Singapore Plans Digital Platform to Combat Illicit Flows

(Bloomberg) -- Singapore’s financial regulator is working with major banks to create a digital platform that allows the sharing of information on customers and transactions to prevent money laundering and terrorism financing.

The Monetary Authority of Singapore will start the new service, known as Cosmic, in the first half of 2023, it said Friday in a statement. While the initial rollout will involve the city-state’s six largest commercial lenders, there’s a plan to extend coverage and make some aspects of sharing mandatory at a later date, MAS said.

Singapore is among global financial centers battling illicit fund flows that often come in via shell companies as well as export-import transactions. The island has had its fair share of high-profile cases in the past decade, most notably the international scandal of 1Malaysia Development Bhd, or 1MDB. 

“Cosmic will significantly enhance our financial institutions’ ability to detect and curb suspicious activity, while minimising the impact on legitimate actors,” MAS Assistant Managing Director Loo Siew Yee said in the statement.

The platform, which MAS said will be the world’s first centralized one, will enable banks to securely share information on clients and transactions when they cross “material risk thresholds.” The regulator will operate it, and will also provide in legislation that this information sharing by the banks is permitted only for combating money laundering and other criminal activities. 

It will have strong security features to prevent unauthorized access to information, MAS said. 

The six bank participants are: DBS Group Holdings Ltd., Oversea-Chinese Banking Corp., United Overseas Bank Ltd., and local units of HSBC Holdings Plc, Citigroup Inc., and Standard Chartered Plc.

MAS is seeking feedback on the proposed legislative framework for Cosmic, it said. Cosmic is an acronym for “collaborative sharing of money-laundering and terrorism financing information and cases.” Interested parties can submit their comments on the proposals and legislative amendments to the regulator by Nov. 1, it said.

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