The Monetary Authority of Singapore (MAS) said on Monday that it was working with the Private Banking Industry Group (PBIG) on measures to streamline account-opening procedures through a “risk-proportionate” approach, as reported by The Straits Times.
The initiatives are expected to bring the median time needed to open a private banking account to within four weeks, compared with the current median of about six weeks, or longer in more complex cases, MAS managing director Chia Der Jiun said.
“More efficient account opening will improve the competitiveness of the wealth management industry while maintaining high standards,” Chia said.
On the same day, MAS issued a circular advising financial institutions to assess a client’s source of wealth in a “risk-proportionate” manner, rather than applying a uniform approach to all clients.
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Marina Bay, Singapore. Photo by Unsplash/Samuel Quek |
Financial institutions should escalate cases to senior management where red flags point to potentially higher-risk concerns, the regulator said in the circular sent to all chief executives and financial institutions.
The circular follows findings by an Account Opening Workgroup, co-chaired by MAS and formed under PBIG, which was tasked with improving account-opening efficiency while preserving robust regulatory standards.
The workgroup identified industry practices that exceeded MAS and international requirements, and reviewed how such practices could be brought back in line with a risk-proportionate approach.
“MAS also takes a risk-proportionate regulatory approach that provides protection and transparency to investors, but avoids undue regulatory burden on financial institutions,” he added, as reported by Channel News Asia. “Innovation has been core to building new capabilities in our financial center.”
He also said that “in a world buffeted by shocks and uncertainty”, there will be demand for safety and stability. “The attributes of safety and stability have been Singapore’s enduring advantage.”
The lengthy process of opening private banking accounts has been a significant challenge for the wealth sector in Singapore, particularly after the 2023 money laundering case in which more than SGD3 billion (US$2.3 billion) in illicit assets were seized in the country.
In that case, a syndicate of foreign nationals channeled proceeds from cross-border fraud and illegal online gambling into Singapore’s financial system to create an appearance of legitimacy.
Following extensive supervisory investigations, MAS imposed composition penalties totaling SGD27.45 million on nine financial institutions.
It also issued prohibition orders of between three and six years against several individuals responsible for overseeing accounts linked to the clients of interest.
Priority or privilege banking services offered by Singapore’s domestic banks generally require clients to have about SGD1.5 million in investable assets to qualify for account opening. A full private banking account, the highest tier of service, typically requires at least SGD6.38 million.
For instance, Citi Private Bank requires clients to have a net worth of US$10 million, while UBS Wealth Management sets a threshold of US$2 million in investable assets. HSBC Premier Elite requires a minimum “total relationship balance” of about US$940,000.
Sourcee.vnexpress.net
