MAS launches consultation paper on controls against market abuse

It proposes to tighten requirements for ultimate beneficial owners, amongst others.

The Monetary Authority of Singapore (MAS) has launched a consultation paper on the controls against market abuse, in order to facilitate investigations into cases of market abuse such as market manipulation and insider trading.

“The absence of information or the delay associated with the retrieval of information, on the identity of persons who are the beneficial owners and/or who exercise control over trading accounts have impeded investigations into market abuse,” MAS commented.

“In the course of our investigations into suspected market abuse, we have uncovered instances of trading accounts being used without written authorisation from the account holders, or used for illicit activities such as insider trading and market manipulation,” it added.

MAS proposes to enhance requirements for financial institutions (FI) in four areas, including ultimate beneficial owners (UBOs) of orders and trades (O&T) executed in omnibus accounts, record-keeping of instructions received for broker-assisted O&T, unique client device identifier for O&T executed via mobile trading applications, and cash payments and payments by third parties (i.e., non-account holders) for the funding of customers’ accounts.

The proposed requirements, which will be set out in a new notice on controls against market abuse, apply to licensed and exempt FIs in Singapore that undertake the regulated activity of dealing in capital markets products. The proposed notice is expected to take effect six months from the date of issuance.