The Monetary Authority of Singapore has levied a penalty on TMF Trustees Singapore Ltd equivalent to US$274,332 for breaking its anti-money-laundering and anti-terrorist finance rules for trust companies between June 2011 and April 2018. The regulator detected TMF's transgressions on a visit.

TMF Trustees, according to the regulator, failed to verify trust settlors' sources of wealth. These were settlors, moreover, who presented higher risks than usual in respect of money laundering and terrorist finance. TMF believed and relied upon the settlors’ own representations about the sources of their wealth. It accepted bank reference letters from them (i.e. letters that proved that they had relationships with banks) without obtaining additional information.

The regulator says that TMF ought to have (but did not) kept a close eye on the transactions of trust relevant parties (TRPs, which are often people but need not be). MAS Notice TCA-N03 says that they might be: (a) the settlor, the person who creates the trust and transfers assets into the trust; (b) the beneficiary, the person who receives the benefits of the assets; (c) the trustee, the person who holds and manages the assets for the benefit of the beneficiaries; or (d) any person who has any power over the disposition of any property that is subject to the trust. TMF did not scrutinise the transactions of these people to work out whether they were consistent with its knowledge of their businesses, risk profiles and the sources of their funds.

TMF, no doubt at the regulator's prompting, hired a consultant to come up with a 'clean up' plan. It took prompt remedial action to fix all the MAS's objections and prompted TMF to strengthen its AML/ATF governance and controls to prevent future lapses. The company has devoted all its resources to dealing with this crisis, so it has been turning away new business for the last three months.

The MAS defines a trust as a fiduciary arrangement that allows third parties, or trustees such as TMF, to hold assets for the benefit of beneficiaries. It defines settlor as a person who creates a trust and transfers assets into it.

Each breach of Notice TCA-N03 (see above) is an offence punishable under s27B(2) MAS Act, where the maximum prescribed fine is S$1,000,000 per offence. Compared with the United Kingdom, Singapore's regulatory fines have always been on the small side.