MAS Revokes Capital Markets Licence for AML Breaches

Source: Regulation Asia Editors, Regulation Asia 2020-07-29

Apical Asset Management lacked basic AML/CFT controls despite complex ownership structures used by some of its clients. Its two directors were reprimanded.

MAS (Monetary Authority of Singapore) has revoked the capital markets services licence of Apical Asset Management for “serious breaches” of AML/CFT requirements.

MAS said it uncovered deficiencies in the firm’s AML/CFT controls from 2013 to 2018. This included a failure to have in place basic AML/CFT policies and procedures, which exposed it to the “risk of receiving and/or laundering the proceeds of crime”. The risk was heightened by the use of complex ownership structures, comprising multiple layers and investment entities, by some of its customers, MAS said.

Apical did not conduct any enterprise-wide risk assessments (EWRA), which are required under MAS guidelines at least once every two years, or when there are material trigger events. “An EWRA is crucial to enable an entity to better understand its overall vulnerability to ML/TF risks and develop appropriate measures to address such risks,” MAS said.

Apical also did not properly assess its customers to determine whether they presented higher ML/TF risks, or subject its AML/CFT controls to independent audits to assess their effectiveness.

The firm’s ongoing monitoring controls and procedures were also deficient, resulting in its “failure to conduct enhanced monitoring of a fund related to a politically exposed person [PEP] for a significant length of time.”

Besides the licence revocation, MAS reprimanded Apical’s CEO and director, Yeh Yin Yee, and another director, Bernard Kan Cheok Yin, for failures to discharge their duties to ensure compliance with all laws and rules governing Apical’s operations. Yeh and Kan were the only directors on the company’s board.

Apical’s lack of basic AML/CFT controls despite the heightened ML/TF risks posed by its clients’ use of complex investment structures was an “unacceptable failing warranting licence revocation,” said MAS assistant managing director Ms Loo Siew Yee.

“MAS will not hesitate to take appropriate action against FIs whose policies and controls clearly fail to address the ML/TF risks in their business activities. Board and senior management who fall short in their duties will also be taken to task.”

MAS

MAS Revokes Capital Markets Licence for AML Breaches

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