Case Study: MAS Compliance Services Supporting Ongoing Regulatory Alignment in Singapore

Background on Case Study MAS Compliance Services

A licensed financial services company that has its operations in Singapore was diversifying its product range and customer base in several business lines. The company was already licensed and regulated by the Monetary Authority of Singapore (MAS), yet the growing complexity of operations and regulatory review provided new compliance issues.

The management realised that it takes more than periodic reporting to ensure constant compliance with MAS regulations. It requires well-organised governance, an internal control that is clear, risk management and a consistent awareness of the regulatory activities throughout the organisation. To enable this goal, the company has employed our MAS Compliance Services to enable the firm to increase its compliance infrastructure, as well as to enhance long-term regulatory compliance.

The engagement was in place to assist the firm in moving out of its baseline regulatory compliance to a more advanced, scalable, operating model of compliance.

Issues and Challenges

The company was experiencing some of the challenges that are typical of MAS-managed firms.

Regulatory complexity was one of the issues. The regulations of MAS cover various areas, such as the licensing terms, AML/CFT regulations, technological risk management, standards of conduct, and perpetual reporting. The company needed to be helped to understand the application of these demands to its developing business model.

The other problem was the issue of governance and accountability. Although compliance roles were present, there were no roles and escalation procedures clearly defined, therefore, putting the risk of regulatory gaps or inconsistent application across teams.

The issue of operational consistency was also raised. The policies and procedures were adopted at various times of the firm and in various degrees, and this meant that the company would not have a consistent compliance practice as the business units were not uniform in their compliance practices.

There was also added complexity with regulatory change management. Notices, guidelines and thematic reviews are regularly issued by MAS, and the firms need to review applicability and revise their internal structures on that basis. The company did not have an organized way of following and executing regulatory changes.

Lastly, the management wanted to minimize regulatory risk without affecting its commercial agility. Excessively strict compliance controls might inhibit growth whereas inadequate compliance controls might put the firm at risk of supervisory challenges.

Objectives

The main aim of the engagement was to improve the current compliance of the firm with the MAS regulatory requirements in the orderly proportionate manner.

In particular, the company was seeking to:

• Enhance the system of governance and compliance control.
• Make compliance policies and procedures consistent and clear.
• Increase AML/CFT, more advance risk management and internal control systems.
• Develop a sustainable regulatory change management.
• Encourage a compliance culture which goes with business expansion.

The engagement was aimed at making compliance an inseparable component of the operating model of the firm and not a functional unit.

How We Helped

Our approach to MAS compliance advisory was structured and regulator-congruent, depending on the type of licence a firm operated under, its business operations and the size of its organisation.

The interaction initiated with an effectsual compliance health check. We checked the policies, procedures, governance arrangements, and reporting practices against the relevant MAS regulations and guidelines to get the gaps and areas of improvement identified.

On the basis of this evaluation, we collaborated with the management to improve on governance and accountability structures. This involved the clarification of compliance roles and responsibilities, reporting and escalation mechanisms to provide effective oversight on the board and management level.

We assisted with the standardisation and refinement of compliance documentation. The policies addressing AML/CFT, the customer due diligence, the monitoring of transactions, risk management, technology risk, and the standards of conduct were revised and harmonized to be consistent and relevant to the regulation.

The area of concern was regulatory change management. We assisted in creation of an institutionalized mechanism of tracking MAS regulatory changes, evaluating relevance, and making necessary modifications in a time-sensitive and recorded fashion.

Our practical advice on how to incorporate compliance into daily operations was also given. This also had a compliance advisory on staff training, compliance monitoring activities, internal controls and also management reporting to help in continuing compliance assurance.

Where applicable, we facilitated readiness of regulatory reviews and supervisory engagements by assisting the management to systematize documentation, demystify responses and reinforce internal preparedness.

During the engagement, we collaborated with the management to map MAS regulatory expectations into operational scaled compliance practices that facilitated regulatory integrity, as well as, commercial goals.

Value Delivered

This case study illustrates the way that professional MAS Compliance Services may assist regulated entities in sustaining effective and sustainable regulatory alignment.

The engagement enabled the firm to advance towards a more mature and resilient compliance operating model, through the fortification of governance frameworks, compliance framework standardisation and regulation awareness. The systematic method also enhanced the internal trust towards handling of regulatory requirements and reaction to the supervisory demands.

The resulting MAS compliance framework was a strong base on which continuous regulatory compliance, business expansion, and supervisory interaction in the regulated financial environment in Singapore were to be continued.