Cross-border audit and certification deadlines fast approaching

MAS updates cross-border approach for FRCs

Licensed and exempt entities that have cross-border arrangements with their foreign related corporations or foreign offices under the exemption for the CBA framework are now required to notify the MAS. And for those with a financial year end this month, time is quickly running out to submit your declaration.

These entities are also required to conduct an independent audit of all their cross border arrangements – or CBAs – and submit an annual declaration under Form FR to the MAS declaring that all relevant regulations have been satisfied. As part of this annual declaration, firms need to be audited and certified by an independent assurance function (or service provider).

Common errors

The exemption framework has been ‘live’ since October 2021, with 2023 being the first year where firms have submitted their annual declarations to the MAS (for their CBAs in 2021/2022). This means that, if your firm’s financial year end is December, you are required to submit the declaration to MAS by May 2024.

This year, we supported several firms with their CBA Audit and Certification declarations. Generally, firms should be putting more comprehensive policies and procedures in place for their CBAs. Based on our experience, we noted that the description of the activities performed by fund managers’ foreign representatives could be strengthened, as well as weaknesses in their foreign representative registers. For brokers, we noted that certain outsourcing arrangements were incorrectly deemed as CBAs.

How we can help

We can provide you with the independent CBA audit and the certification that the MAS requires. As part of our audit, we review your policies, procedures and controls, including controls related to record keeping, and anti-money laundering and countering the financing of terrorism. At the end of the audit, you will receive a written report detailing the gaps we have found and our recommended remedial action, so you know exactly what to prioritise. We also issue the certification for you, which is addressed to the MAS officer-in-charge.

Please get in touch if you need assistance.