APAC Monthly Private Wealth Legal Developments – May 2024

Singapore

1. MAS expands application of fair dealing guidelines to all FIs, products and services

The Monetary Authority of Singapore (MAS) has published an updated set of guidelines for boards and senior management on implementing fair dealing outcomes for customers. The update extends the scope of the guidelines to apply to all financial institutions (FIs), and to all products and services they offer to their customers.

The guidelines set out:

• responsibilities of boards and senior management in delivering fair dealing outcomes to customers;
• explanation of the five fair dealing outcomes and why each outcome is important;
• key principles of fair dealing at various stages of a product’s life cycle, or services rendered; and
• good and poor practices, and self-assessment questions for each outcome.  [30 May 2024]

​​​​​​​2. MAS: Singapore issues Environmental Crimes Money Laundering National Risk Assessment

MAS has announced the publication of the Environmental Crimes Money Laundering National Risk Assessment which identifies the key threats and vulnerabilities in environmental crimes money laundering that Singapore is exposed to. It also outlines relevant mitigation measures that Government agencies and private sector can develop and implement to address money laundering (ML) risks arising from environmental crimes.

FIs and designated non-financial businesses and professionals (such as corporate service providers and precious stones and metals dealers) are expected to take reference from the publication in assessing their environmental crimes ML risks and enhance their controls as appropriate.  [29 May 2024]

3. MAS: Singapore and China cooperate in green and transition finance

The MAS has announced that it has held discussions with the People’s Bank of China on advancing cooperation in green and transition finance at the 2^nd China-Singapore Green Finance Taskforce (GFTF) meeting held on 20 May 2024. The initiatives discussed covered the alignment of taxonomies, facilitation of green finance flows, and the development of a decarbonisation rating platform.  [21 May 2024]

4. MAS: Parliamentary Question on regulatory response following collapse of Terraform Labs

The MAS has published a written response to a Parliamentary Question on the regulatory response following the collapse of Terraform Labs. In its response, the MAS noted the following points:

• Terraform Labs Pte Ltd was not performing activities requiring a licence from the MAS and was consequently neither licensed nor exempted from licensing by the MAS.
• Spillovers to the mainstream financial system and the economy from the collapse of the TerraUSD stablecoin were limited, and key financial institutions in Singapore have insignificant exposures to cryptocurrency and crypto players.
• Since 2017, MAS has consistently warned the public about the risks of speculating in cryptocurrencies, and in January 2022, restricted advertising of cryptocurrency services in public spaces.
• The MAS has introduced a number of regulatory measures for cryptoassets, including requiring cryptocurrency platforms to determine a customer’s risk awareness before accessing trading services, prohibiting incentives that would entice consumers to trade, and prohibiting the provision of credit or leverage to consumers that could magnify losses. The MAS has also introduced business conduct requirements on cryptocurrency platforms.  [8 May 2024]

​​​​​​​​​​​​​​5. MAS: Parliamentary Question on measures to increase the attractiveness of the Singapore equities market

The MAS has published a written response to a Parliamentary Question on the adequacy and effectiveness of existing measures to increase the attractiveness of the Singapore equities market. The response highlights a number of measures implemented by the Singapore Exchange Group (SGX), such as providing a range of funds to support high-growth enterprises, progress in Depository Receipt (DR) listings, fostering cross-border partnerships to broaden market access and improve market liquidity. The response also notes, however, that market conditions remain challenging.  [8 May 2024]

6. MAS: Parliamentary Question on use of COSMIC

The MAS has published a written response to a Parliamentary Question on whether a digital platform for the collaborative sharing of ML, terrorism and proliferation financing (TF) information and cases, along the lines of MAS’ Collaborative Sharing of ML/TF Information and Cases (COSMIC), may be designed for use by other gatekeepers such as law firms, trust and company service providers and accounting firms.

In its response, the MAS explains that due consideration for its governance, effectiveness, and safeguards in the design of COSMIC. While there is potential to study the usefulness of such a model for other sectors at a later stage, the initial focus will be on banks, and learning from the experience. MAS is taking a phased approach, starting with six major commercial banks, before considering the expansion of COSMIC to a wider segment of the financial sector in subsequent phases.  [7 May 2024]

7. MAS: Parliamentary Question on enhancing penalties against bank employees who engage in poor or misleading sales and advisory practices

The MAS has published a written response to a Parliamentary Question on enhancing existing penalties against bank employees who are found to have engaged in poor sales and advisory practices, in cases brought to the Financial Industry Disputes Resolution Centre (FIDRC).

The MAS notes that, under the FAA, financial advisory representatives must, among other things, disclose material product information, have a reasonable basis for making recommendations, and not make false or misleading statements. Where mis-selling has taken place, the MAS may take a range of enforcement actions, depending on the severity of the case. These include public reprimands, composition penalties, and prohibition orders. The MAS' enforcement actions are independent of whether the case is lodged with the FIDRC. In egregious cases, matters will be referred to the Attorney-General’s Chambers and, if applicable, to the Singapore Police Force.  [7 May 2024]

China

1. Ministry of Finance consults on draft corporate sustainability disclosure standards (basic standards)

The Ministry of Finance has published its draft "Corporate Sustainability Disclosure Standards - Basic Standards" (with drafting notes) for public consultation.  Feedback is required to be submitted by 24 June 2024. This is part of China's efforts to promote the development of the sustainability disclosure regime and standardise the disclosure of corporate sustainability-related information. 

Currently, corporate sustainability disclosures in China are largely voluntary and are based on diverse standards, which is not conducive to the development of assurance, ratings and supervision work, or to the role of sustainability information in investment decision making and economic development.

The draft standards were developed in light of the recent formation of the International Sustainability Standards Board (ISSB) and the publication of global standards S1 (general requirements for disclosure of sustainability-related financial information) and S2 (climate-related disclosures). The draft basic standards are designed to align with ISSB standard S1.  They include provisions on the objectives, scope, disclosure principles, quality of information to be disclosed, content of disclosure, and other disclosure requirements.

The national sustainability disclosure framework will comprise of the basic standards (presently under consultation), specific standards, and application guidelines.  China aims to establish the framework by 2030.  [22 May 2024]

2. China considering Hong Kong proposal to waive dividend tax on Hong Kong stocks bought via Stock Connect

According to a report by The Standard, China is considering a proposal to exempt individual investors from paying a 20% dividend tax on Hong Kong stocks bought via the Stock Connect.

The proposal, submitted by Hong Kong, aims to avoid double taxation and align the arrangements for investors on both sides of the Stock Connect. Chinese regulators, including the China Securities Regulatory Commission and the State Taxation Administration, are currently reviewing the proposal.

A final decision has not been made, and there is no definite timeline for implementation. However, the Hong Kong SFC has expressed hopes of implementing the proposal within this year.  [10 May 2024]

3. AMAC releases Operational Guidelines for Private Securities Investment Funds for implementation on 1 August 2024

The Asset Management Association of China (AMAC) has published its Operational Guidelines for Private Securities Investment Funds (Operational Guidelines), which will take effect on 1 August 2024.

In 2023, the legal framework for regulating private investment funds was established with the Regulations for the Supervision and Management of Private Investment Funds and the Private Investment Fund Registration and Filing Measures. In order to fully implement the regulations and standardise the operation of private securities funds, the AMAC has formulated the Operational Guidelines taking into account of views from regulatory authorities and the industry.

The Operational Guidelines contain 42 provisions, covering all aspects of private investment funds, including fundraising, investment and operations. The provisions:

• Strengthen the requirements for fundraising, clarify the initial fundraising and ongoing scale of private equity funds, strengthen investor suitability requirements, and specify stop loss warning arrangements.
• Standardise conduct requirements relating to investment operations, clarify the requirements for investment strategies, emphasise portfolio investment, prohibit multi-layer nesting, standardise requirements for bond investment, over-the-counter derivative transactions and programmatic trading, establish sound internal control systems, strengthen liquidity management, and clarify information disclosure requirements.
• Emphasise the responsibilities of fiduciary management: prohibit disguised guarantees of principal and returns, make it clear that channel businesses are prohibited, and that regulatory requirements cannot be circumvented through over-the-counter derivatives and asset management products, standardise the provisions for performance remuneration, and ensure fair treatment of investors.
• Establish the concept of long-term investment and value investment, standardise the disclosure of past fund performance, guide investors to focus on long-term performance, and strengthen the management of short-term investment behaviour.

In light of industry feedback the AMAC has relaxed the transitional arrangements. [30 Apr 2024]

4. PBOC and SAMR jointly implement new beneficial ownership reporting measures

The People's Bank of China (PBOC) and the State Administration for Market Regulation (SAMR) have jointly issued the "Measures for the Administration of Beneficial Owner Information", which will take effect on 1 November 2024.  The measures are formulated in accordance with the laws and administrative regulations on anti-money laundering and enterprise registration and are designed to increase market transparency, safeguard market and financial order, and prevent and combat money laundering and terrorist financing activities.

As a next step, the PBOC and the SAMR will publish "Guidelines for Beneficial Ownership Information Reporting" in due course to provide specific instructions to the reporting entities and oversee the progress.

The measures introduce an improved reporting system for beneficial ownership information. They specify which entities are required to report such information, establishes a warranty-based exemption rule and the identification criteria for beneficiary owners, and defines the conditions under which the reported information may be accessed and used, thereby enabling more compliant reporting of beneficial ownership information by companies and other entities, and ensuring data privacy and security.

• "Reporting entities" include companies, partnerships and branches of foreign companies, but not self-employed businesses.  Other specified parties, such as unincorporated enterprise legal persons and sole proprietorships, are temporarily not subject to the reporting obligation.
• "Beneficial owner" refers to the natural person who ultimately owns or actually controls the reporting entity, or enjoys its ultimate benefits. For most reporting entities, it is a natural person who (directly or indirectly) ultimately owns more than 25% of the equity, shares or partnership interests of the reporting entity.  [30 Apr 2024]

Taiwan

FS1. C seeks public feedback on data governance consultation document for financial institutions

The Financial Supervisory Commission (FSC) of Taiwan has launched a 60-day consultation on data-related topics such as data sharing, privacy protection, technical applications, data classification, and data governance, seeking feedback on 24 specific questions.

The FSC notes that the rapid development of artificial intelligence has enabled financial institutions to leverage data to train models and analyse customer behaviour, which can improve customer experience and drive innovation in the provision of services. However, public concerns about the use of personal data and privacy protection have also increased. Therefore, in addition to the "Guidelines on Data Sharing among Financial Institutions" issued in 2021, the FSC has now released the present consultation document to address the practical operations of cross-institutional data sharing.

Specifically, the consultation document categorises customer data into four levels, each with corresponding governance requirements:

• Level 1: Original customer data, which requires a high level of protection; 
• Level 2: Data that is still vulnerable to restoration and identification after being processed for privacy protection, which also requires a high level of protection;
• Level 3: Data that is less vulnerable to restoration and identification after being processed for privacy protection, which requires a moderate level of protection; and
• Level 4: Data which does not belong to individual customers (such as statistical data), which requires a low level protection.

The outcome of this consultation will inform the preparation by the FSC of data governance guidelines for data sharing among financial institutions, supporting the development of innovative financial services while ensuring appropriate data protection and governance.  [16 May 2024]

2. FSC revises investment trust incentive program metrics to encourage balanced product development

The FSC has announced revisions to the "Leap Forward Plan", its incentive program for the domestic investment trust industry, to encourage a balanced development of product strategies and asset management talent and capabilities.

1. The revisions make the program more targeted at actively managed funds and encourages domestic investment trust companies to enhance their investment and research capabilities: Passively managed funds (such as index funds, exchange traded funds (ETFs), and ETF-linked funds) will be excluded from the metric relating to delegation of portion of funds to overseas consultants.
2. Passively managed funds will be excluded from the metric requiring investment trust companies to maintain at least three types of funds with an average return rate higher than the industry benchmark.
3. Passively managed funds will be excluded from metrics relating to the minimum number of investment research personnel and average assets under management in the previous three years. The benchmarks for related metrics have also been revised.  [2 May 2024]

3. Taiwan enhances ETF supervisory measures to protect investor interests in light of growth in ETF market

In light of the significant growth in Taiwan's exchange traded fund (ETF) market, the FSC has announced that it is working with industry associations, exchanges and over-the-counter (OTC) trading centres to further enhance supervisory measures for ETFs, focusing on the areas of information disclosure, marketing and advertising activities, and market risk control.

Examples of the enhanced supervisory measures include (see overview in summary document):

• Strengthening the review of fund sales documents, including mechanisms for advance reviews and  subsequent audits;
• Strengthening the review of sales documents for ETF fundraising;
• Enhancing the supervision of joint marketing activities by the industry and internet celebrities;
• Adding warning phrases to the fund names of "high-yield" ETFs, for example, that such funds do not guarantee returns and dividends;
• Approval to be required by the exchange or OTC trading centre where ETFs track and replicate the performance of indices; and
• FSC to supervise exchanges and OTC trading centres, including regularly assessing ETFs' stock holding and establishing transaction databases.  [30 Apr 2024]

Japan

1. FSA and BOJ release report on initiatives undertaken since climate-related scenario analysis pilot exercise in FY 2021 and framework of second exercise to be conducted

The Financial Services Agency (FSA) and the Bank of Japan (BOJ) have published the "Climate-Related Scenario Analysis - Next Step in the Banking Sector", which outlines the initiatives they have undertaken since conducting a climate-related scenario analysis pilot exercise with three major banks in the 2021 fiscal year, as well as the framework of the second exercise to be conducted.

The pilot exercise analysed the impacts of climate-related transition and physical risks on banks' financial conditions through credit risk, covering loans as of the end of March 2021. The FSA and the BOJ published the results and issues to be considered in August 2022.

Since the pilot exercise, the FSA and the BOJ have been engaging in dialogue with financial institutions, including the three major banks. They have conducted various research, such as the FSA's review on the characteristics and usage of scenarios published by the Network for Greening the Financial System, and the BOJ's research papers about their top-down scenario analysis based on short-term scenarios and about issues in designing scenarios. They have also shared insights on scenario analysis with overseas financial authorities at various international fora.

The FSA and BOJ, in cooperation with the three major banks, are preparing to conduct the second exercise of scenario analysis based on common scenarios for climate-related risks in the 2024 fiscal year, to continuously improve the methodology and framework of the scenario analysis. Based on the results of the preliminary analysis of market risk, the FSA and BOJ intend to focus on the impact on loans (credit risk) and its assessment. They also plan to consider, on a trial basis, using a scenario analysis framework to examine the impact of financial institutions' efforts to achieve the emissions reduction targets of investee and borrower companies attributable to financial institutions (financed emissions) and its impact on banks’ loans and other portfolio management.  [10 May 2024]

2. Expert panel holds first meeting on development of Asset Owner Principles, expected to be published in summer 2024

According Regulation Asia, an expert panel set up by the FSA and the Ministry of Economy, Trade and Industry has held its first meeting on developing the Asset Owner Principles, a new code of conduct for venture capital (VC) firms operating in Japan. The principles are expected to be published in summer 2024, and is part of a December 2023 policy plan by the Government to promote Japan as a leading asset management centre.

Regulation Asia reported that discussions at the first meeting focused on the need for VC firms to align their investment and engagement practices with international standards, and to fulfil their fiduciary responsibilities to investors.  It was suggested that the Asset Owner Principles be introduced as best practice guidance (rather than rules) for VC firms seeking to raise funds from domestic and foreign institutional investors, and that the guidance should not be applied to all VC firms uniformly.

The principles are expected to include guidance on areas such as conflicts of interest, compliance departments, information disclosure, and management support to investee companies.  [30 Apr 2024]

Malaysia

1. SCM: Capital markets initiatives announced at GFIEF

The Securities Commission Malaysia (SCM) has welcomed the announcement of two capital market-related initiatives by Prime Minister Anwar Ibrahim at the Global Forum of Islamic Economics and Finance (GFIEF). The initiatives are:

• the establishment of Malaysia’s first social exchange, a structured approach for participation of private capital in projects with positive social outcomes; and
• introducing fundraising for waqf developments through P2P financing and equity crowdfunding platforms, with the Government providing matching funding through the Malaysia Co-Investment Fund (MyCIF) at 0% financing rate.  [28 May 2024]

2. SCM Chair discusses improving financial planning industry

The SCM has published a speech delivered by Chair Dato’ Seri Dr. Awang Adek Hussin, at the Financial Planning Association of Malaysia (FPAM) Annual Signature Financial Planning Symposium 2024. Among other things, the Chair noted the following:

• The economy's moderate growth trajectory will attract more foreign flows and investors into the domestic capital market, giving financial planners opportunities to expand their client base and help existing clients grow their wealth.
• The SCM extends the Digital Innovation Fund (DIGID) grant to mid-tier capital market entities, with revenue of up to RM100 million for projects with cutting-edge solutions that utilise advanced tech, such as generative artificial intelligence (AI) or provide industry-wide tech utility infrastructure.
• The SCM and Federation of Investment Managers Malaysia (FIMM) will issue a guide to help planners and consultants navigate the intricacies of the socially responsible investments (SRI) funds space.
• The SCM and Private Pension Administrator (PPA) will work with private retirement scheme (PRS) providers to develop a digital process for PRS members to switch across funds more seamlessly.  [8 May 2024]

3. SCM signs MoU with IsDB – Islamic capital market, social finance

The SCM has signed a memorandum of understanding (MoU) with the Islamic Development Bank (IsDB) Group on cooperation in Islamic capital market. Under the MoU the parties will collaborate in several key areas. These include facilitating innovation in Islamic fintech, promoting development of Islamic social finance, and encouraging inflow of investments, among others.  [29 Apr 2024]

India

1. SEBI: Master circular for FPIs, DDPs and eligible foreign investors

The Securities and Exchange Board of India (SEBI) has issued a master circular which consolidates a number of circulars issued from time to time in respect of foreign portfolio investors (FPIs), designated depository participants (DDPs) and eligible foreign investors.  [30 May 2024]

2. SEBI circulars – social stock exchange, commodity derivatives

SEBI has published the following circulars:

• Comprehensive guidelines for investor protection fund (IPF) and investor services fund (ISF) for stock exchanges having commodity derivatives segment
• Revision of eligibility criteria for launching commodity futures contracts
• Timelines for disclosures by social enterprises on social stock exchange
• Self-regulatory organisations for social impact assessors in the context of social stock exchange
• Standard operating procedure for handling of stock exchange outage and extension of trading hours thereof in commodity derivatives segment
• Eligibility criteria for launching options with commodity futures as underlying by stock exchanges having commodity derivative segments  [27-30 May 2024]

3. SEBI consultation on AIF valuation

SEBI has issued a consultation on the framework for valuation of investment portfolios of alternative investment funds (AIFs). SEBI is proposing to relax aspects of the framework.  Feedback is requested by 13 June 2024.   [23 May 2024]

4. SEBI consults on amending BRSR requirements

SEBI has published a consultation on the Business Responsibility and Sustainability Report (BRSR). The consultation follows on from recommendations made by an expert group with regard to revising the requirements for BRSRs.  Feedback is requested by 12 June 2024.  [22 May 2024]

5. SEBI issues Master Circulars for stockbrokers, investment advisers, research analysts and listing obligations and disclosure requirements

SEBI has issued the following Master Circulars:

• stock brokers;
• investment advisers;
• research analysts; and
• listing obligations and disclosure requirements for non-convertible securities, securitized debt instruments and/or commercial paper.  [21 & 22 May 2024]

6. RBI Bulletin May 2024 – DeFi article

An article in the latest RBI Bulletin focuses on the implications for the financial system of decentralised finance (DeFi).  The RBI identified the following as highlights of the article:

• Volatility in DeFi returns is far greater than traditionally higher yield providing asset classes such as equity returns.
• Major global financial institutions have direct exposure to the crypto system, although the overall exposure to total assets under management is estimated to be low.
• The empirical analysis indicates that DeFi returns and volatility in the returns are mainly driven by speculative motive.
• The empirical evidence suggests increasing volatility in DeFi with respect to the volatility of foreign exchange market and stock market.
• On account of the borderless feature of DeFi, spillover by liquidity linkages across countries is a major risk.
• As DeFi continues to evolve and mature, and its interaction with the traditional financial system grows, its utility against risks demands further analysis.  [21 May 2024]

​​​​​​​​​​​​​​7. SEBI issues master circulars – ESG, CRAs

SEBI has published the following master circulars:

• Master Circular for ESG Rating Providers (ERPs);
• Master Circular for Debenture Trustees (DTs);
• Master Circular for Credit Rating Agencies (CRAs);
• Master Circular for Infrastructure Investment Trusts (InvITs); and
• Master Circular for Real Estate Investment Trusts (REITs)

The master circulars have gathered all of the applicable circulars and directions issued by SEBI from time to time in one place, including certain modifications to those provisions. The provisions of the master circulars have immediate effect.  [15 & 16 May 2024]

8. SEBI: Certification requirement for key investment team of managers of AIFs

SEBI has issued a circular which instructs that the key investment team of the manager of an alternative investment fund (AIF) must have at least one key personnel with relevant certification, as may be specified by SEBI from time to time, as an eligibility criterion for obtaining certification of  registration as an AIF. The provisions of the circular have immediate effect.  [13 May 2024]

9. IFSCA: Issuance of derivative instruments against Indian securities by non-bank entities

The International Financial Services Centres Authority (IFSCA) has decided to permit IFSCA registered non-bank entities, registered with SEBI as FPIs, to issue Derivative Instruments with Indian securities as underlying, in the GIFT International Financial Services Centre (GIFT-IFSC).  [2 May 2024]

10. IFSCA: Facilitating investments by NRIs and OCIs into Indian securities

Following discussions with SEBI and other authorities to facilitate increased investments by non-resident Indians (NRIs) and overseas citizens of India (OCIs) in the Indian securities through IFSC based FPIs, the IFSCA has approved two alternative routes for increased participation in Indian securities by NRIs and OCIs.  [2 May 2024]

11. SEBI: Registration of portfolio management services distributors with APMI

SEBI has issued a circular instructing all persons and entities involved in the distribution of portfolio  management services to register with the Association of Portfolio Managers in India (APMI). Portfolio managers are expected to ensure that any person or entity engaged in the distribution of its services has obtained registration with APMI in accordance with the criteria laid down by APMI.  [2 May 2024]

12. SEBI: Ease of doing business – fund manager for commodity based funds, nomination for mutual fund unitholders

SEBI has published circulars which aim to simplify and ease compliances under various SEBI Regulations. Accordingly, SEBI has decided that appointment of a dedicated fund manager shall  be optional for commodity based funds such as gold exchange-traded funds (ETFs), silver ETFs and other funds participating in commodities market. Furthermore, it has been decided that the requirement of nomination specified under clause 17.16 of the master circular for mutual funds shall be optional for jointly held mutual fund folios.  [30 Apr 2024]

13. RBI consults on Reserve Bank of India (Electronic Trading Platforms) Directions, 2024

The RBI has published a consultation on the draft master direction: Reserve Bank of India (Electronic Trading Platforms) Directions, 2024. The Directions are issued to entities operating electronic trading platforms on which transactions in eligible instruments, as defined under the Directions, are contracted.

Comments on the draft Directions are invited from electronic trading platform operators, banks, market participants and other interested parties by 31 May 2024.  [29 Apr 2024]

Thailand

1. SECT consults on amendments to rules on record keeping of digital asset business operators

The Securities and Exchange Commission Thailand (SECT) has published a consultation on proposed amendments to the regulations regarding record keeping of digital asset business operators to ensure that their information is accurate, complete and updated, enabling effective and timely monitoring and supervision.

Responses to the consultation are requested by 30 May 2024.  [15 May 2024]

2. SECT consults on capital requirements for securities companies and derivatives business operators offering digital asset services

The SECT has published a consultation on draft regulations concerning capital requirements for securities companies and derivatives business operators who also engage in digital asset businesses. The draft amendments are aimed at: enhancing suitability and consistency with current market development; promoting timely adjustments to protect digital asset traders adequately; and ensuring that both digital asset operators involved in securities or derivatives activities and those exclusively focused on digital asset services comply with similar standards and rules.

Responses to the consultation are requested by 27 May 2024.  [10 May 2024]

3. SECT reiterates prohibition on meme token services by digital asset exchanges and warns digital asset brokers against misleading investor

The SECT has issued a statement reiterating that, pursuant to the current rules for undertaking digital asset business, digital asset exchanges are prohibited from listing meme tokens. This is to maintain orderliness in digital asset trading and protect investors against unfair activities as well as mitigate the risk of price manipulation, as meme tokens lack fundamental factors and rely on individual preferences.

The SECT states that any entity holding both digital asset exchange and brokerage licenses intending to offer meme token trading services must send such trading orders to sourced exchanges solely in their capacity as broker, without misleading the general public into believing that the orders are serviced by digital asset exchange. Moreover, influencers and trading partners must also adhere to this principle.  [7 May 2024]

Philippines

1. BSP-supervised financial institutions required to report significant ML/TF/PF risk events within 24 hours pursuant to latest amendments

The Bangko Sentral ng Pilipinas (BSP) has issued Circular No. 1193, which amends the provisions of Sections 911 and 911-Q of the Manual of Regulations for Banks and Manual of Regulations for Non-Bank Financial Institutions respectively, in respect of the money laundering (ML), terrorist financing (TF), and proliferation financing (PF) risk reporting and notification requirements for BSP-supervised financial institutions.  The circular takes effect 15 calendar days following its publication either in the Official Gazette or in a newspaper of general publication.

• Covered persons are required to submit a ML/TF/PF Risk Event Report to the BSP within 24 hours of knowledge or discovery of any significant ML/TF/PF risk event, ie, an ML/TF/PF-related incident that may have a material and/or adverse impact on the covered person, the financial system's [posture, or erode public confidence therein.
• An ML/TF/PF risk event is significant and reportable if (a) the amount involved represents 1% or more of the covered person's total qualifying capital, or (b) regardless of the amount involved, the covered person has determined that the ML/TF/PF-related incident has material impact on the covered person and/or the financial system, such as those affecting a significant number of customers or counterparties, with cross-border element, or those that are or may be widely covered in adverse media reports.
• The ML/TF/PF Risk Event Report should contain the information specified in the amended regulations. The BSP may require covered persons to provide additional information, documents and/or updates as necessary, or conduct examinations.
• Compliance with the ML/TF/PF risk event reporting does not preclude covered persons from complying with BSP's other existing reporting and notification requirements.

These amendments aim to enable the BSP to have timely and accurate information on significant ML/TF/PF-related risks, enhancing its risk-based supervision of such risks.  [29 Apr 2024]

Indonesia

[No update for May 2024]

Vietnam

[No update for May 2024]