Asia Pacific Financial Services Regulatory Updates, Quarter Three 2023

Regulatory developments strengthening AML/CFT controls and practices to detect and mitigate risks were at the forefront. Controls have been tightened across Asia Pacific including Philippines, Singapore and Vietnam. In Singapore, the Monetary Authority of Singapore (MAS) collaborated with the Commercial Affairs Department to investigate a criminal and money laundering syndicate that led to the seizure/freezing of USD$2.05 billion worth of assets.

Regulators have also issued additional guidance on risk assessment and reporting, proliferation financing, misuse of legal persons and arrangements, and digital assets.

Digital Finance and Technology is another topic that is top of mind for regulators. Australia released a report with findings from a joint research project which explored the potential for a central bank digital currency (CBDC). Whilst CBDCs can facilitate ‘smarter payments’, legal and operational issues would need to be addressed. In Hong Kong, the Hong Kong Monetary Authority (HKMA) unveiled a ‘FinTech Promotion RoadMap’, with the goal of promoting collaboration and building a sustainable fintech ecosystem.

Policy initiatives are continuously being rolled out across markets to foster a conducive environment for digital transformation. These policy initiatives have emphasised promoting fintech adoption, nurturing the fintech ecosystem, enhancing data infrastructure, and cultivating talent with fintech expertise.

To harness the potential of digital advancements, Financial Institutions need to continuously invest in key areas, such as enhancing user experience and trust, securely adopting advanced technologies, and cultivating talent in relevant domains.

Cybersecurity measures need to maintain agility in the ever-evolving geo-political climate and the increased use of distributed ledger technology. The recent cybersecurity stock take completed in Australia exposed several control gaps: (i) incomplete identification and classification of critical and sensitive information assets; (ii) limited assessment of third-party information security capability; and (iii) inadequate definition and execution of control testing programs. Financial Institutions need to enhance their practices to combat heightened risks. The Securities and Exchange Board of India has issued a consultation paper on the Consolidated Cybersecurity and Cyber Resilience Framework that proposes a common structure to cybersecurity using a graded approach.

For queries or more information on these updates or other regulatory topics, please get in touch.