Singapore: Anti-Money Laundering Notice

Identification before a mandate opens

Before the first transaction, the Singapore entity identifies the client, every natural person who owns or controls 10 per cent or more of it through any chain of holdings, and every person authorised to give instructions. An individual is recorded by full legal name, date of birth, nationality, residential address and each country of tax residence, and each of those is verified from an independent source rather than from the client alone. A company, fund or partnership is recorded by its constitutional documents, its directors or its general partner, and by an ownership chain traced to natural persons or to a listed issuer. The completed file is approved by two officers, one of whom sits outside the desk that introduced the relationship, and a file rated high risk is approved again by the Asia-Pacific regional compliance officer.

Evidence for the source of wealth and the source of funds

The firm asks two questions and requires an answer to both. Source of wealth explains how the client came to hold what it holds: a business sold, an estate inherited, distributions from an operating group, a career of professional income. Source of funds explains how this particular subscription, deposit or facility is being paid. Each answer is corroborated in writing, by sale agreements, audited accounts, filed returns, trust deeds or distribution notices, and never by description alone. Cash is not accepted anywhere in the network. Where an account of the wealth cannot be evidenced, the relationship does not open, and the reason is recorded on the refusal log kept in Singapore.

The provisions that apply locally

The group standard applies identically in all 28 domiciles. Each jurisdiction then adds what its own regime requires of IGUAKO Capital Asia Pte. Ltd., of the officers appointed to it and of the reports it has to make.

Singapore's anti-money-laundering requirements for capital markets intermediaries are set out in a notice issued by the national financial regulator, and IGUAKO Capital Asia Pte. Ltd. applies it to every client and counterparty. The notice requires identification of beneficial owners at 25 per cent; the group's 10 per cent threshold is stricter and is the one applied. Enhanced due diligence is mandatory for politically exposed persons and for clients from jurisdictions the regulator names as higher risk, and the Head of Region approves each such relationship in addition to the General Counsel. Suspicious transaction reports are filed with the national financial intelligence office through its electronic portal, and the regulator receives an annual attestation on the effectiveness of the programme. Records are retained for five years locally and seven under the group standard.

Monitoring output, screening results and internal reports arising on Singapore files are held on the group register maintained by the Group Head of Financial Crime, who reports volumes, ageing and outcomes to the Compliance & Conduct Committee each quarter.

Monitoring, internal reporting and records

Every account in the network is monitored automatically each business day against the behaviour the file predicts, and an exception is worked rather than noted. A rating of low, medium or high risk is set at acceptance and drives the refresh cycle, which runs at 12, 24 or 36 months and is tracked centrally. A relationship that falls overdue for refresh is restricted rather than allowed to drift. Any member of staff who forms a suspicion reports it internally the same day, and the money laundering reporting officer appointed for the Singapore entity decides whether it goes to the authority that receives such reports locally. The client is not told that a report has been made. Records are kept for seven years after the relationship ends.

The firm would rather decline capital than take capital it cannot explain, and it declines several approaches each year on that ground alone. The decision belongs to compliance and not to the desk that would earn the fee. It is recorded with its reasons, so that the same name is recognised if it returns through another door.