Compliance
Compliance Corner: MAS, European Union

The latest compliance news: regulatory developments, punishments, guidance, permissions and new product and service offerings.
ESMA, MAS
The
European Securities and Markets Authority, the European
Union’s securities markets regulator, and the Monetary
Authority of Singapore, have agreed on how Singapore’s
financial benchmarks, such as swap rate indices, can be used in
the European Union.
The organisations signed a memorandum of understanding last week.
The MoU signing follows the European Commission’s decision to
recognise that Singapore’s regulatory framework on financial
benchmarks is equivalent to that of the EU.
“This [MoU] will promote greater cross-border connectivity
between our respective financial markets to the benefit of both
regions,” Ong Chong Tee, deputy managing director (Financial
Supervision) of MAS, said.
The traditionally staid business of running financial benchmarks
has been in ferment since the soon-to-be removed LIBOR (London
Interbank Offered Rate) index was hit by a rate-rigging scandal
more than half a decade ago. LIBOR is due to be replaced by a new
system in 2021.
Hong Kong
The Securities
and Futures Commission has reprimanded and fined
BOCOM International Securities Limited HK$19.6 million ($2.53
million) for a range of regulatory breaches, including failures
concerning the handling of third-party fund deposits and the
maintenance and implementation of a margin lending and margin
call policy.
BISL also failed to put in place adequate and effective controls
to identify deposits made into client accounts by third parties,
hence failed to ensure compliance with the Guideline on
Anti-Money Laundering and Counter-Terrorist Financing and various
provisions in the Internal Control Guidelines and the Code of
Conduct, the regulator said in a statement earlier this
week.
The SFC said that third-party deposits made into client accounts
in 2009, 2011 and 2015 by way of cheques and bank transfers were
not identified until 2016.
The regulator said it also found “extensive deficiencies” of
BISL’s margin lending and margin call policy from December 2012
to November 2016.