Consultation Paper - AML/ATF Sectoral Guidance Notes for Money Service Business

Summary

This is a BMA consultation paper setting out draft Sector-Specific Guidance Notes (Annex VII) for Money Service Business (MSB), intended to supplement the BMA's 2021 general AML/ATF Guidance Notes for Regulated Financial Institutions (RFIs). It explains how existing AML/ATF obligations under the POCA, POCA SEA, ATFA, POCR and the MSB Act 2016 apply specifically to persons conducting money service business, rather than creating new statutory duties itself.

• Scope: Applies to persons carrying on money service business as defined in Section 2(2) of the MSB Act: money transmission services, cheque cashing/guaranteeing, issuing/selling/redeeming drafts, money orders or traveller's cheques for cash, payment service business, and bureau de change activities.
• Licensing and registration: MSB providers must obtain a licence from the BMA under Section 8 of the MSB Act, unless exempt (e.g. already licensed as a bank) or otherwise required to register with the BMA as a non-licensed RFI under Section 9 of POCA SEA.
• Governance and controls: Senior management must ensure compliance with AML/ATF acts and regulations, approve AML/ATF policies and procedures, appoint a qualified compliance officer and a reporting officer, screen employees and agents to high standards, ensure adequate resources and training, and independently test controls for effectiveness.
• Customer due diligence and risk assessment: Guidance covers the risk-based approach, standard and simplified identification requirements, enhanced due diligence for higher-risk MSB scenarios, source of funds/wealth checks, and handling of cash and bearer instrument transactions.
• Agents and third parties: RFIs must communicate AML/ATF policies to overseas agents, branches and group entities and ensure equivalent AML/ATF measures are applied; specific risk factors for agent networks and third-party reliance/outsourcing are set out.
• Monitoring and reporting: Guidance addresses ongoing transaction monitoring, suspicious activity reporting obligations, offences for failure to report and tipping-off, employee/agent training, and record-keeping requirements.
• Penalties: Notes that breach of specified AML/ATF regulations is a criminal offence carrying fines up to $50,000 on summary conviction or up to $750,000 and/or two years' imprisonment on indictment, and that the BMA may impose civil penalties of up to $10,000,000.

As a consultation paper, the document is a draft for industry comment rather than confirmed final guidance; readers should check the BMA source page for the current status and any comment deadline before relying on specific provisions.

Key obligations

• MSB providers must obtain a licence from the BMA under Section 8 of the MSB Act, or register with the BMA as a non-licensed RFI under Section 9 of POCA SEA if not licensed or registered with another competent authority
• RFIs conducting MSB must include AML/ATF policies and procedures with their MSB licence application under Section 10(2)(c) of the MSB Act
• Senior management must appoint a qualified, managerial-level compliance officer and a reporting officer to process disclosures
• Senior management must identify, assess and document ML/TF risks and ensure AML/ATF risk assessments remain current and appropriate
• RFIs must screen owners, directors, managers, employees and agents against high standards per POCR Regulation 18(1)(c)
• RFIs with overseas agents, branches, subsidiaries or group members must communicate AML/ATF policies to them and ensure equivalent AML/ATF measures are applied
• RFIs must maintain detailed AML/ATF policies, procedures and controls and independently test them for effectiveness
• RFIs must comply with suspicious activity reporting obligations and avoid tipping-off, with failure to report constituting an offence
• RFIs must maintain records in accordance with the record-keeping requirements described in the guidance

Applies to

Money service businesses (MSB), AML/ATF Regulated Financial Institutions (RFIs) providing money transmission services, cheque cashing, drafts/money orders/traveller's cheques issuance, payment service business, or bureau de change services