Singapore is experiencing strong growth in wealth inflows, despite financial institutions tightening their onboarding processes following last year’s $3 billion money laundering case, according to Chia Der Jiun, Managing Director of the Monetary Authority of Singapore (MAS).
To further support this growth, MAS is working to reduce the processing time for its tax incentive scheme, aiming to return to a three-month wait time by early next year.
During a briefing for MAS’ annual report for the financial year 2023/24, Chia noted that the extended wait times for onboarding new clients aren’t affecting all cases. In instances where documentation is clear, there hasn’t been a significant issue.
“The wealth management industry in Singapore thrives on strong regulations, high standards, and legitimate wealth,” Chia said. “This hasn’t impacted the robustness of the sector.”
The longer wait times for the tax incentive scheme are primarily due to a surge in applications over recent years, which has created a backlog. Leong Sing Chiong, Deputy Managing Director of the Markets and Development Group at MAS, mentioned that teams are implementing various measures to clear this backlog by the year’s end.
Chia emphasized that last year’s money laundering case has neither altered Singapore’s growth trajectory nor its commitment to high regulatory standards.
“We welcome legitimate wealth, and the banks understand this. They are applying their standards to support and facilitate legitimate wealth,” he added.
Addressing competition from other wealth hubs like Hong Kong and Dubai, Chia stated, “We don’t view this as a race or competition with other wealth centres.”
Most of MAS’s supervisory engagements with financial institutions linked to the money laundering case have been completed, and MAS is now reviewing the findings to decide on appropriate actions.
Regarding the involvement of some single-family offices (SFOs) in the case, Chia highlighted that Singapore had already introduced enhancements for SFOs last year. These enhancements include the requirement for SFOs to have a bank account with a regulated financial institution in Singapore, which can conduct due diligence on the family office. Additionally, broader due diligence checks on SFOs applying for tax incentives were also introduced.
Chia acknowledged the challenges facing Singapore’s equity market, including low initial public offering volumes and liquidity. However, he stressed that this is not unique to Singapore and pointed out the city’s diversified financial activities, including a strong asset management industry, banking and insurance sectors, and debt capital markets.
MAS has been actively supporting the development of the equity market and will continue to do so. Chia mentioned that MAS is engaging with stakeholders to gather views and discuss the best steps forward.
“There’s probably no silver bullet, but there are good ideas we can work on. We just need more time to reach out to stakeholders in the market,” he concluded.