The Monetary Authority of Singapore (MAS) unveiled COSMIC, the inaugural centralized digital platform aimed at facilitating the exchange of customer data among financial institutions (FIs) worldwide to combat money laundering (ML), terrorism financing (TF), and proliferation financing (PF). The commencement of the Financial Services and Markets (Amendment) Act 2023 and its accompanying subsidiary legislation, which establish the legal framework and safeguards for such data sharing, coincided with this launch.
After a public consultation in October 2021, the Financial Services and Markets Act 2022 (FSMA) underwent amendments in May 2023 to provide the legislative groundwork for COSMIC. Under the FSMA, a participating FI in COSMIC may only share customer information with another participant FI if the customer’s profile or behavior triggers specific objectively-defined indicators of suspicion, also known as “red flags.” The FSMA mandates that participant FIs implement policies and operational safeguards to uphold the confidentiality of shared information. This ensures that information on potential criminal activities can be shared while protecting the interests of the vast majority of legitimate customers. Customers are encouraged to promptly respond to FI requests for clarifications on their risk profiles or transactions to facilitate informed risk assessments by FIs.
COSMIC was collaboratively developed by MAS and six major commercial banks in Singapore, namely DBS, OCBC, UOB, Citibank, HSBC, and Standard Chartered Bank. These banks will serve as participant FIs during the initial phase of COSMIC. Currently, information sharing is voluntary and focuses on three primary financial crime risks in commercial banking: (a) misuse of legal entities; (b) misuse of trade finance for illicit activities; and (c) proliferation financing.
Ms. Loo Siew Yee, Assistant Managing Director (Policy, Payments & Financial Crime) at MAS, emphasized, “COSMIC will empower FIs to alert each other about suspicious activities and conduct more informed risk assessments promptly. It complements the industry’s existing collaboration with MAS and law enforcement agencies to combat financial crime. This will enhance Singapore’s capacity to maintain its reputation as a well-regulated and trustworthy financial hub.”
Read More: https://insightssuccess.com
