Anti-Money Laundering/Countering the Financing of Terrorism for Fund Management Companies

What are the types of customer due diligence (CDD) to be conducted?


    • Customer Due Diligence (CDD)
    • Simplified Customer Due Diligence
    • Enhanced Customer Due Diligence 

    The type of CDD to be conducted depends on the level of money-laundering/terrorism financing risk involved in any particular transaction. 


    CDD
    According to MAS (Guidelines)
    last revised 24 April 2015

    6-2-1 Paragraph 6.4 of the Notice (CDD) is applicable to a CMI when it undertakes transactions for customers who or which have not established business relations with the CMI.

    Simplified CDD
    According to MAS (Guidelines)
    last revised 24 April 2015

    Where a CMI applies SCDD measures, it is still required to perform ongoing monitoring of business relations under the Notice.

    7-3 Under SCDD, a CMI may adopt a risk-based approach in assessing whether any measures should be performed for connected parties of the customers.

    7-4 Where a CMI is satisfied that the risks of money laundering and terrorism financing are low, a CMI may perform SCDD measures. Examples of possible SCDD measures include ―

    (a) reducing the frequency of updates of customer identification information;

    (b) reducing the degree of ongoing monitoring and scrutiny of transactions, based on a reasonable monetary threshold; or

    (c) choosing another method to understand the purpose and intended nature of business relations by inferring this from the type of transactions or business relations to be established, instead of collecting information as to the purpose and intended nature of business relations.

    Enhanced CDD
    According to MAS (Guidelines)
    last revised 24 April 2015

    8-1 Where the ML/TF risks are identified to be higher, a CMI shall take enhanced CDD (“ECDD”) measures to mitigate and manage those risks.

    8-2 Examples of potentially higher risk categories under paragraph 8.7 of the Notice include ―

    (a) Customer risk
    ...

    (b) Country or geographic risk
    ...

    (c) Product, service, transaction or delivery channel risk
    ...

    8-3 When considering the ML/TF risks presented by a country or jurisdiction, a CMI should take into account, where appropriate, variations in ML/TF risks across different regions or areas within a country.

    Read more on the specific provisions of MAS' AML/CFT measures, as well as how to implement CDD measures here.