Singapore news: Private banks say increased customer background checks “bitter pill to swallow”

An opinion column in the Jakarta Post says that increased transparency and compliance measures are a “Bitter pill to swallow to keep Singapore’s money clean” and are making attracting wealthy clients to Singapore (FSI rank: 5th) more difficult.

After an overview of the international agreements Singapore has recently signed up to such as the OECD Convention on Mutual Assistance, the column continues:

“Taken together, these moves have certainly strengthened Singapore’s image as a reputable financial centre that spurns dirty money and does not harbour tax criminals or evaders.

But it has not been easy or cheap for industry players to get in line.”

“The new laws call on banks to thoroughly check the background of new clients to ensure their funds are truly clean before allowing them to open an account.

This can be an onerous process if the customer happens to own complex trusts or structures with many layers.”

One banking partner says that “some of her clients have complained of having to wait as long as six months to open a bank account.”

“Banks are taking a long time or refusing to open bank accounts because they see an offshore corporate structure or if the Singapore company is owned by an offshore structure,” she said.

“I’ve seen this movie once before,” quipped Francesco de Ferrari, the head of private banking for Credit Suisse Asia-Pacific.

“I have lived through such a period of regulatory changes in Europe and what I know is in the end, there will be a level playing field because this is a global issue, not just an issue for Singapore.”

“Hong Kong is going through the same (thing), and Switzerland is having similar discussions.”

In other Singapore news, firstpost.com reports that “Singapore has dropped plans to set a daily reference price for gold, four sources with direct knowledge of the matter said, as regulators in Europe investigate suspected manipulation of precious metals prices by banks. The Singapore Bullion Market Association (SBMA), an industry body, has been in discussions for nearly a year on launching a price benchmark in Asian trading hours similar to the twice-daily London fix for spot gold prices, the sources said. But the European probe has made banks reluctant to participate, they added.”

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