MAS’ financial crime framework approved

The Monetary Authority of Singapore (MAS) has received approval to establish a legislative framework that enables banks to share customer information, as reported by the Straits Times. Amendments to the Financial Services and Markets Bill will pave the way for the creation of Cosmic, a centralised digital platform. Cosmic will allow financial institutions to securely request and share targeted information on individuals and companies, aiding in the detection and prevention of money laundering, terrorism financing, and proliferation financing.

Initially, Cosmic will be accessible to six banks starting from the second half of 2024. The platform will primarily focus on three key risks: shell companies concealing ownership, trade-based cross-border transactions disguising illicit proceeds, and shell companies facilitating indirect trade and payments to sanctioned nations. The initiative will gradually expand to include more financial institutions and address additional risks in the future.

Under the amended law, banks will be able to share information when they identify suspicious transactions that meet a specific threshold. They can also request information from other banks and alert financial institutions about potential wrongdoers. Initially, information sharing will be voluntary before transitioning to mandatory participation.

Alvin Tan, Singaporean Minister of State for Trade and Industry, assured Parliament that MAS will be responsible for Cosmic and will ensure the secure exchange and storage of data. The platform will implement robust controls, including data encryption, firewalls to prevent unauthorized access, and strict user access limitations. Periodic audits will be conducted to ensure the effectiveness of these controls.

Tan emphasized that the majority of customers will not trigger any red-flag indicators. The amendments include legal and operational safeguards to protect the confidentiality of shared information and the interests of legitimate customers.

The Monetary Authority of Singapore has recently launched its Finance for Net Zero (FiNZ) Action Plan to accelerate efforts towards achieving net-zero emissions.

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