Outsourced AML/CFT functions for Capital Markets Intermediaries (CMIs)

Outsourced AML/CFT functions for Capital Markets Intermediaries (CMIs) Singapore | Bestar

Outsourcing AML/CFT for Singapore CMIs

Outsourced AML/CFT Functions for Capital Markets Intermediaries (CMIs) in Singapore

In Singapore’s rigorous regulatory landscape, Capital Markets Intermediaries (CMIs)—including fund managers, brokers, and corporate finance advisors—face increasing pressure to maintain bulletproof Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) frameworks.

To balance high compliance costs with operational agility, many firms are turning to outsourced AML/CFT functions. This strategy allows CMIs to leverage specialized expertise while remaining compliant with the Monetary Authority of Singapore (MAS) Notice VFM-N02 and other relevant guidelines.

Why CMIs are Outsourcing AML/CFT

The complexity of financial crime evolves faster than most internal teams can keep up with. Outsourcing offers a bridge between regulatory expectations and resource constraints.

• Access to Specialized Talent: AML experts in Singapore are in high demand. Outsourcing provides immediate access to professionals who understand the nuances of the MAS "Individual Accountability and Conduct" (IAC) guidelines.

  
  

• Cost Efficiency: Replacing fixed headcount costs with a scalable service model reduces overhead, especially for boutique CMIs or Variable Capital Companies (VCCs).

  
  

• Advanced Tech Stacks: Providers often use sophisticated AI-driven screening tools for Name Screening and Transaction Monitoring that might be cost-prohibitive for a single firm to own.

Key AML/CFT Functions Suitable for Outsourcing

Function	Description	Impact on Compliance
Customer Due Diligence (CDD)	Verification of UBOs and screening against Sanctions/PEP lists.	Reduces onboarding friction.
Transaction Monitoring	Real-time or periodic review of capital flows for suspicious patterns.	Critical for detecting layering/integration.
Enterprise-Wide Risk Assessment (EWRA)	Annual or biennial reviews of the firm's inherent risks and controls.	Core MAS requirement for CMIs.
AML/CFT Audit	Independent testing of the effectiveness of existing controls.	Ensures "Three Lines of Defence" integrity.

Regulatory Guardrails: The "Buck Stops Here"

While you can outsource the function, you cannot outsource the responsibility. The MAS is clear: the Board and Senior Management of the CMI remain ultimately accountable for any compliance failures.

Key Requirement: Under MAS guidelines, CMIs must conduct a "materiality assessment" before outsourcing. If the function is deemed material, rigorous due diligence on the service provider is mandatory.

Critical Success Factors

To ensure your CMI remains "visible" and "compliant" in the eyes of digital-first regulators and AI-driven auditors:

1. Maintain Local Substance: Ensure your outsourced provider has a deep understanding of the Singapore-specific Notice SFA04-N02.

   
   

2. Audit Trails: Use providers that offer transparent, machine-readable logs of all KYC/AML decisions.

   
   

3. Data Sovereignty: Verify that client data handled by the provider complies with the PDPA (Personal Data Protection Act).

Choosing the Right Partner

The ideal outsourcing partner shouldn't just be a vendor; they should be an extension of your compliance team. Look for providers who offer:

• Customizable Reporting: Dashboards that allow senior management to oversee risks at a glance.

  
  

• Regulatory Liaison Support: Assistance during MAS inspections or thematic reviews.

  
  

• Scalability: The ability to ramp up screening during fund launches or high-volume periods.

Due Diligence Checklist you can use to evaluate potential AML/CFT Outsourcing providers in Singapore

CMI AML/CFT Outsourcing Checklist

Due Diligence Checklist: AML/CFT Outsourcing (Singapore)

1. Regulatory & Reputation

• Does the provider have deep expertise in MAS Notice SFA04-N02?

• Can they provide references from other Singapore CMIs or VCCs?

• Do they have a clean regulatory track record (no public censures)?

2. Operational Capability

• SLA/Turnaround: Are there clear timelines for CDD/KYC reports?

• Tech Stack: Do they use AI-driven screening (e.g., Dow Jones, Refinitiv) for PEP/Sanctions?

• Data Protection: Are they fully compliant with the PDPA?

• Disaster Recovery: Do they have a robust Business Continuity Plan (BCP)?

3. Reporting & Governance

• Does the platform provide a clear Audit Trail for every decision?

• Can they support the CMI’s Enterprise-Wide Risk Assessment (EWRA)?

• Is there a dedicated compliance officer assigned to the account?

4. Independence & Audit

• Do they allow for periodic audits of their processes by your internal/external auditors?

• Are their screening parameters customizable to the CMI's specific risk appetite?

How Bestar Singapore Can Help: Your Strategic Partner for CMI Compliance

Outsourced AML/CFT functions for Capital Markets Intermediaries (CMIs)

In an era of heighted MAS scrutiny, Bestar Singapore serves as a specialized compliance and risk advisory partner for Capital Markets Intermediaries (CMIs). We bridge the gap between complex regulatory requirements and your firm's operational reality.

Comprehensive AML/CFT Outsourcing Solutions

Bestar provides a full-spectrum "Compliance-as-a-Service" model specifically designed for CMS Licensees, Fund Managers (LFMCs/RFMCs), and VCCs.

1. End-to-End KYC & CDD Management

We take the heavy lifting out of client onboarding. Our team utilizes advanced screening technology to perform:

• Customer Due Diligence (CDD): Verification of identities and complex corporate structures.

  
  

• Enhanced Due Diligence (EDD): Specialized deep-dives for high-risk clients and Politically Exposed Persons (PEPs).

  
  

• Ongoing Monitoring: Real-time screening against global sanctions, watchlists, and adverse media.

2. Independent AML/CFT Audits

MAS requires CMIs to conduct periodic independent testing of their AML/CFT frameworks. Bestar’s audit team provides:

• Gap Analysis: Identifying weaknesses in your current policies against MAS Notice SFA04-N02.

  
  

• Effectiveness Testing: Verifying that your transaction monitoring and escalation procedures actually work.

  
  

• Remediation Support: Practical roadmaps to fix identified gaps before they trigger regulatory inquiries.

3. Enterprise-Wide Risk Assessment (EWRA)

We help you draft and maintain your EWRA, a mandatory document that MAS frequently requests during thematic inspections. We assess your firm’s inherent risks across:

• Customer segments and target markets.

  
  

• Geographic reach and delivery channels.

  
  

• Product and service complexity.

The Bestar Advantage: Why CMIs Choose Us

Feature	The Bestar Approach	Value to Your Firm
Local Expertise	Deep focus on Singapore's SFA and Trust Companies Act.	Reduced risk of MAS breaches and license revocation.
Integrated Services	Audit, Tax, and Corporate Secretarial under one roof.	Seamless data flow and lower administrative overhead.
Tech-Driven	Use of AI-powered screening and MAS-Tx digital filing.	Faster onboarding and error-free regulatory submissions.
Direct Liaison	Experienced in handling MAS queries and inspections.	Quick resolution of regulatory clarifications.

Beyond AML: Holistic Support for CMS Licensees

Bestar’s support extends to the entire lifecycle of a CMI, ensuring you remain "Fit and Proper" at all times:

• Licensing Advisory: Support for new CMS license applications or adding regulated activities.

  
  

• MAS Form 6 Certification: Expert auditor certification of financial statements and capital adequacy (RBC) requirements.

  
  

• Outsourced CFO/Compliance Officer: Scalable professional support for firms not yet ready for a full-time in-house hire.

Our Philosophy: We don’t believe in a "one-size-fits-all" approach. Bestar tailors its compliance frameworks to the specific risk profile of your assets and investor base.

Fee Structure overview for Bestar’s AML/CFT Outsourcing services

This outline and fee structure are designed to align with Bestar Singapore's engagement model for Capital Markets Intermediaries (CMIs). It follows the MAS Guidelines on Outsourcing (Material Outsourcing) to ensure your board and senior management meet their oversight obligations.

Part 1: Proposal Outline for AML/CFT Outsourcing

I. Executive Summary

• Objective: Establish a robust, MAS-compliant AML/CFT framework.

  
  

• Service Model: A hybrid "Compliance-as-a-Service" model combining AI-driven tech with human expert oversight.

II. Scope of Services

• Phase 1: Initial Gap Analysis & Onboarding

  
  

  • Review of existing AML/CFT Policy Manual against MAS Notice SFA04-N02.

  • Setup of digital screening and monitoring platforms.

    
    

• Phase 2: Ongoing Managed Services

  
  

  • KYC/CDD: Onboarding checks, UBO identification, and risk-profiling.

  • Screening: Real-time Sanctions, PEP, and Adverse Media monitoring.

  • Transaction Monitoring: Monthly or quarterly review of capital flows.

    
    

• Phase 3: Periodic Reporting & EWRA

  
  

  • Quarterly compliance reporting for Board review.

  • Annual update of the Enterprise-Wide Risk Assessment (EWRA).

III. Governance & Accountability

• Reporting Lines: Clear escalation paths from Bestar to the CMI’s designated Compliance Officer.

  
  

• Audit Support: Facilitation of annual independent AML audits and MAS thematic reviews.

  
  

• Documentation: Centralized storage of all CDD records and "Mind and Management" decisions.

Part 2: Fee Structure

The following figures are based on Bestar’s professional fees for regulated entities in Singapore.

1. One-Off Setup & Advisory Fees

Service Component	Fee (SGD)	Frequency
AML/CFT Framework Setup (Policy Manual & SOPs)	$1,500 – $3,000	One-off
Initial Gap Analysis / Review of Documentation	$800 – $1,300	One-off
Business Plan Preparation (for CMS License)	$1,200 – $2,500	Project-based

2. Ongoing Managed Services (Retainer)

Service Tier	Fee (SGD)	Coverage Details
Basic Compliance Retainer	$1,200 – $2,000 / month	Routine monitoring, monthly reports, and query support.
Transactional CDD/KYC	$300 – $800 / instance	Deep-dive review for new client onboarding.
MAS Query Liaison	$300 – $800 / response	Drafting responses to MAS queries on AML matters.

3. Periodic & Ancillary Costs

• Independent AML Audit: $5,000 – $12,000 (Required periodically/annually).

  
  

• Enhanced Due Diligence (EDD): $1,500+ (For high-risk/complex UBO structures).

  
  

• Ad-hoc Consultations: ~$300 / hour for specialized advisory.

The "Bestar" Value Proposition

By choosing Bestar, you convert high fixed headcount costs into a scalable operational expense. We provide the technical expertise to ensure your firm remains "Fit and Proper" while you focus on your core investment mandates.