News

To curb money laundering, the Monetary Authority of Singapore (MAS) has always stipulated assessing and checking the backgrounds of clients at brokerage firms. It requires that all trading clients be scrutinised by the brokerages, regardless of active or dormant ones. In response, certain houses have started suspending and then closing the trading accounts of those with no trade for the past five years. The move came about given the strain in conducting 100 per cent checks on all clients with their limited manpower resources and additional costs. Many Singaporeans have invested in local shares and parked them in Singapore Exchange’s Central Depository, mostly with the intention to sell them when the timing is ripe. They are stuck with having their accounts closed even though they have shares to dispose of in the future. An amicable compromise could be reached if MAS requires assessment checks only for trading clients, not for dormant ones, and brokerage firms transfer inactive (or dormant) clients into a holding area barred from share trading, but check them before their release for share trading.