Singapore has long been a hub for international business, known for its transparency, efficiency, and robust regulatory framework. In a bid to further enhance corporate governance and compliance, the Accounting and Corporate Regulatory Authority (ACRA) has introduced a new Corporate Service Providers (CSP) Bill. This legislation brings forth significant changes aimed at tightening the oversight of corporate service providers and ensuring adherence to Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT), and Countering Proliferation of Weapons of Mass Destruction (CPF) obligations.
Mandatory Registration for Corporate Service Providers (CSPs)
One of the cornerstone changes introduced by the new CSP Bill is the requirement for all business entities engaged in providing corporate services or engaged in designated activities related to accounting services within and from Singapore to register with ACRA as registered CSPs, regardless of filing transactions with ACRA. This move is designed to create a streamlined and regulated environment where only vetted and compliant entities can offer corporate services, thus reducing the risk of illicit activities and ensuring higher standards of service.
Compliance with AML/CFT/CPF Obligations
Registered Corporate Service Providers (CSPs) must now adhere to stringent Anti-Money Laundering, Countering the Financing of Terrorism, and Countering Proliferation of Weapons of Mass Destruction (AML/CFT/CPF) obligations. These measures are crucial in combating financial crimes and ensuring that Singapore remains a safe and reputable business hub. Compliance involves conducting thorough due diligence, monitoring transactions, and reporting suspicious activities. Failure to meet these obligations can lead to severe repercussions, including fines and other penalties.
Regulation of Nominee Directors
The CSP Bill also addresses the issue of nominee directors, individuals who act as directors on behalf of others. Under the new regulations, persons are prohibited from acting as nominee directors by way of business unless their appointments are organized by registered CSPs. Additionally, these CSPs must assess the nominee directors as fit and proper for their roles. This ensures that only qualified and reputable individuals serve as nominee directors, reducing the risk of misuse and enhancing corporate governance.
Disclosure Requirements on Nominee Directors, Nominee Shareholders and Their Nominators
Another significant aspect of the new CSP Bill is the requirement for nominee directors and nominee shareholders to disclose their nominee status and the identities of their nominators to ACRA. This increased transparency is intended to prevent the concealment of true ownership and control, thereby enhancing the integrity of corporate structures in Singapore.
Penalties for Breaches of the CSP Bill for Corporate Service Providers (CSPs)
To enforce the regulatory requirements set forth in the CSP Bill, substantial fines and penalties for breaches have been introduced. The fines apply not only to the registered CSPs but also to their senior management, thereby holding individuals accountable for the actions of their organizations. This heightened level of accountability aims to foster a culture of compliance and diligence across the corporate services sector.
| Breaches | Penalties |
| Failing to register as a registered CSP | Fine up to $50,000, imprisonment up to 2 years, or both; additional fine up to $2,500 per day for continuing offense. |
| Breaching AML/CFT/CPF obligations as a registered CSP | Fine up to $100,000 for each breach. |
| Senior management failing to ensure compliance with AML/CFT/CPF obligations | Fine up to $100,000 for each breach. |
| Acting as a nominee director without arrangement by a registered CSP | Fine up to $10,000. |
| Arranging for a person to act as a nominee director without ensuring they are fit and proper | Fine up to $100,000. |
Increased Fines for offences related to the Registers
Furthermore, the Bill increases fines related to the register of registrable controllers, the register of nominee directors, and the register of nominee shareholders from up to $5,000 to $25,000. These registers are crucial for maintaining transparency about the individuals who ultimately own and control companies. The heightened fines serve as a deterrent against non-compliance and underscore the importance of accurate and timely record-keeping.
Proactive Steps for Corporate Service Providers (CSPs) to Prepare for the Legislation of the CSP Bill
Corporate Service Providers (CSPs) must take proactive steps to prepare for the impending legislation of the CSP Bill to ensure compliance and mitigate potential risks.
First, CSPs should conduct a comprehensive review of their current practices and policies to identify any gaps related to registration, Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT), and Countering the Proliferation of Weapons of Mass Destruction (CPF), as well as other regulatory obligations. It is also important to develop training programs for staff to enhance awareness of the new requirements and instill a culture of compliance within the organization.
If your CSP firm lacks internal AML/CFT Policies, Procedures, and Controls (IPPC) documents, or is uncertain how to develop one, you can purchase a complete and customizable IPPC Template here. This resource can simplify compliance efforts and ensure that all essential protocols are effectively implemented.
Additionally, CSPs are also encouraged to implement technology solutions that streamline the AML/CFT/CPF compliance processes, such as screening platforms and automated reporting and monitoring systems.
One trusted technology solution designed for CSPs in Singapore is SentroWeb® Corporate Secretarial and AML/CFT Solution. This platform allows you to manage comprehensive corporate secretarial tasks alongside anti-money laundering screening, Customer Due Diligence (CDD), automated ongoing monitoring, and auditable recording and reporting functions.
CPS SMEs in Singapore are now eligible for up to 50% Productivity Solutions Grant (PSG) support for the adoption of SentroWeb®, a Pre-Approved Solution under the IMDA SMEs Go Digital programme. Click here to learn more and book a free demo.
By taking these proactive measures, CSPs can better position themselves to navigate the complexities of the regulatory requirements and foster trust with clients and regulators alike.
Conclusion on New CSP Bill in Singapore
The new CSP Bill marks a significant step forward in Singapore’s efforts to bolster corporate governance and compliance. By mandating registration, enforcing AML/CFT/CPF obligations, regulating nominee directors, enhancing disclosure requirements, and increasing fines, the legislation aims to create a more transparent and accountable corporate environment. These changes not only protect the integrity of the financial system but also reinforce Singapore’s reputation as a premier destination for international business.
As the implementation of the CSP Bill progresses, it will be crucial for corporate service providers and businesses to stay informed and compliant with the new regulations. In doing so, they will contribute to a safer, more transparent, and reputable corporate landscape in Singapore.
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