Yesterday, the Monetary Authority of Singapore (MAS) announced that it had revoked the capital markets services (CMS) license of APICAL Asset Management (AAMPL) over “serious breaches” of its Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) requirements. A formal reprimand was also issued to CEO and Director Yeh Yin Yee and Director Bernard Kan Cheok Yin for failing to keep AAMPL compliant with these regulations.
An inspection by MAS discovered severe deficiencies in AAMPL’s AML/CFT controls from 2013 to 2018. The asset management firm was found to lack basic AML/CFT policies and procedures, heightening the risk of receiving or laundering criminal proceeds. This risk was worsened by the complex ownership structures used by some of AAMPL’s customers, which often consisted of multiple layers and investment entities.
MAS also found that AAMPL has also committed serious breaches of MAS’s AML/CFT requirements under the Notice on Prevention of Money Laundering and Countering Financing of Terrorism – Capital Markets Intermediaries. For one, it did not conduct any enterprise-wide money laundering or terrorist financing risk assessments (EWRA). This is a crucial step in assessing an entity’s vulnerability to money laundering and terror financing risks and developing appropriate measures to address these risks.
Moreover, AAMPL did not properly assess its customers to determine if they presented higher money laundering and terror financing risks (ML/TF). The firm’s ongoing monitoring controls and procedures were also deficient, MAS said, leading to its failure to conduct enhanced monitoring of a fund related to a politically exposed person for a significant length of time. Worse, AAMPL had not subjected its AML/CFT controls to independent audits.
Under sections 95(2)(c) and of the Securities and Futures Act (SFA), MAS has the power to revoke a CMS license if it is satisfied that a holder had not performed its duties efficiently, honestly or fairly. 95(2)(da) also provides for MAS to revoke a CMS license if the holder had failed to satisfy any of its obligations under or arising from the SFA or any written direction issued by MAS. The authority found AAMPL’s AML/CFT deficiencies sufficient to warrant a revocation of its CMS license.
MAS also formally reprimanded directors Yeh -- also the firm’s CEO -- and Kan on the grounds that they were the only directors on AAMPL’s Board, and were thus principally responsible for the management and conduct of the firm’s affairs at all times. It determined that both directors had failed to exercise sufficient oversight or take reasonable steps to ensure AAMPL’s compliance with MAS’s AML/CFT regulations.
Said Loo Siew Yee, Assistant Managing Director (Policy, Payments and Financial Crime) at MAS, “AAMPL’s lack of basic AML/CFT controls despite the heightened money laundering or terror financing risks posed by its clients’ use of complex investment structures was an unacceptable failing warranting licence revocation. MAS will not hesitate to take appropriate action against financial institutions whose policies and controls clearly fail to address the ML/TF risks in their business activities. Board and senior management who fall short in their duties will also be taken to task.
