A MAS LFMC licence Singapore for your Singapore-based company should ideally begin with a straightforward description of your business activities.
Let go of the marketing language for a moment and put forth a clear account of what customers can actually DO with your services.
Will your company be involved in payment processing? Client fund holding? Arranging financial transactions, managing investment funds, or operating services related to digital payment tokens? Different activities have different regulatory requirements.
This preparatory phase is surprisingly valuable: you might initially believe a certain type of regulatory license is required for your business, only to find that there are alternative and more appropriate regulatory frameworks for your exact activities.
Create a customer journey chart from registration to successful completion of a transaction. Make notes of the movement of funds, who controls them, and the financial decisions made by the company.
Determine the Right Regulatory Approach
Singapore’s financial sector operates under various regulatory regimes. The Monetary Authority of Singapore (MAS) provides different types of licenses based on the scope of activities to be conducted.
Never rely on the license of another business as a blueprint.
There can be significant differences in operations, even if two businesses appear nearly identical on the surface. One might simply offer software technology, whereas the other may actually be involved in the movement of funds or the management of client money.
Prior to completing and submitting your final license application package, thoroughly research and understand all relevant requirements.
Clarify the corporate structure
Clear corporate information is essential to understand your operation.
Make sure to assemble all relevant shareholders, directors, senior management employees, and affiliated entities in a cohesive manner. If the structure consists of several business entities, precisely explain the operations carried out by each one, and how they interconnect.
Roles must be defined and assigned.
Somebody must take accountability for compliance. The risk management functions have to have an appointed person in charge. Clear approval flows for operational matters are necessary.
The absence of responsible individuals for specific functions will become an issue during a future regulatory assessment and it should be rectified prior to submitting the application.
Integrate Compliance into the Operations
Compliance requirements must be integral to the business, not merely a part of the application process.
Depending on the projected activities of your business, relevant processes might cover aspects of customer due diligence, anti-money laundering, sanctions monitoring, the detection and reporting of illicit financial transactions and monitoring, record keeping standards, the management of client complaints, and the proper escalation procedures for suspicious events.
Consider potential scenarios.
What will happen if an anomaly is detected in a transaction? Who will get the alert? Who will investigate it and what resources/documentations would they have at their disposal? To whom will the anomaly be escalated and when?
A practical compliance framework should answer these basic operational questions directly, thus avoiding employee confusion and improvisation.
Conduct Technical and Cybersecurity Assessments
Technology often forms the backbone of financial service delivery.
Address user permissions, data security, backup procedures, relevant cyber defenses, the operation of the system, what action to take if an incident occurs, and comprehensive contingency and disaster recovery plans.
External service providers also need consideration.
If the operation involves the use of external system hosting or sensitive data storage, make sure to properly document the contractual relationships. Be clear about the contingency actions to take in case of service interruption. Keep careful track of access to sensitive data, and prepare robust procedures for the response to cyber security incidents.
Although an external party may be operating the software, the responsibilities regarding related cyber risks will still lie with the business.
Prepare Credible Financial Forecasts
Business projections must stem from objective projections as opposed to idealistic assumptions.
Budget for expected revenue streams, employee salaries, IT costs, compliance related spending, professional advisory fees, and all other operational overhead expenses. If applicable regulations include requirements for capital amounts and financial resources, these will need to be clearly addressed in your projections.
A trustworthy financial projection should show how the business will be able to fund its ongoing activities once approval has been received.
Final review prior to submission
After submission, MAS may request follow-up documents or clarification on certain aspects of your MAS license application.
Prior to final submission, carefully compare all the submitted documents as a complete package.
Is the described business strategy consistent with the financial forecasts? Do the planned compliance measures address all areas of the intended activities? Is the information concerning ownership transparent and uniform throughout?
The presence of even minor inconsistencies will lead to avoidable delays and frustration.
A coherent and well-structured application will give the MAS regulator a clearer picture of your proposed enterprise. Best of all, through the compilation of the application package, your business will be able to identify its weaknesses and have an opportunity to remedy them prior to any much more costly problem later.