MAS Guidelines Issued to Provide Guidance on Requirements for FIs to Share AML/CFT information through COSMIC Platform

On 18 October 2024, the Monetary Authority of Singapore (“MAS“) published the Guidelines to MAS Notice FSM-N02 on Prevention of Money Laundering and Countering the Financing of Terrorism – Financial Institutions’ Information Sharing Platform (“Guidelines“). The Guidelines should be read in conjunction with Notice FSM-N02 on Prevention of Money Laundering and Countering the Financing of Terrorism – Financial Institutions’ Information Sharing Platform (“Notice FSM-N02“).

By way of background, on 1 April 2024, MAS launched Collaborative Sharing of Money Laundering/Terrorism Financing (ML/TF) Information & Cases (“COSMIC“), the first centralised digital platform to facilitate the sharing of customer information among prescribed financial institutions (“Prescribed FIs“) to combat money laundering, terrorism financing, and proliferation financing globally. On the same day, the Financial Services and Markets Act 2022 (“FSM Act“) was amended to set out the legal basis and safeguards for such sharing. On 28 March 2024, MAS issued Notice FSM-N02, which took effect on 1 April 2024, save for the provisions dealing with outsourcing arrangements which will take effect on 11 December 2024, together with the coming into effect of MAS Notice 658 on Management of Outsourced Relevant Services for Banks. For more information on Notice FSM-N02, please click here to view our April 2024 Legal Update titled “MAS Launches COSMIC Platform for FIs to Share Information on Customers Exhibiting Red Flags to Combat ML/TF”.

Among other things, the Guidelines provide guidance to all Prescribed FIs on the requirements in Notice FSM-N02 including:

  1. Key concepts on “Relevant Party” and “Risk Information”;
  2. Notice FSM-N02 paragraph 3 on internal policies;
  3. Notice FSM-N02 paragraph 4 on request for risk information by a Prescribed FI under section 28D of the FSM Act;
  4. Notice FSM-N02 paragraph 5 on provision of risk information on a Prescribed FI’s own motion under section 28E of the FSM Act;
  5. Notice FSM-N02 paragraph 6 on publication of the risk information of a relevant party on the platform under section 28F of the FSM Act;
  6. Notice FSM-N02 paragraph 8 on platform access, information accuracy and information security safeguards;
  7. Notice FSM-N02 paragraph 9 on record keeping; and
  8. Notice FSM-N02 paragraph 10 on additional requirements relating to outsourced relevant services that involve the disclosure of risk information.

The Guidelines also state that the degree of observance with the Guidelines may have an impact on MAS’ overall risk assessment of the Prescribed FI, including the quality of its board and senior management oversight, governance, internal controls and risk management.

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