.

In response to the general public support of the framework and COSMIC platform, MAS has introduced the proposed Financial Markets and Services (Amendment) Bill (FSM(A) Bill) and highlighted the initial phase for the platform will include six participant banks – DBS, OCBC, UOB, SCB, Citibank and HSBC – sharing information on a voluntary basis.

“A participant FI should share risk information with another participant FI only if the customer’s unusual activities have crossed the stipulated threshold criteria applicable for that mode of sharing,” the regulator said in its consultation response.

“Information sharing on COSMIC will be done via a structured data template that will be made available to all participant FIs. This will include fields for information relating to the customer including identifying information of the customer and the beneficial owners and authorised signatories of the customer, details of the transactions in question, the red flag behaviour exhibited, and the risk analysis that is relevant to the customer relationship.

“The initial phase is expected to last for approximately two years after the launch of COSMIC. The FSM(A) Bill sets out the provisions for the initial phase for COSMIC only, during which the six participant banks will be permitted to share information on COSMIC on a voluntary basis.

“MAS will review and adjust this period as necessary to achieve operational stability and provide participant FIs with sufficient time for implementation. In addition, MAS plans to progressively extend COSMIC to a wider segment of the financial sector and expand the key areas of focus in subsequent phases, as appropriate.

“Some aspects of information sharing will also be made mandatory in subsequent phases. Further legislative amendments will be proposed for subsequent phases, drawing from MAS’ and the banks’ experience in implementing the initial phase. MAS will duly consult affected FIs as well as publicly, as these plans are firmed up.”