Singapore MAS launches COSMO: FIs can warn each other of suspicious activities

Rick Steves

“COSMIC will enable FIs to warn each other of suspicious activities and make more informed risk assessments on a timely basis. It complements the industry’s existing close collaboration with MAS and law enforcement authorities to combat financial crime. This will strengthen Singapore’s capabilities to uphold our reputation as a well-regulated and trusted financial centre.”

The Monetary Authority of Singapore (MAS) has launched COSMIC, a digital platform aimed at bolstering the financial sector’s efforts against money laundering, terrorism financing, and proliferation financing.

Launched alongside the activation of the Financial Services and Markets (Amendment) Act 2023, COSMIC enables financial institutions (FIs) to share critical customer information, enhancing the fight against global financial crimes.

COSMIC born out of FSMA amendment

The Financial Services and Markets (Amendment) Act 2023, was introduced to further enhance the legislative framework established by the Financial Services and Markets Act 2022 in Singapore. This amendment specifically provided the legal basis and safeguards necessary for the implementation of COSMIC (Collaborative Sharing of Money Laundering/Terrorism Financing Information & Cases), a centralized digital platform designed to facilitate the sharing of customer information among financial institutions (FIs) to combat money laundering, terrorism financing, and proliferation financing.

The key features of the 2023 amendment include:

  • Legal Framework for Information Sharing: It establishes a structured and legal framework that allows participating FIs to share information about customers whose profiles or behaviors raise red flags for potential illicit activities. This is done under strict criteria and safeguards to ensure the protection of customer information.
  • Safeguards and Confidentiality: The amendment mandates that participant FIs must implement policies and operational measures to protect the confidentiality and integrity of the information shared through COSMIC. This ensures that the privacy and rights of individuals are respected, while still enabling effective collaboration against financial crimes.
  • Operational Guidelines: It outlines the operational guidelines for FIs participating in COSMIC, including the types of information that can be shared, the conditions under which sharing is permitted, and the procedures for sharing and receiving information.
  • Encouragement of Proactive Engagement: Customers are encouraged to cooperate with FIs by providing timely responses to requests for clarifications on their risk profiles or transactions. This facilitates more informed and effective risk assessments by FIs.

DBS, OCBC, UOB, Citibank, HSBC, StanChart joined COSMIC

The legislative framework for COSMO followed a public consultation in October 2021 and the amendment of the Financial Services and Markets Act 2022 in May 2023. Under this framework, FIs can share customer information based on objectively defined suspicion indicators, ensuring the confidentiality of shared data while protecting legitimate customers’ interests. The system encourages customers to actively engage with FIs, providing necessary information for accurate risk assessments.

COSMIC is the result of a collaboration between MAS and six leading commercial banks in Singapore, including DBS, OCBC, UOB, Citibank, HSBC, and Standard Chartered Bank. These institutions will participate in the initial phase, focusing on key financial crime risks within commercial banking. Participation in COSMIC is voluntary.

Loo Siew Yee, Assistant Managing Director of Policy, Payments & Financial Crime at MAS, said: “COSMIC will enable FIs to warn each other of suspicious activities and make more informed risk assessments on a timely basis. It complements the industry’s existing close collaboration with MAS and law enforcement authorities to combat financial crime. This will strengthen Singapore’s capabilities to uphold our reputation as a well-regulated and trusted financial centre.”

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