News Flash: ACRA Consultation Papers


ACRA and MOF issued consultation papers in respect of proposed changes to Companies Act, LLP Act and Accountants Act. The consultation period runs from 27 Dec 16 to 13 Jan 17. The full detail of the Consultation can be found here.

In our opinion, whilst some of the proposed changes such as aligning the timeline for AGM and filing of AR as well as removal of common seal legal requirement serve to reduce operating cost, certain proposed changes have rather significant implications that should not be ignored.

Proposed Amendments to Companies Act and LLP Act to Improve Transparency

  • concept of significant controller (25%) is introduced - beneficial ownership

  • register of controllers (with prescribed details) to be kept at registered office

  • register of controllers to be updated within 2 days of notice

  • declaration of updated controller register as part of AR filing

  • register of controllers to be made available to ACRA but not publicly searchable

  • reserved powers for Minister to mandate a central register of all controllers; current proposed is for companies to maintain its own register

For CSPs and RFAs, the concept of UBO is not new given it was part of the ACRA (Amendment) Act legislated in 2015. I suppose beyond the current Register of Directors and Register of Members (shareholders) that RFAs help their clients to maintain, a separate Register of Controllers must be created and maintained in accordance with the new requirements.

In our view, one of the key questions include whether do you assume individual shareholders (i.e. natural person) recorded in the Register of Members as the "Controller" as defined in the proposed amendments? Some kind of declarations by your clients to the effect seem necessary given the responsibility to create, update and maintain this register remains with the company itself. For RFAs who have adopted ACRA's template Customer Acceptance Form, certain safeguards already exist.

Solution: We have created a digitised Customer Acceptance Form, based on ACRA's template, for our customers in which users of Artemis - KYC Automated, will be able to send a secured digital form to their clients for completion. Mandatory selection and declaration on UBO/Controller ensures that you get this part of process automated. These data are then pushed directly into Artemis for risk assessment and screening without the need to re-key. Hence saving you time and resulting in efficiency gain.

Subscribing to a standalone screening database or worse still, trying to manually Google and go through all the ever-changing terrorists and sanction lists seem to be a rather clumsy approach of the past. Smart use of technology to save time, improve accuracy and more importantly, save cost is the way forward given additional regulatory burden.

Proposed Amendments to Accountants Act on EP200

For practising Accountants governed under Accountants Act, it is common knowledge that ISCA issued and updated EP200 in 2015. As pointed out in FATF Mutual Evaluation Report on Singapore, there was "no legally enforceable AML/CFT preventive measures for Accountants in Singapore. FATF noted that for the Accountants, despite the existence of ISCA EP200, there is no clear link to proportionate and issue dissuasive sanctions in case of non-compliance" with EP200.

In response to this, Accountants Act will be amended to clarify that a breach of EP200 will be grounds for disciplinary action under the Accountants Act. This sort of put additional teeth to the implementation of EP200 and possibly vest ACRA, who administers the Accountants Act, the necessary enforcement powers perhaps.

Similar to the legislated requirements for RFAs under ACRA Act and its subsidiary legislations, we believe the clarification will be in the form of specifying EP200 and the CDD requirements in a separate Accountants Rules.

As with all legislation changes, one possible knock-on effect would be that of inspection and enforcement to demonstrate effectiveness. Would ACRA extend the current review of RFAs for compliance with ACRA AML guidelines to Accountants? Or would ISCA step up its inspection team in this regard? After all, there is a large intersection of Accountants providing CSP services to clients.

Solution: Artemis - KYC Automated already allows clients who provide a variety of services to setup different domains for different business lines so that you can adopt a consistent KYC approach within your organisation. Besides, the corporate risk profiling mechanism helps clients to assess AML/CFT risk and screen for PEP/Sanction/Adverse Media in one single step. Time-stamping, audit trail and digital record are also available for inspection should the need arise.

Manually navigating these new legislations with incremental analogue processes and documentation may get you through for a short period of time. It does not provide you the competitive advantage of doing things better and more efficiently in light of additional regulatory requirements.

Future-proof Your Business Today with Artemis - KYC Automated. We are the ONLY forward-thinking AML/KYC solution provider in Singapore at the moment because we design our products based on what you are required to do in accordance with the legislations, not based on what we want to sell to you.

Call us at 6816 2740 or email us at info@cynopsis-solutions.com for a non-obligatory demo today.

#AML #CFT #KYC

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