The Monetary Authority of Singapore (MAS) on Monday launched COSMIC (Collaborative Sharing of Money Laundering/Terrorism Financing (ML/TF) Information & Cases), the first centralised digital platform to facilitate sharing of customer information among financial institutions (FIs) to combat money laundering (ML), terrorism financing (TF) and proliferation financing (PF) globally, an official news release stated.
The Financial Services and Markets (Amendment) Act 2023 and accompanying subsidiary legislation, which set out the legal basis and safeguards for such sharing, commenced on the same day.
Following public consultation in October 2021, the Financial Services and Markets Act 2022 (FSMA) was amended in May 2023 to set out the legislative framework for COSMIC.
"COSMIC will enable FIs to warn each other of suspicious activities and make more informed risk assessments on a timely basis. It complements the industry’s existing close collaboration with MAS and law enforcement authorities to combat financial crime. This will strengthen Singapore’s capabilities to uphold our reputation as a well-regulated and trusted financial centre."
– Loo Siew Yee, Assistant Managing Director (Policy, Payments & Financial Crime), MAS.
A COSMIC participant FI may share customer information with another participant FI only if the customer’s profile or behaviour displays certain objectively-defined indicators of suspicion, or “red flags”.
The FSMA requires participant FIs to have in place policies and operational safeguards to protect the confidentiality of information shared. This will allow participant FIs to share information on potential criminal behaviour while safeguarding the interests of the vast majority of customers who are legitimate. Customers are encouraged to continue to provide timely responses if requested by FIs to provide clarifications on their risk profiles or transactions, so that FIs can make informed risk assessments.
OSMIC was co-developed by MAS and six major commercial banks in Singapore – DBS, OCBC, UOB, Citibank, HSBC and Standard Chartered Bank. These banks will be the participant FIs on COSMIC during its initial phase.
Information sharing is currently voluntary and focused on three key financial crime risks in commercial banking, namely: (a) misuse of legal persons; (b) misuse of trade finance for illicit purposes; and (c) proliferation financing.
(The article is published under a mutual content partnership arrangement between The Free Press Journal and Connected To India)
