In the wake of the order to close BSI Bank, the Monetary Authority of Singapore (MAS) has announced that it will, from 1 August 2016, establish dedicated departments to combat money laundering and strengthen enforcement respectively.

MAS has indicated its resolve to ensure that Singapore retains its reputation as a clean and trusted financial centre, and will strengthen supervision of financial institutions’ controls to combat money laundering and illicit financing, as well as enhance enforcement capability to deter poor controls or criminal behaviour in the industry.

MAS has commented that even with intrusive supervision, it is not possible to prevent regulatory breaches and misconduct. Accordingly, MAS is of the view that a strong enforcement capability is necessary to conduct rigorous investigations of suspected violations and misdemeanours and take swift actions in response to breaches of MAS’ regulations.

New Anti-Money Laundering Department

In the interests of enhancing supervisory focus, MAS will (a) establish a dedicated anti-money laundering department to streamline existing responsibilities for regulatory policies relating to money laundering and other illicit financing risks, and (b) set up a dedicated supervisory team to monitor these risks and carry out on-site supervision of how financial institutions manage these risks.

New Enforcement Department

MAS will set up a new Enforcement Department, which will (a) be responsible for enforcement actions arising from regulatory breaches of MAS’ banking, insurance and capital markets regulations, and (b) continue to jointly investigate capital markets misconduct offences with the Commercial Affairs Department.