With effect from 15 May 2015, the regulatory framework for corporate service providers (“CSPs”) administered by the Accounting and Corporate Regulatory Authority (the “ACRA”) will be enhanced under the ACRA (Amendment) Act 2014 (the “ACRA Amendment Act”), the ACRA (Filing Agents and Qualified Individuals) Regulations 2015 (the “Regulations”) and the ACRA (Authorised Users of Electronic Transaction System) Regulations 2015.
The new enhanced framework is aligned with the recommendations issued by the global standard setter for anti-money laundering and counter terrorism financing, the Financial Action Task Force (“FATF”).
Corporate service providers
CSPs are individuals or business entities which provide services as a business to third parties such as acting as a formation agent of legal persons. Under the enhanced regime, CSPs which help to set up companies must conduct the requisite due diligence checks and have robust systems and processes in place to prevent abuse of such corporate vehicles for criminal or other illegitimate purposes.
From 15 May 2015, persons who intend to provide CSP services and carry out filing transactions using the electronic filing system administered by the ACRA on behalf of another person must first be registered as registered filing agents (the “FAs”). A registered FA may carry out a transaction with the ACRA only if he acts by or through a registered qualified individual (the “QI”). To be registered as a registered FA and a registered QI, existing professional number holders and up to two existing registered prescribed persons, respectively, must make the transition by submitting an online application form to the ACRA. QIs are the professionals employed or appointed by the FAs to carry out transactions with the ACRA. Employees who do not qualify as QIs can carry out transactions with the ACRA under the QIs’ supervision.
The ACRA Amendment Act also makes consequential and related amendments to the Accountants Act, the Limited Liability Partnerships Act and the Limited Partnerships Act.
Fit and proper considerations for registered FAs and registered QIs
Under the Regulations, the Chief Executive of ACRA has the discretion to reject an application to be a registered FA or a registered QI if the “fit and proper” requirements or any of the other requirements imposed by the Chief Executive are not met.
A transition exercise for existing professional number holders and existing prescribed persons to be registered respectively as FAs and QIs is now taking place from 13 April 2015 to 8 May 2015.
Existing professional number holders who do not apply for registration as FAs and for their prescribed persons to be registered as QIs by 8 May 2015, will not be able to file transactions with the ACRA from 15 May 2015 onwards.
To aid CSPs in understanding these new legal requirements, the ACRA, together with a Working Group comprising representatives from the Singapore Association of the Institute of Chartered Secretaries and Administrators (SAICSA), Institute of Singapore Chartered Accountants (ISCA), The Law Society of Singapore, Association of International Accountants, and Institute of Company Accountants, have prepared a set of draft guidelines. The draft guidelines were issued for the purpose of a public consultation between 20 March 2015 and 15 April 2015.
The following reference materials are available on the ACRA website www.acra.gov.sg.