Enhancing Anti Money Laundering and Countering the Financing of Terrorism (AML/CFT) controls within the VCC sector - Waystone

      Enhancing Anti Money Laundering and Countering the Financing of Terrorism (AML/CFT) controls within the VCC sector

      The VCC regime was launched in Singapore in January 2020, and in 2021, MAS conducted an industry-wide survey of VCCs, looking at how selected Eligible Financial Institutions (“EFIs”) have implemented AML/CFT controls for their respective VCCs.

      Some key observations for VCCs and their EFIs are set out below:

      • in some instances, there was insufficient oversight by VCCs of appointed EFIs
      • some VCCs failed to put in place arrangements to oversee the ongoing implementation of AML/CFT controls by their VCCs
      • in some instances, there was no agreed escalation process between its mandated EFI and the VCC to ensure pertinent issues were escalated to the VCC in a timely manner
      • where there was an escalation process, some VCCs failed to specify sufficient details within policies and procedures
      • some VCCs did not indicate that they had appointed an EFI even though it was a Notice requirement.

      In addition, MAS discovered instances where there were gaps in controls, such as:

      • a lack of a robust framework for assessing customers’ ML/TF risks
      • a failure to consider relevant risk factors in assessing country or geographic risks
      • customer risk assessments were not sufficiently documented.

      Supervisory expectations for VCCs and their EFIs

      VCCs should note that they remain ultimately responsible for fulfilling their AML/CFT obligations, and they should ensure that they exercise adequate oversight over their relationship with their EFIs.

      VCCs should also ensure that the AML/CFT policies and procedures (P&Ps) implemented by their EFIs to mitigate money laundering and terrorism financing (ML/TF) risks are appropriate.

      In addition to the responsibility of having defined reporting and oversight obligations and stringent policies and procedures in place, VCCs also need to conduct robust risk assessments to correctly identify, understand and assess the ML/TF risks of their customers, so that they can apply the appropriate customer due diligence and ongoing monitoring measures.

      Ongoing monitoring is key to detecting customers that present higher ML/TF risks post-onboarding.

      These key observations noted in the Circular should help VCCs to better understand their AML/CFT obligations.

      How can Waystone help?

      To find out how Waystone can help, reach out to your usual Waystone representative or contact us below.

       Next post
      Share

      More like this

      SFC Resumes Collection of Annual Licensing Fees

      The Securities and Futures Commission (SFC) issued a circular announcing the resumption of annual licensing fee collections for intermediaries and…
      Read more

      Regulatory Updates July 2025 – APAC Region

      This APAC Regulatory Update includes MAS issues guidance for financial institutions on managing technology and cyber risks from third-party service…
      Read more

      Preparing for an SFC Inspection: A Guide for Licensed Corporations

      As a corporation licensed by the Securities and Futures Commission (SFC) in Hong Kong, strict adherence to regulatory requirements is…
      Read more

      MAS Tightens AML/CFT Rules: Key Changes Every Financial Institution Must Know

      On 30 June 2025, the Monetary Authority of Singapore (MAS) published its finalised response to consultation feedback on proposed amendments…
      Read more

      Managing Climate-Related Risks: A Fund Manager’s Guide

      Climate-related risks pose significant challenges to fund managers. The Securities and Futures Commission’s (SFC’s) requirements, aligned with global standards, emphasise…
      Read more

      SFC Flags Issues in Managing Private Funds and Discretionary Accounts

      In a circular titled “Deficiencies and Substandard Conduct Noted in the Management of Private Funds and Discretionary Accounts,” the Securities…
      Read more

      Navigating MAS Payment Services Act Changes: 2023–2025

      Singapore has emerged as a global leader in payment services regulation, with the Monetary Authority of Singapore (MAS) pioneering a…
      Read more
      Contact us