Our Asia team recently presented to a group of over 60 private wealth industry attendees, exploring the Monetary Authority of Singapore (MAS)’s latest anti-money laundering and countering the financing of terrorism (AML/CFT) framework updates, effective from 1 July 2025. The session focused on implications for trustees and practical steps to enhance compliance operations, revealing several critical themes shaping the regulatory landscape.
1. Regulatory alignment with global standards
MAS has revised its AML/CFT Notices and Guidelines to align more closely with Financial Action Task Force (FATF) recommendations. These updates include:
- The inclusion of proliferation financing (PF) in money laundering (ML) and PF risk assessments in ML/terrorism financing risk assessments
- Expanded definitions such as “trust relevant party” and “object of a power”, broadening the scope of customer due diligence (CDD)
- A stronger emphasis on beneficial ownership transparency and clarification of expectations regarding source of wealth (SoW) establishment on higher risk trust relevant parties that contribute assets to the legal arrangement
- Revisions to streamline timing of suspicious transaction reports (STRs) filings
- Clarity on screening expectations, including the use of native search engines
These changes reflect Singapore’s commitment to maintaining its reputation as a trusted and reputable financial hub while addressing vulnerabilities identified in recent MAS risk assessments.
2. Heightened expectations for trustees
Licensed trust companies (LTCs) now face more rigorous AML/CFT compliance requirements. Key implications include:
- Expanded due diligence obligations covering protectors, classes of beneficiaries, objects of a power, and individuals with authority over trust assets
- Shortened timelines for filing STRs, particularly for sanctioned parties
- Clarified requirements for charitable trusts and effective controllers, with a focus on documentation and risk assessment
- Collecting detailed information on trust deeds, purpose of set-up and place of administration
- Implementing internal processes to share CDD and SoW information across business units
- Recognising and reporting high-risk indicators, such as shell company traits or unusual account behaviour
These updates underscore the need for trustees to reassess their internal frameworks and ensure alignment with the new regulatory expectations.
3. Practical steps to operationalise compliance
A clear three-step recommended approach to translate AML/CFT compliance frameworks into practical, operational workflows is outlined below:
- Step 1: Taking stock: Conduct AML/CFT health checks by reviewing your firm’s existing control framework and performing a gap analysis, all while ensuring teams establish clarity and stay informed of existing requirements and emerging risk typologies
- Step 2: Crafting the agenda: Develop a tailored compliance roadmap, prioritising key enhancement areas and objectives using a technology-led, evidence-based approach in automating key functions in your workflows while ensuring senior management involvement throughout the journey
- Step 3: Ensure robustness: Implement quality assurance processes on a regular basis to ensure audit readiness, allowing for refinement as appropriate
This structured methodology enables LTCs to develop compliance frameworks that are robust and adaptable, creating a foundation that can constantly evolve alongside regulatory requirements and business priorities.
4. Common pitfalls and enforcement trends
Recent MAS enforcement actions (2020–2025) have highlighted recurring issues:
- Inadequate customer risk assessments and failure to perform enhanced CDD
- Lapses in transaction monitoring, especially in detecting and following up on SoW discrepancies
- Lack of documentation for screening results and audit trails
- Insufficient practical guidance in internal policies and training materials
AML/CFT isn’t a one-off exercise but a continuous, risk-based process. By embedding compliance into the organisation’s DNA, LTCs can better manage risks and demonstrate accountability to regulators proactively, avoiding regulatory penalties.
The 2025 MAS AML/CFT updates formalise existing expectations and practices for trustees to strengthen internal controls, enhance transparency, and reinforce trust with clients and regulators alike. Proactive engagement of senior management, continuous learning and a robust compliance culture will be key to navigating this new era of regulatory expectations in Singapore’s evolving financial landscape.
