MAS revokes licence of Apical Asset Management due to serious breaches of law

The regulator also reprimanded the firm's CEO and director Yeh Yin Yee and Bernard Cheok Yin.

The Monetary Authority of Singapore (MAS) revoked the capital markets services (CMS) licence of Apical Asset Management (AAMPL) after finding serious breaches of MAS’ Anti-Money Laundering/ Contering Financing of Terrorism (AML/CFT) requirements, the regulator said in a press release.

The regulator also reprimanded AAMPL’s CEO and director Yeh Yin Yee and director Bernard Cheok Yin for their failure to ensure that the company complies with all laws and rules.

These two were the only directors on AAMPL’s board and were principally responsible for the management and conduct of the firm’s affairs.

“AAMPL’s lack of basic AML/CFT controls despite the heightened ML/TF risks posed by its clients’ use of complex investment structures was an unacceptable failing warranting licence revocation,” said Loo Siew Yee, Assistant Managing Director (Policy, Payments and Financial Crime), MAS.

MAS’ inspection uncovered severe deficiencies in the firm’s AML/CFT controls from 2013 to 2018. AAMPL did not have basic AML/CFT policies and procedures in place, which exposed the firm to the risk of receiving or laundering the proceeds of a crime.

This risk was further heightened due to complex ownership structures, comprising multiple layers and investment entities, used by some of the firm’s customers.

In particular, AAMPL committed serious breach of the law for not conducting any enterprise-wide ML/TF risk assessment (EWRA).

According to MAS guidelines, financial institutions are expected to perform the EWRA at least once every two years, or when there are material trigger events, such as the acquisition of new customer segments, or introduction of new products and services.

AAMPL also failed to properly assess its customers to determine whether they presented higher ML/TF risks.

Further, MAS found the firm’s ongoing monitoring controls and procedures to deficient. This resulted in its failure to conduct enhanced monitoring of a fund related to a politically exposed person for a significant length of time, said MAS.

Another breach is AAMPL’s failure to subject its AML/CFT controls to independent audits in order to assess their effectiveness.

“MAS will not hesitate to take appropriate action against FIs whose policies and controls clearly fail to address the ML/TF risks in their business activities. Board and senior management who fall short in their duties will also be taken to task,” said MAS’ Loo.