Strengthening Capital Markets Oversight of AML/CFT Outsourcing Arrangements

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The MAS on 15 July 2020, issued a guidance paper highlighting their findings based on thematic inspections carried out on capital markets intermediaries (“CMIs”) to assess the adequacy of their oversight of anti-money laundering and countering the financing of terrorism (“AML/CFT”) service providers (“ASPs”), and their understanding of the key control functions outsourced to these ASPs. The MAS reiterated that the Board and senior management of CMIs need to understand money laundering and terrorism financing (“ML/TF”) risks and exercise strong oversight over their AML/CFT controls, even when the CMIs decide to outsource AML/CFT control functions to service providers. CMIs must ensure that they have effective policies, procedures, and controls to deal with ML/TF risks, as well as to have appropriate compliance arrangements in place, including AML/CFT outsourcing arrangements where they exist.

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