Automa8e is dedicated to empowering Corporate Service Providers (CSPs) in navigating the complexities of Singapore’s new 2024 ACRA CSP Bill. As regulations tighten, CSPs face increased responsibilities to meet stringent compliance standards related to Anti-Money Laundering (AML), Counter Financing of Terrorism (CFT), and Proliferation Financing (PF). Automa8e offers cutting-edge tools and solutions that help CSPs seamlessly align with these new requirements, minimizing the risk of non-compliance and ensuring that businesses operate within the legal framework. By leveraging Automa8e’s technology, CSPs can confidently manage their compliance obligations, avoid hefty penalties, and focus on growing their core operations.
How Automa8e Can Help with Compliance Under Singapore’s New CSP and CLLPMA Bills
Automa8e provides advanced tools and solutions designed to help Corporate Service Providers (CSPs) effortlessly comply with the new regulatory requirements. These tools minimize the risk of non-compliance and ensure that businesses operate within the legal framework, adhering to the new standards set by the CSP and CLLPMA Bills.
How can Automa8e help with verifying customers and beneficial owners?
- Automa8e KYC Verification: Automa8e helps ensure compliance with Know Your Customer (KYC) requirements by accurately verifying the identity of all clients and their beneficial owners. This is crucial under the new regulations, which demand heightened scrutiny to prevent financial crimes.
What support does Automa8e offer for nominee directors?
- Tools for Nominee Directors: Automa8e provides tools to assist nominee directors in performing reasonable diligence, as mandated by Section 157(1) of the Companies Act 1967. This ensures that nominee directors meet the “fit and proper” criteria required under the new laws, helping to avoid penalties.
How can Automa8e assist with monitoring financial transactions?
- Automated Financial Monitoring: Automa8e streamlines the monitoring of deposits and withdrawals to maintain robust financial oversight. This automation helps businesses stay compliant with the Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) obligations introduced in the new CSP Bill.
What role does Automa8e play in reviewing transactions?
- Thorough Transaction Reviews: Automa8e facilitates a thorough review of transaction supporting documents, ensuring that all activities are properly documented and compliant with the new regulations. This reduces the risk of accidental non-compliance that could result in fines.
How does Automa8e help with identifying suspicious activities?
- Suspicious Activity Alerts: Automa8e provides automated alerts and detailed reports for any suspicious activities, allowing businesses to take proactive measures to comply with the new laws and avoid potential penalties.
Can Automa8e assist with ongoing KYC compliance?
- Annual KYC Automation: Automa8e automates the annual KYC procedures to ensure that businesses consistently meet regulatory standards, making compliance easier and more reliable over time.
These features make Automa8e an essential partner for businesses navigating the new regulatory landscape in Singapore, helping them avoid severe penalties and imprisonment associated with non-compliance.
New Corporate Service Provider Regulations
In July 2024, Singapore passed two key bills—the Corporate Service Providers Bill (CSP Bill) and the Companies and Limited Liability Partnerships (Miscellaneous Amendments) Bill (CLLPMA Bill)—aimed at strengthening regulations for Corporate Service Providers (CSPs) and increasing transparency in corporate ownership.
What is the purpose of the CSP and CLLPMA Bills?
The Corporate Service Providers (CSP) Bill aims to strengthen the regulatory framework for the CSP sector. The Companies and Limited Liability Partnerships (Miscellaneous Amendments) (CLLPMA) Bill focuses on improving transparency regarding the beneficial ownership of companies and LLPs. Both Bills seek to ensure that Singapore’s regulations align with the standards of the Financial Action Task Force (FATF).
Key Changes Introduced by the CSP and CLLPMA Bills
The Bills will introduce the following key changes:
(a) Mandatory Registration: All business entities providing corporate services in and from Singapore must register with ACRA as Corporate Service Providers (CSPs).
(b) Compliance Obligations: Registered CSPs must adhere to anti-money laundering, counter-terrorism financing, and anti-proliferation obligations (AML/CFT/PF obligations).
(c) Fines for Non-Compliance: Breaches of AML/CFT/PF obligations by registered CSPs and their senior management will result in fines.
(d) Nominee Director Regulations: Individuals cannot act as nominee directors by way of business unless their appointments are arranged by registered CSPs, who must assess them as fit and proper.
(e) Disclosure Requirements: Nominee directors and shareholders must disclose their nominee status and the identities of their nominators to ACRA under the CLLPMA.
(f) Increased Fines: There will be higher fines for non-compliance with the Register of Registrable Controllers, the Register of Nominee Directors, and the Register of Nominee Shareholders under the CLLPMA.
Common FAQs on Singapore New Corporate Service Provider
Here is the list of common FAQs on Singapore’s new corporate service regulations address key concerns such as who needs to register as a Corporate Service Provider (CSP), what the new compliance obligations entail, and the penalties for non-compliance. They also cover the requirements for acting as a nominee director and the need for increased transparency in disclosing nominee directors and shareholders. These FAQs provide a simplified overview to help businesses understand and prepare for the regulatory changes aimed at preventing financial crime and ensuring alignment with international standards.
Q: What new laws were passed in Singapore regarding Corporate Service Providers?
A: On July 2, 2024, the Singapore Parliament passed two new bills: the Corporate Service Providers Bill (CSP Bill) and the Companies and Limited Liability Partnerships (Miscellaneous Amendments) Bill (CLLPMA Bill). These laws aim to improve regulations for Corporate Service Providers (CSPs) and increase transparency around the ownership of companies and limited liability partnerships.
Q: Why were these new laws introduced?
A: The new laws were introduced to combat financial crime and ensure that Singapore’s regulations align with the international standards set by the Financial Action Task Force (FATF).
Q: Who needs to register as a CSP under the new CSP Bill?
A: All business entities that provide corporate services in and from Singapore must register with ACRA as registered CSPs. Corporate services include the following:
- Forming business entities
- Acting as or arranging for persons to act as directors or nominee shareholders
- Transacting with ACRA on behalf of others or serving as a company’s secretary as part of business activities
- Providing a registered office or business address for business entities
- Conducting transactions for customers related to any designated activities (refer to the question below for a list of designated activities) involving the provision of accounting services.
Q: Do all business entities providing accounting services have to register as CSPs?
A: A business entity providing accounting services must register as a CSP only if it engages in any designated activity related to the provision of accounting services. Public Accounting Entities (PAEs) registered under the Accountants Act are not required to apply to ACRA for CSP registration if they only perform designated activities related to accounting services. These PAEs are considered registered as CSPs. However, they must provide ACRA with details of at least one registered qualified individual. If not, each key appointment holder of the PAE who is also a public accountant will be treated as a registered qualified individual.
Q: What are the penalties for not registering as a CSP with ACRA?
A: A person conducting business in Singapore by providing any corporate service without being registered as a CSP for that type of service is committing an offense. The penalties include a fine of up to $50,000 and/or imprisonment for a term not exceeding 2 years. Additionally, the unregistered CSP may face a further fine of up to $2,500 for each day the offense continues after conviction.
Q: Do individuals, such as employees of entities providing CSP services, need to register as CSPs?
A: The registration requirements only apply to business entities and do not include individuals who transact with ACRA as authorized employees of a registered CSP.
Q: What are the requirements for CSPs regarding performing customer due diligence measures?
A: A registered CSP must perform customer due diligence measures before providing any corporate service to a customer. This is especially necessary if there are suspicions of money laundering, terrorism financing, or proliferation financing, or if there is doubt about the accuracy or adequacy of previously obtained information. Customer due diligence measures must be completed before any transactions are submitted to ACRA.
Q: What are the counter-proliferation financing (CPF) requirements for CSPs?
A: Implementing CPF measures will be similar to CSPs’ existing duties to counter money laundering and terrorism financing. CSPs must screen against sources of information, such as the United Nations Act. The specific sources of information will be prescribed in subsidiary legislation, and ACRA will also issue guidelines to help the industry understand and recognize proliferation financing.
Q: What are the group-wide policy requirements for CSPs?
A: CSPs must implement group-wide programs, including policies and procedures to manage and mitigate the risks of money laundering, terrorism financing, and proliferation financing. They must also share relevant information within the group, such as among subsidiaries. Further details will be provided in the subsidiary legislation and guidelines.
Q: Do all nominee directors need to be appointed through CSPs?
A: Nominee directors appointed for business purposes must be appointed through CSPs. CSPs must ensure that the nominee directors they appoint are fit and proper. However, employees appointed as directors for their own company or a related company do not need to be appointed through CSPs.
Q: What steps should registered CSPs take to determine if a nominee director is fit and proper?
A: Registered CSPs must assess whether a person is fit and proper to act as a nominee director by considering factors such as:
- Satisfactory conduct and compliance history
- Sufficient competency, capacity, and capability to properly fulfill their duties as a director
- Demonstration of commercial integrity
CSPs should also update their internal policies to include procedures for assessing the fitness and propriety of individuals for nominee director roles. More specific details will be provided in subsidiary legislation and guidelines.
Q: Will the requirement for CSPs to assess whether the individual is fit and proper be applied retrospectively?
A: The new requirement to assess fitness and propriety will not apply retrospectively to existing nominee director appointments. However, it is advisable to periodically review the fitness and propriety of these individuals, especially if they act as nominee directors for multiple clients of the CSP.
Q: When do these new laws take effect?
The amendments have not yet taken effect. ACRA will announce the effective date in advance and provide time for businesses to comply with the new requirements.
Q: How should businesses prepare for these changes?
- CSPs should ensure they are registered with ACRA and update internal policies to comply with the new regulations.
- Businesses offering nominee director services should verify that their nominee directors meet the fit-and-proper requirements.
- Companies using nominee directors or shareholders should be aware that their nominee status will be publicly available.
These FAQs simplify the legal jargon and make the information easier to understand for a broader audience.
David’s Talk
David Lau, Founder – Automa8e, will be addressing the key challenges faced by Corporate Service Providers (CSPs) under Singapore’s new 2024 CSP and CLLPMA Bills, and how Automa8e can help CSPs stay compliant and avoid severe penalties.
Join us at 3:30 PM on the 16th of August at the ISCA event.