MAS consults on revised misconduct reporting for financial institutions - Waystone

      MAS consults on revised misconduct reporting for financial institutions

      On April 2022, the Monetary Authority of Singapore (MAS) issued a Consultation Paper on Revised Notices on Misconduct Reporting Requirements under the Financial Advisers Act, Insurance Act and Securities and Futures Act (Consultation Paper).

      The Consultation Paper is a follow up to an earlier consultation issued by MAS in 2018 and response issued in May 2021.

      To read the initial consultation please click here.

      To read the MAS responses to initial consultation please click here.

      The 2022 Consultation Paper proposes to implement the following key changes:

      1. Extend the scope of Notices on Misconduct Reporting to additional financial institutions i.e. accident and health insurance intermediaries under the Insurance Act and Registered Fund Management Companies under the Securities and Futures Act.
      2. Changes to the categories of reportable misconduct.
        1. Category relating to fraud, dishonesty, and other similar offences revised to include acts involving illegal monetary gains, bribery, money laundering and tax evasion
        2. Category relating to fit and proper guidelines removed.
        3. Category pertaining to noncompliance with regulatory activity or breach of internal policy removed.
      3. Changes to the timeline of notification to MAS
        1. extended the timeline in order that financial institutions have 21 calendar days to report to MAS after the date on which the financial institution had reasonable grounds to believe misconduct has been committed. This was previously 14 days.
        2. the same applies to submitting and Update Report to MAS no later than 21 days after a significant development occurs.
      4. Accompanying reports
        1. Financial institutions are required to file an investigation report and copy of policy report (where available) to MAS.
        2. Required to provide representatives with a copy of any misconduct reports filed with MAS.
      5. Record keeping requirements
        1. keep records in order to demonstrate misconduct reports were filed within stipulated period to the regulator and to the representatives.
        2. record the likelihood of prejudice to any investigation if the filed misconduct reports were not submitted to the representatives of concern.

      The consultation paper closed on 21 May 2022. MAS intends to cancel the current Notice and issue a Revised Notice. MAS will inform financial institutions of the effective date of the Revised Notice in due course and of any adequate transition period.

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