The Monetary Authority of Singapore (MAS) has released a consultation paper proposing changes to the current cross-border business arrangements legislation.
Under the current exemption framework, financial institutions that wish to make arrangements with their foreign related corporations (FRCs) need to apply to MAS for approval, which happens on a case-by-case basis.
MAS’ proposed changes would discard the current framework and introduce, instead, an ex-post notification approach.
This means that regulated Singapore entities would not need to seek approval from MAS before starting their business with their FRCs, but rather notify the regulator about the business arrangement within 14 days of commencement.
Nonetheless, MAS will monitor and evaluate the risks that could occur from such arrangements and will therefore require financial institutions to submit attestation and information on a periodic basis to prove their compliance with the arrangement requirements.
Such information will include a certification on compliance to the boundary conditions in order to prove that the appropriate safeguards have been established; and key metrics regarding the arrangements so that MAS can monitor their compliance.
The former includes notification requirements, adherence to regulatory status for both the Singapore and foreign entities as well as internal control and annual reports.
The latter requirement, instead, refers to the conditions that will be set out in the legislation as they are not included in the consultation paper.
MAS will be accepting submissions regarding the changes to the cross-border business arrangement legislation until 31 January 2019.