Contemporary Wealth Management and Private Banking — a part of the book Singapore as an International Financial Centre by Dr Alexander Ressos.
Part E examines wealth management in Singapore today: its regulatory architecture, the end of banking secrecy for foreign tax purposes, family offices, structuring vehicles and the integrity shocks that tested the centre.
This part belongs to Singapore as an International Financial Centre by Dr Alexander Ressos, published here in full, section by section.
The Regulatory Architecture: MAS, the Banking Act, the SFA, the FAA and the FSMA
A financial centre that manages wealth for clients from many countries sells, among other things, the quality of its supervision. Read more Singapore · Wealth ManagementThe Monetary Authority of Singapore as integrated regulator
After Parliament had passed the Monetary Authority of Singapore Act in 1970, MAS was formed on 1 January 1971. Read more Singapore · Wealth ManagementThe Banking Act and private banking
The Banking Act has a longer history than its date suggests. A banking bill was first introduced in Parliament in 1962, although questions surrounding a new currency delayed the legislation. Read more Singapore · Wealth ManagementThe Securities and Futures Act and capital markets services
Before 2002, Singapore’s capital markets were governed by several statutes, including the Securities Industry Act and the Futures Trading Act. Read more Singapore · Wealth ManagementThe Financial Advisers Act
The Financial Advisers Act came into force together with the SFA on 1 October 2002. Read more Singapore · Wealth ManagementThe Financial Services and Markets Act 2022
By the early 2020s, MAS’s powers were scattered across many statutes. Read more Singapore · Wealth ManagementIndividual accountability and conduct
On 10 September 2020 MAS issued Guidelines on Individual Accountability and Conduct. They set five outcomes that financial institutions are expected to achieve. Read more Singapore · Wealth ManagementThe Regulatory Architecture: MAS, the Banking Act, the SFA, the FAA and the FSMA: practical consequences
For a foreign group that wants to serve wealthy clients from Singapore, the architecture described in this chapter translates into a series of concrete decisions. The first concerns the vehicle. Read more Singapore · Wealth ManagementThe Regulatory Architecture: MAS, the Banking Act, the SFA, the FAA and the FSMA: Comparison with Geneva and Hong Kong
The Swiss framework described in the Geneva volume rests on the Banking Act, the Financial Institutions Act, the Financial Services Act, the Collective Investment Schemes Act, the Financial Market… Read more Singapore · Wealth ManagementThe Regulatory Architecture: MAS, the Banking Act, the SFA, the FAA and the FSMA: summary
The Monetary Authority of Singapore, founded on 1 January 1971, gradually took over the supervision of insurance, securities and currency issue and now acts as both central bank and integrated… Read more Singapore · Wealth ManagementThe End of Banking Secrecy for Foreign Tax Purposes
For most of its modern history, Singapore offered foreign clients a banking confidentiality that foreign tax authorities could not penetrate. Read more Singapore · Wealth ManagementThe OECD standard of 2009 and Singapore's commitment
Banking confidentiality in Singapore rests on statute. Read more Singapore · Wealth ManagementFATCA and the intergovernmental agreement
The decisive external impulse came from the United States. Read more Singapore · Wealth ManagementThe Common Reporting Standard
FATCA served as the template for a multilateral system. In 2013 the G20 asked the OECD to develop a single global standard for automatic exchange. Read more Singapore · Wealth ManagementTax crimes as predicate offences for money laundering
Exchange of tax information concerns the relationship between states. The designation of tax crimes as predicate offences for money laundering concerns the conduct of the banks themselves. Read more Singapore · Wealth ManagementLegacy assets and the regularisation of clients
Every financial centre that abandoned tax secrecy faced the problem of its existing book of clients. Accounts opened under the old rules contained assets that clients had never declared at home. Read more Singapore · Wealth ManagementThe End of Banking Secrecy for Foreign Tax Purposes: practical consequences
The cumulative effect of these rules is that a Singapore financial institution must be able to show, for every client, that it understands the client’s tax residence and has no reason to suspect… Read more Singapore · Wealth ManagementThe End of Banking Secrecy for Foreign Tax Purposes: Comparison with Geneva
Switzerland and Singapore crossed the same threshold within days of each other. Read more Singapore · Wealth ManagementThe End of Banking Secrecy for Foreign Tax Purposes: summary
Singapore’s statutory banking confidentiality under section 47 of the Banking Act lost its effect against foreign tax authorities between 2009 and 2018, although it continues to protect customers… Read more Singapore · Wealth ManagementFamily Offices: Sections 13O and 13U and the Single Family Office
At the end of 2020, about 400 single family offices in Singapore held a tax incentive granted by the Monetary Authority of Singapore. Read more Singapore · Wealth ManagementThe rise of the single family office
MAS describes a single family office as an entity that manages wealth for, or on behalf of, one family and is wholly owned or controlled by members of that family. Read more Singapore · Wealth ManagementThe tax incentive schemes and their conditions
Singapore’s tax incentives for funds form a family of four schemes under the Income Tax Act 1947. Read more Singapore · Wealth ManagementLicensing exemptions and supervisory expectations
Fund management is a regulated activity under the Securities and Futures Act 2001, for which a capital markets services licence is normally required. Read more Singapore · Wealth ManagementSubstance, local spending and investment requirements
The headcount condition is the clearest expression of the demand for substance. Read more Singapore · Wealth ManagementScrutiny after 2023
On 15 August 2023 the police arrested ten foreign nationals in coordinated raids. The assets eventually seized, frozen or subject to prohibition of disposal orders amounted to about S$3 billion. Read more Singapore · Wealth ManagementPractical consequences for families and their advisers
The choice between section 13O, section 13OA and section 13U follows from the size of the assets and the existing structure. Read more Singapore · Wealth ManagementFamily Offices: Sections 13O and 13U and the Single Family Office: Comparison with Geneva and Hong Kong
The Geneva volume described a city where family offices grew out of the private banking tradition, without any special tax regime. Read more Singapore · Wealth ManagementFamily Offices: Sections 13O and 13U and the Single Family Office: summary
Single family offices with Singapore tax incentives multiplied from about 400 at the end of 2020 to more than 2,000 at the end of 2024, drawn by stability, the common law, a deep private banking… Read more Singapore · Wealth ManagementTrusts, Holding Structures and the Variable Capital Company
A financial centre that serves families and investors needs more than banks and asset managers. Read more Singapore · Wealth ManagementTrust law in Singapore
The trust reached Singapore with English law. Read more Singapore · Wealth ManagementLicensed trust companies
The Trust Companies Act 2005 governs the licensing and regulation of trust companies in Singapore. Read more Singapore · Wealth ManagementPrivate trust companies
A private trust company (PTC) is a company formed to act as trustee for the trusts of one family. Read more Singapore · Wealth ManagementThe Variable Capital Company
By 2017 Singapore had become one of the leading centres for the management of funds in Asia, yet its asset managers domiciled many of their funds elsewhere. Read more Singapore · Wealth ManagementHolding companies, treaties and substance
The private company limited by shares remains the most common structuring vehicle in Singapore. Read more Singapore · Wealth ManagementTrusts, Holding Structures and the Variable Capital Company: practical consequences
The choice of vehicle follows from the purpose of the structure. Read more Singapore · Wealth ManagementComparison with Geneva, Hong Kong and Jersey
Geneva and Singapore both administer trusts for international families, although their legal positions differ fundamentally. Read more Singapore · Wealth ManagementTrusts, Holding Structures and the Variable Capital Company: summary
Singapore offers wealthy families and investors a complete set of structuring vehicles under its own law: the trust, the licensed and the private trust company, the Variable Capital Company and the… Read more Singapore · Wealth ManagementFund Management, External Asset Managers and Licensing
A wealthy family that moves its assets to Singapore rarely deals with a single institution. Read more Singapore · Wealth ManagementLicensing of fund management companies
For most of the period after the Securities and Futures Act 2001 came into force, a large part of Singapore’s fund management industry operated without a licence. Read more Singapore · Wealth ManagementAccredited and institutional investors
The distinction between retail and A/I managers rests on the classes of investors defined in section 4A of the Securities and Futures Act. Read more Singapore · Wealth ManagementExternal asset managers and custodian banks
An external asset manager, often called an independent asset manager, manages the portfolios of private clients without holding their assets. Read more Singapore · Wealth ManagementCompliance functions and the external compliance officer
MAS expects every manager to have compliance arrangements that match the nature, scale and complexity of its business. Read more Singapore · Wealth ManagementFund Management, External Asset Managers and Licensing: practical consequences
A client who entrusts assets to a Singapore manager should first establish its regulatory status. Read more Singapore · Wealth ManagementComparison with the Swiss regime for portfolio managers
Switzerland brought its independent asset managers under prudential supervision only with the Financial Institutions Act of 15 June 2018, which entered into force on 1 January 2020 together with the… Read more Singapore · Wealth ManagementFund Management, External Asset Managers and Licensing: summary
Every company that carries on business in fund management in Singapore needs a capital markets services licence under the Securities and Futures Act, and since the repeal of the registered regime on… Read more Singapore · Wealth ManagementIntegrity Shocks: 1MDB and the 2023 Money Laundering Case
A financial centre lives on the trust of people who will never inspect it. Read more Singapore · Wealth Management1MDB and the Singapore banks
1Malaysia Development Berhad was created in 2009, the first year of Najib Razak as Prime Minister of Malaysia, as a state investment fund intended to promote the economic development of the country. Read more Singapore · Wealth ManagementSupervisory action by the Monetary Authority of Singapore
On 24 May 2016 MAS announced that it was withdrawing the status of BSI Bank Limited as a merchant bank in Singapore. Read more Singapore · Wealth ManagementThe 2023 money laundering case
The case of 2023 had a long prehistory. Read more Singapore · Wealth ManagementLessons for onboarding and source-of-wealth checks
The common thread of both cases is that the warning signs were visible. Read more Singapore · Wealth ManagementReputation as a regulatory objective
Singapore treats the reputation of its financial centre as a public asset, comparable to its currency or its port. Read more Singapore · Wealth ManagementIntegrity Shocks: 1MDB and the 2023 Money Laundering Case: Comparison with Geneva
The 1MDB case links the two centres directly. Read more Singapore · Wealth ManagementIntegrity Shocks: 1MDB and the 2023 Money Laundering Case: summary
The diversion of more than 4.5 billion US dollars from the Malaysian fund 1MDB used private banks in Singapore, whose relationship managers moved large sums for Jho Low and his associates despite… Read more