INTERSHORES I MAS Revises The Framework For SFOs To Boost AML Measures


The Monetary Authority of Singapore (MAS) has issued a consultation paper on 31 July 2023 seeking public opinion on a revised framework to address money laundering risks (AML) of single family office (SFO).   The revised framework introduces a harmonized class exemption for single family offices (SFOs) with specific requirements to ensure that all SFOs are subject to anti-money laundering (AML) controls.


A SFO refer to “an entity which manages wealth for, or on behalf of one family and is wholly owned or controlled by members of the same family.  Apart from investment activities, SFOs can be involved in philanthropy, managing the family’s legal affairs, education, etc.   Currently, SFOs in Singapore are exempt from certain licensing and business conduct requirements if they do not manage third-party monies.   It means that SFOs can seek case-by-case exemptions from MAS or can use existing class exemptions under the Securities and Futures Act (SFA).


Addressing Money Laundering Risks

The revised framework will remove the need for case-by-case licensing exemptions by introducing a harmonized class exemption for SFOs with specific requirements.   It means that they will be subject to anti-money laundering controls.   


The framework also requires SFOs to notify MAS and confirm their compliance with the qualifying criteria under the proposed class exemption within 7 days of starting their operations in Singapore.  The notification and reporting measures will allow the SFOs to operate and manage risk of potential money laundering associated with  inflow of wealth.


Qualifying Criteria

SFOs must be incorporated in Singapore and should notify MAS their compliance with qualifying criteria when they start operating in order to qualify for harmonized class exemption.  They must also report their total assets annually and maintain a business relationship with a regulated financial institution for AML checks.


If an SFO continues to carry on business without meeting the criteria for class exemption, it will be considered as in breach of the SFA with resulting regulatory disciplinary action.


Under the revised framework, SFOs must provide specific information in their initial notification to MAS including,


- Key particulars of the SFO

- Details of the fund vehicle

- Names of MAS-regulated financial institutions they have business relations with

- The law firm that confirmed their qualification for the class exemption

- Declaration of ultimate owners, CEO and directors that are not under investigation or involved in any criminal activities, including money laundering/terrorism financing/proliferation financing.

- Confirmation that the SFO does not engage in any activity with designated persons or entities and that it meets all conditions for the class licensing exemption.


The public consultation is expected to finish by 30 September and a six-month transitional period for SFOs is proposed to comply with the revised framework.




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