On 12 March 2024, the Ministry of Finance (“MOF”) and the Accounting and Corporate Regulatory Authority (“ACRA”) proposed a new Corporate Service Providers Bill (“CSP Bill”). Public consultation on the CSP Bill just ended on 25 March 2024.
The proposed CSP Bill aims to enhance the regulatory framework for corporate service providers in Singapore, with consequential amendments being made to the Companies Act 1967 and the Limited Liability Partnerships Act 2005.
We highlight three (3) key features of the proposed CSP Bill.
First, any person who carries on a business of providing corporate services is required to register with ACRA as a registered corporate service provider (“Registered CSPs”). This replaces the previous requirement where a person only needs to register with ACRA as a registered filing agent if, in the course of business, that person files transactions with ACRA on behalf of any other person.
This is a regulatory gap that ACRA will seek to address, as customers may engage CSPs who are not registered filing agents to facilitate illicit activities. A breach of this requirement is an offence which carries a fine not exceeding $50,000 or an imprisonment term not exceeding 2 years or both. In the case of a continuing offence, a further fine of $2,500 for every day which the offence continues after conviction.
Second, all Registered CSPs and their senior management will have to comply with all prescribed anti-money laundering/counter-financing of terrorism/proliferation financing requirements.
This amendment will ensure consistency with the Financial Action Task Force Recommendations relating to the detection and prevention of money laundering, the financing of proliferation of weapons of mass destruction and terrorism financing, and that Registered CSPs comply with the requirements of the United Nations Act 2001. Failure to comply with these requirements may result in the Registered CSP and their senior management being fined up to $100,000 for each breach.
Third, a Registered CSP must not arrange for a person to act as a nominee director of a company unless he is satisfied that the person is fit and proper and the Registered CSP must take reasonable steps to satisfy himself that the person is not disqualified from acting as a director of a company under any written law, and consider other factors prescribed in subsidiary legislation.
This proposed amendment aims to prevent the misuse of nominee directorship arrangements in creating shell companies to facilitate money laundering. A breach of this requirement is an offence which carries a fine not exceeding $100,000 for each breach.
Key Contacts: Remy Choo Zheng Xi; Terence Yeo