CATEGORY: SPEECHES
Mr Nathaniel C V, Chairman, Chartered Secretaries Institute of Singapore
(CSIS)
Mr Gregory Vijayendran S.C., President, Law Society
Mr Henry Tan, Council Member, Institute of Singapore Chartered
Accountants (ISCA)
Distinguished guests
Ladies and gentlemen
I am happy to join you this morning at the 6th annual conference
for Corporate Service Providers (CSPs).
2 This is the second year that the CSP
conference is held virtually. I would like to thank CSIS for organising this conference
to provide a platform for us to come together to discuss how the industry could
navigate the COVID-19 landscape and prepare for the new normal.
Building Business
Resilience through Digitalisation
3 I would like to highlight two key areas
of focus that are essential for the CSP sector to build resilience – firstly,
on digitalisation and secondly, on compliance with the Anti-Money Laundering
and Countering the Financing of Terrorism (AML/CFT) requirements.
4 Digitalisation is no longer an option,
but a necessity for survival and continuity for any business. To
cope with COVID-19 dining-in restriction, many F&B outlets and hawker
stalls have moved on to online delivery platforms and adopted contactless or
e-payment options. To stay in business, some retail outlets have also transitioned
from a purely brick-and-mortar shop to offering online shopping experience. We
applaud these businesses for making the digital leap to take their business
into the future.
5 In
fact, businesses now recognise that converting manual processes to digital is
just the basic step; what is more important is to look at how they can leverage
digitalisation to create new business propositions and stay competitive. Indeed,
as more and more businesses adopt digital platforms in their interactions with
their counterparts or customers, it is important that CSPs consider how they
can value-add in their digital ecosystem to stay relevant.
6 The
government has made digitalisation a key pillar of the public service
transformation efforts. Government digital services will be designed and built
around the needs of citizens and businesses – they will be intuitive, easy to
use and accessible anytime, anywhere, on any device.
7 All
our registration, filing and information services have been online since 2003. In
the coming years, we will go digital-to-the-core, adopt an
anticipatory and predictive mode of operation and make compliance so simple
that there is “no need for service” – which is the best service. We
recently introduced two e-Advisers for “Starting a Business” and for “Business
Structure” on the GoBusiness portal - to provide simple information to new and
aspiring business owners about their business options and statutory obligations
- to help them start on the right footing. We have also piloted ACRA Digital
Assistant (Ada) to manage customers’ enquiries on Unique Entity Number. This is
a virtual intelligent chat assistant that engages users in personalised
conversations to address their enquiries. More enquiries will be handled by Ada in the
new future.
8 Last year, I mentioned that the ACRA-IRAS seamless filing
initiative enables smaller companies to prepare and file statutory returns from
their accounting systems via APIs (Application Programming Interfaces) to ACRA
and IRAS. CSPs and companies used to take 9 hours to manually prepare and file
the statutory returns but now takes just about half an hour to do so, without
the need to log in to BizFile+ and myTax portal. To-date, over
50 companies have filed their statutory returns to ACRA and IRAS through this
mode.
9 More
recently, we collaborated with 1X, Singapore’s first private securities
exchange to enable updating of share ownership information with ACRA directly
from source. This occurs in real-time as shares are traded on the 1X platform.
In the next few years, ACRA will extend the seamless filing solution to more
statutory filings. We envision seamless filing to become the preferred way of
filing in the near future. We will partner more software providers to widen the
range of seamless filing solutions.
10 At the CSIS-ISCA-ACRA outreach sessions in February this
year, we polled about 850 CSPs to find out the digital adoption rate among the
CSPs. About half of the respondents indicated their intent to procure corporate
service digital solutions. Many were keen to digitalise their work processes
though some were unsure which solution to adopt, and were concerned about the
limited resources to implement digital solutions.
11 The
government is providing subsidies for digital solutions such as the IMDA Start
Digital Programme and Productivity Solutions Grants. CSIS has also launched a
new series of technology sessions where they invite tech firms to talk about digital
solutions. I encourage you to attend these sessions and find out how to upskill
yourselves and digitalise your business operations. Later today, there will be
a sharing by a CSP on their experience using a company secretarial software
which is integrated seamlessly with ACRA’s BizFile+.
12 The second area of focus is
the need for CSPs to build resilience against money laundering, terrorism
financing and other illicit activities. As a leading financial centre,
Singapore has an important part to play in addressing global money laundering
and terrorism financial risks. In July last year, we enhanced the transparency
of ownership and control of corporate entities by introducing the requirement
for companies and LLPs to file the information in their Register of Registrable
Controllers (RORC) with the ACRA central register. To-date, more than 270,000
or over 70% entities have lodged their RORC information with ACRA. I strongly
urge you to reach out to your clients if they have yet to comply with the
requirement – before we start enforcement action on those who are the
non-compliant.
13 To further enhance Singapore’s regime on
transparency and beneficial ownership of legal persons, ACRA and MOF have
launched a public consultation early this month, on proposed legislative
amendments to reduce opportunities for the misuse of corporate entities for
illicit purposes. My colleague will be sharing more about the proposed changes later
at the conference.
14 CSPs too, must stay up to
date with AML/CFT measures and implement them correctly, as you play a key role
in facilitating the setting up of business in Singapore, with some of you acting
as locally resident directors or nominees. To help CSPs understand the AML/CFT
risks and obligations, we partnered CSIS and ISCA to introduce the mandatory
training programme in 2018. I am pleased to let you know
that to-date, the passing rate of the AML/CFT proficiency test has been high,
at 96%. The proficiency test is a pre-requisite to be registered or renewed as
Registered Filing Agents (RFAs).
15 However, I urge you not to let your guards
down, and to remain mindful of the growing complexity of such risks. The
Financial Action Task Force has reported recently new money laundering and
terrorist financing threats and vulnerabilities arising from COVID-19 crisis. It
is important that you stay vigilant to new and emerging risks, and to continue
to ensure the robustness of your AML/CFT controls.
16 In our compliance
review on RFAs conducted between 2020 to 2021, we have observed a fall in
compliance rate mainly due to the COVID-19 situation, which had posed
challenges to CSPs’ ability to conduct due diligence checks. Some CSPs have
not been able to conduct the required checks due to difficulties in holding
in-person meetings. We also observed that some CSPs were unable to continue their
daily operations on virtual platforms as they have yet to adopt digital tools
and processes. This observation highlights the importance for CSPs to go
digital so as not to hamper your effectiveness and competitiveness. I urge CSPs
to leverage technology to transform your business processes and operations to
improve productivity and reduce costs. Besides improving work efficiency, this
will also create better customer experience and bring greater value to your
clients.
17 We have also found
that some CSPs continued to fall short of their AML/CFT responsibilities. ACRA
takes a serious view of any breaches in AML/CFT obligations, and we will not
hesitate to take strong enforcement actions against those who refuse to comply
or intentionally flout the laws. Between November 2020 and June 2021, we conducted
14 inspections on RFAs arising from Compliance Review findings, and imposed
financial penalties ranging from $4,000 to $14,000 on 6 CSPs, for failing to
conduct proper due diligence checks on their clients. Depending on the severity
of the non-compliance, an RFA may face restricted access to BizFile+,
financial penalty or have their registration cancelled.
Strengthening
Accountancy Sector
18 I would like to take a moment to update you
on a recent development at ACRA. Some of you may be aware of the recent
Ministry of Finance (MOF) announcement on the merger of the accountancy-related
units in ACRA, the Singapore Accountancy Commission (SAC) and the Accounting
Standards Council (ASC) Secretariat. The merger serves to strengthen
effectiveness of regulation, standards-setting, and sector development by
harnessing synergies across complementary functions related to accountancy. The
merger would happen in the second half of next year. The details of the
implementation are being worked on and further updates will be shared in due
course.
Conclusion
19 I
would like to conclude by thanking CSIS for your partnership and support over
the years. Your regular feedback has helped ACRA to ensure that our regulatory
regime remains robust and relevant for CSPs and businesses. I am happy that CSIS has developed the new
competency framework to raise the professional standards for CSPs. I encourage
CSPs to use the framework to identify existing gaps, reskill and upskill, so
that you can remain
relevant and continue to thrive in the changing business environment.
20 On this note, I wish you all an enjoyable
and fruitful conference.
Thank you.
2021/07/30