New Measures Enforce Tighter Regulations on Nominee Directorships and Corporate Service Providers
On July 2, Singapore’s Parliament passed two bills to strengthen the country’s anti-money laundering (AML) laws. The amendments impose stricter regulations on Corporate Service Providers (CSPs) and companies, aiming to curb financial crime. Notably, CSPs must now ensure nominee directorships are arranged only by them, unless the nominee is the sole proprietor of a registered CSP. Violations can incur fines of up to S$10,000. CSPs are also required to ensure that nominees are “fit and proper,” or risk fines of up to S$100,000.
The changes come as part of a wider regulatory shift to tighten oversight of CSPs. Second Finance Minister Indranee Rajah clarified that CSPs must assess nominees’ conduct, compliance history, integrity, and qualifications before appointing them as directors. Companies must also ensure the suitability of their nominee directors and take action if concerns arise after an appointment.
The amendments also introduce higher fines for CSPs failing to comply with AML obligations, raising penalties from S$25,000 to S$100,000. Similarly, companies and limited liability partnerships (LLPs) that fail to maintain accurate records will face increased fines, up to S$25,000. False or misleading information provided to the Accounting and Corporate Regulatory Authority (Acra) will also incur penalties.
While the new measures have been developed in response to increasing financial crime concerns, including the S$3-billion money laundering case from last year, Indranee emphasized that these changes were in progress well before the case surfaced. The revised laws aim to ensure that all entities offering corporate services from Singapore, whether serving local or international clients, adhere to the same stringent standards in the fight against financial crime.
