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U.S. Treasury prepares for implementation of Corporate Transparency Act
Napier
April 9, 2021

U.S. Treasury’s Financial Crimes Enforcement Network outlines new Act obliging entities to disclose identities of individual players.

Central Bank of UAE’s new rules will improve small to medium-sized enterprises (SMEs) access to financial products and services.

Singapore once again warns public about trading cryptocurrencies while Bitcoin goes on tear.

Find out more on these stories below.  

The U.S. Financial Crimes Enforcement Network seeks public comment on act targeting financial crime

The Financial Crimes Enforcement Network (FinCEN) has sought public input regarding the beneficial ownership reporting requirements of the Corporate Transparency Act (CTA) through last week’s Advance Notice of Public Rulemaking (ANPR).

The CTA targets money laundering and terrorist financing by requiring financial entities to disclose the identities of their beneficial owners- the actual individuals whose interests are served. FinCen noted that the concealment of these identities “facilitates crime, threatens national security, and jeopardizes the integrity of the financial system”.

The Act is a response to the global uproar caused by last year’s publication of the FinCen files by the International Consortium of Investigative Journalists (ICIJ), Buzzfeed News and other outlets, which exposed how financial institutions are involved in widespread money-laundering.

The ANPR invites the public to participate in the rule-making process with a questionnaire format. Submissions can be made up to and including May 5, 2021.

Read more on this story from OCCRP.

The Central Bank of UAE (CBUAE) has released new regulations for financial institutions which will support the SME sector

The CBUAE’s rules follow the implementation of its new regulatory framework for financial consumer protection. The bank’s governor, Abdulhamid M. Saeed Alahmadi, said that the “CBUAE aims to ensure that SMEs enjoy the highest business standard when interacting with licensed financial institutions, in line with our new consumer protection mandate.”

The new regulations pertain to how financial products and services are developed, marketed and sold, with a focus on responsible banking practices and risk disclosure, as well as timeous access to information.

Cited amongst the new best practices for licensed institutions are that SMEs should be able to open a bank account within three working days- subject to financial crime compliance checks- since they present a low risk of financial crime. Additionally, the regulation requires the establishment of an impartial and transparent complaints mechanism for SMEs to utilise.

Governor Alahmadi added that: “SMEs play a vital role in the UAE's economy. The UAE government has placed considerable emphasis on developing the SME ecosystem.”

Read more on this story from International Investment.

Monetary Authority of Singapore (MAS) once again cautions the public about trading “highly volatile” cryptocurrencies in the face of Bitcoin’s rapid growth

The chairman of the MAS, Mr Tharman Shanmugaratnam, was responding to a parliamentary question earlier this week about the size, trends and regulation of the crypto asset market in Singapore when he reiterated the caution to the public. “Cryptocurrencies can be highly volatile, as their value is typically not related to any economic fundamentals”, he said.

While cryptocurrencies trading is relatively small compared to more traditional stocks and bonds, their total market value recently topped $2 trillion for the first time, having doubled in just two months. Globally, enthusiasm for Bitcoin has soared amongst investors recently. Just last month, Tesla CEO Elon Musk announced via tweet that “you can now buy a Tesla with Bitcoin”. According to Simon Peters, market analyst at the eToro trading platform, Tesla and others are “showing that crypto is here to stay, and its mainstream adoption is only going to increase.”

Mr Shanmugaratnam further noted in his response that cryptocurrency funds are not authorised for sale to retail investors, since they are “highly risky as investment products”. He added that the MAS can enact additional powers to regulate digital token service providers such as Bitcoin and Ether if need be.

Read more on this story from Bloomberg.

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