October 17, 2016

RHTLaw Taylor Wessing Managing Partner Tan Chong Huat featured in The Straits Times

RHTLaw Taylor Wessing’s Managing Partner, Tan Chong Huat, was quoted in The Straits Times article titled “Law firm makes a case for branching out". The article was first published in The Straits Times on 17 October 2016.  Law firm makes a case for branching out Source: The Straits Times © Singapore Press Holdings Ltd Date: 17 October 2016 Author: Lee Xin En Local law firm RHTLaw Taylor Wessing has no intention of letting the Big Four accounting firms take a slice of Singapore's lucrative legal sector without a fight. PwC Singapore announced last month that it is hiring senior lawyers from top law firms here, while another Big Four firm, Deloitte, told The Straits Times last month that it is considering launching its own law firm. This is part of a global trend of accounting firms making forays into the legal business. Mr Tan Chong Huat, one of the founders of RHTLaw Taylor Wessing, says the firm is "built for the future" as it provides a suite of professional services, including forensics and data analytics. The firm has lifted staff numbers from 45 in the early days to 110 now. Mr Tan warned that Singapore law firms would be seriously challenged if the Big Four's "multi-disciplinary practices", comprising legal, accounting, restructuring and tax advisory services, arrive in Singapore in a "short and sudden" fashion. Mr Tan added that his firm had prepared itself for such high-level competition when it set up shop five years ago. RHTLaw started first but, the founders established a group of companies under the name RHT Holdings a year later. These include RHT Capital, which helps Catalist-listed companies with compliance, and RHT Corporate Advisory, a provider of corporate secretarial and governance advisory services. The RHT group now offers a wide range of services, including media and communications, as well as event-organising solutions. Mr Tan said RHT went beyond being a law firm because "in every business transaction, it's more than legal services that are needed". The strategy has paid off handsomely for the firm, which beat accounting companies to win an Accounting and Corporate Regulatory Authority project by leveraging on its analytics and compliance capabilities. But Mr Tan admitted that the journey to becoming an unconventional law firm was not easy. "As lawyers, your first and foremost instinct is to continue with the law practice. We took a long time to branch out.One of our concerns was the confusion in identity and branding." Luckily, the company, which celebrates its fifth anniversary today, is not resting on its laurels. It has strengthened its legal capabilities by hiring a team of former top police officers, enhancing its dispute resolution and litigation capabilities. This month, its strategic advisory arm formed a global alliance to expand its mergers and acquisition practice, while its capital arm received in-principle approval to be upgraded to a full listing sponsor. The company is counting on its strong Asian credentials to battle the big boys. It formed the Asean Plus group of 11 top Asian law firms in 2014. The firms share resources and aim to give clients integrated legal services. "When clients need us for cross-border transactions, our strong local knowledge means that we can quickly localise industry standards and execute the transaction because we are in a local jurisdiction," Mr Tan said. Asian expansion will be a priority of the firm. It aims to be in all major Asian markets by next year, and will pursue mergers in Indochina and Indonesia, he added.
October 13, 2016

RHTLaw Taylor Wessing Head of Regulatory Practice Nizam Ismail featured in Channel NewsAsia and Channel 5 News

RHTLaw Taylor Wessing Head of Regulatory Practice Nizam Ismail was featured in Channel NewsAsia and Channel 5 News. All three reports were in relation to the Monetary Authority of Singapore (MAS) decision to shut down Falcon Bank’s operations in Singapore citing serious failures in anti-money laundering controls and improper conduct by senior management regarding compliance. MAS has also imposed a fine on DBS and UBS for breaches in its anti-money laundering requirements and control lapses. The closure of Falcon Bank follows that of BSI Singapore earlier this year after investigation by MAS into 1MDB-related fund flows. Nizam contributed that the closure of a bank is a very extreme exercise of supervisory powers and it would have been carefully considered by the MAS prior to exercising that power. He also commented that this decision is a clear signal that anti-money laundering breaches will not be tolerated by the MAS. Nizam’s full features can be found in the following news reports: Singapore Tonight – Channel NewsAsia, 11 October 2016 PrimeTime Asia – Channel NewsAsia, 11 October 2016 5 News – Channel 5, 11 October 2016 Nizam Ismail is also a Co-Founder at RHT Compliance Solutions.
October 12, 2016

RHTLaw Taylor Wessing Head of Regulatory Practice Nizam Ismail featured in Reuters

RHTLaw Taylor Wessing’s Head of Regulatory Practice Nizam Ismail was featured in an article published in Reuters titled “Singapore shuts Falcon bank unit, fines DBS and UBS over 1MDB”. The article was first published in Reuters on 11 October 2016. Singapore shuts Falcon bank unit, fines DBS and UBS over 1MDB Source: Copyright © 2016 Reuters Date: 11 October 2016 Author: Anshuman Daga and Joshua Franklin Singapore's central bank on Tuesday shut down a second Swiss bank in the city-state and fined banks DBS and UBS in its biggest crackdown on alleged money-laundering activities connected with Malaysia's scandal-tainted 1MDB fund. The Monetary Authority of Singapore (MAS) said in a statement it had ordered Zurich-based Falcon Private Bank's Singapore branch to cease operating because of "a persistent and severe lack of understanding" of Singapore's money-laundering controls. It also accused Falcon's senior management in Switzerland and Singapore of "improper conduct". Falcon was fined S$4.3 million ($3.12 million) for 14 breaches of the money laundering prevention law, including not filing suspicious transaction reports and failure to inform authorities of irregular activities in their customers' accounts. Falcon is the second bank to lose its license in connection with Singapore's probe into 1MDB, in which authorities have frozen millions of dollars in bank accounts, fined banks and charged several private bankers. In May, Swiss-based BSI Bank's Singapore branch was ordered to be closed for failing to control money-laundering activities connected with 1MDB. That was the first time in 32 years Singapore had shut down a bank. DBS was fined S$1 million ($728,067) and UBS S$1.3 million on Tuesday for breaches in Singapore's anti-money laundering law. The two banks said in separate statements they would take action against staff responsible for the lapses. STANDARD CHARTERED ASSESSED In Zurich, the Financial Market Supervisory Authority (FINMA), ordered Falcon to turn over 2.5 million Swiss francs ($2.56 million) in what the watchdog said were illegal profits. A FINMA spokesman said the watchdog still has an ongoing investigation into UBS, Switzerland's biggest bank, in connection with 1MDB. FINMA also said it has opened enforcement proceedings against two former Falcon executives, without citing them by name. Singapore authorities arrested the Singapore branch manager of Falcon Private Bank, Jens Sturzenegger, on Oct 6, MAS said. The MAS said it is also finalizing its assessment of the Singapore branch of Standard Chartered Bank and would make an announcement in due course. Standard Chartered said it "would be inappropriate to comment" while the assessment is taking place. Falcon described the MAS decision as "regrettable and disappointing", but said it would now focus on growing in "core locations" in Switzerland, Middle East and London. The bank expects to close the branch, which as around 35 employees, in the next few months, a Falcon spokesman said. SIX COUNTRIES PROBING 1MDB Malaysia's 1MDB, once a pet project of Prime Minister Najib Razak who chaired its advisory board, is the subject of money-laundering investigations in at least six countries, including Switzerland, Singapore and the United States. The U.S. Department of Justice filed lawsuits in July seeking to seize dozens of properties tied to 1MDB, saying that over $3.5 billion was misappropriated from the fund. The lawsuits do not name Najib but say around $700 million of misappropriated funds flowed into the accounts of "Malaysian Official 1", who U.S. and Malaysian officials have identified as Najib. The Wall Street Journal reported last year that investigators had traced nearly $700 million that was sent in from an account at Falcon in Singapore in 2013 to accounts in Malaysia they believed belonged to the Malaysian prime minister. Both Najib and 1MDB have denied any wrongdoing. In January, Malaysia's Attorney General Mohamed Apandi Ali said Saudi Arabia's royal family gave Najib a $681 million gift, of which Apandi said about $600 million was later returned. GLOBAL FINANCIAL CENTERS FINMA said its review of Falcon had identified around $3.8 billion associated with the 1MDB Group that was transferred to accounts at Falcon between 2012 and mid-2015. "The business relationships and transactions booked in Switzerland and at Falcon's Singapore and Hong Kong branches were unusual and involved a high level of risk for the bank both through their nature and the amounts transacted," it said. It said Falcon had a number of business relationships with 1MDB group companies and executed transactions amounting to around $2.5 billion via accounts of two offshore companies. Falcon also had a client relationship with a young Malaysian businessman with links to individuals in Malaysian government circles, it said without naming him. "The bank did not verify how this individual had been able to acquire assets of $135 million in an extremely short period of time or why a total of $1.2 billion was transferred to his accounts at a later date - a transaction which was clearly at variance with the information he had provided when opening the account," it said. Internal warnings from bank staff were ignored, it found. FINMA banned Falcon from entering new business relationships with foreign politically exposed persons for three years and said Falcon would lose its license if there is any repetition of the offence. Falcon had $900 million in assets in Singapore, the bank's Chief Executive Walter Berchtold told a media briefing. The 1MDB case has not prevented the bank from attracting news assets, he added. Falcon's owner, a subsidiary of Abu Dhabi's sovereign fund International Petroleum Investment Company, said it views Falcon as a strategic investment "and has no current intention" to sell it. 'CLEAN AND TRUSTED' Ravi Menon, managing director of Singapore's central bank said in the MAS statement the board and senior management of financial institutions play a pivotal role in keeping Singapore a clean and trusted financial center. "They must put in place robust mechanisms to detect suspicious activities, promote strong risk awareness among their staff, and empower their compliance and risk management people," said Menon. "Most of all, they must set the tone from the top – that profits do not come before right conduct." The crackdown also sends a message that banks have to adopt a compliance culture and the need for compliance staff "to be able to take decisions independent of management," said Nizam Ismail, partner at RHTLaw Taylor Wessing LLP, where he advises clients on financial services regulation.
October 12, 2016

RHTLaw Taylor Wessing Head of Regulatory Practice Nizam Ismail featured in Channel NewsAsia

RHTLaw Taylor Wessing’s Head of Regulatory Practice Nizam Ismail was featured in an article published in Channel NewsAsia titled “Bank probes signal MAS’ zero tolerance for financial breaches: Experts”. The article was first published in Channel NewsAsia on 11 October 2016. Bank probes signal MAS’ zero tolerance for financial breaches: Experts Experts say the shuttering of two Swiss private banks, alongside the slapping of fines on DBS and UBS, is a clear sign from authorities that anti-money laundering breaches will not be tolerated in Singapore. Source: Channel NewsAsia Date: 11 October 2016 Author: Tang See Kit SINGAPORE: Singapore's drastic move to shutter yet another Swiss bank’s operations in the city-state underscores its willingness to take swift and tough actions against money laundering, industry watchers and lawyers told Channel NewsAsia. On Tuesday (Oct 11), the Falcon Private Bank became the second casualty of an ongoing probe on fund flows linked to Malaysia’s 1MDB, after the Monetary Authority of Singapore (MAS) ordered the bank’s Singapore branch to stop operations for serious failures in anti-money laundering (AML) controls. This comes five months after Swiss private bank BSI’s local unit was shuttered for similar reasons, marking the first shutdown of a merchant bank in 32 years. The central bank on Tuesday also slapped fines of S$1 million and S$1.3 million on DBS and UBS, respectively, for breaches of similar AML requirements. In the statement, MAS’ managing director Ravi Menon said the board and senior management of financial institutions play a “pivotal role” in keeping Singapore a clean and trusted financial centre. He added that the central bank will work closely with the industry to upkeep standards and strong deterrent actions will be taken against institutions that fall short. REGULATIONS ROBUST, BUT ENFORCEMENTS LAG Experts said the uncovering of lapses in anti-money laundering controls should not be interpreted as a lack of adequate regulations in Singapore even though there have been challenges in the implementation and enforcement of such rules. “I don’t think there are any problems with the regulations in Singapore or there's any gap … but for regulations to work, enforcements have to be as powerful as the regulation regime,” said Ms Radish Singh, who leads Deloitte Financial Advisory Services's Southeast Asia anti-money laundering and forensic team. “Now, they are obviously taking this to the next level (by) moving to enforcement,” added Ms Singh, who noted that the MAS chose to “send the message and set the tone right” with the closure of Falcon Private Bank due to its small portfolio in Singapore. “The AUM (assets under management) is small in Singapore (which means) the systemic impact on customers, the financial system and financial markets won’t be huge.” For Mr Nizam Ismail, a partner in law firm RHTLaw Taylor Wessing, the latest moves by the financial regulator indicate that it will not hesitate to take action against financial wrongdoings. “The fines might not be in the same quantum as the ones imposed by regulators in the West which involve billions of dollars…. but the closure of a bank is a very extreme exercise of supervisory power,” said Mr Nizam. “That is a clear signal that AML breaches will not be tolerated.” Experts reckoned that the Financial Action Task Force’s (FATF) recent report, which highlighted “moderate gaps” in Singapore’s fight against money laundering and terrorism financing, could have been an additional catalyst for MAS’ actions. Said compliance lawyer Tan Sin Liang from law firm SL Tan & Co: “With FATF’s remarks and the developments surrounding 1MDB, you can imagine the kind of pressure that MAS has and they will in turn pressure banks to increase the robustness in their AML controls.” A DENT ON SINGAPORE’S FINANCIAL REPUTATION? Earlier in July, MAS’ Mr Menon noted that the scandal surrounding Malaysia’s state investment fund has “made a dent” in Singapore’s reputation as a clean and trusted financial centre. When Channel NewsAsia raised this question to the experts, there were mixed opinions. “There’s a slight dent in terms of our reputation … but to be fair, what Singapore has gone through is really an occupational hazard of being an international financial centre where it attracts fund flows globally and across the region,” Mr Nizam said. For experts who disagreed, they reckon that the MAS has taken steps to rectify exposed weaknesses. “It does not tarnish the reputation of Singapore and in fact, what it demonstrates is the fact that we mean business,” said Ms Singh from Deloitte. “As a regulator, they don't mince their words and if financial institutions don't comply to their standards, this is what they will do to ensure that these institutions operate in the way as expected.” MORE REGULATORY ACTION TO COME Moving forward, industry watchers are expecting more regulatory action to come from the MAS. In particular, the financial regulator has yet to finalise its assessment of the local unit of Standard Chartered Bank. It said on Tuesday that it will make an announcement in due course. As the regulatory pressure mounts, experts say small private banks will likely feel the heat most amid rising cost pressure. “For small private banks, more specifically financial crime compliance is going to become more expensive, so they will have to rethink their strategy,” said Ms Singh, who expects the industry to see some form of consolidation and a sale of assets by some private banks. Mr Tan even expects the MAS to possibly rethink its criteria for the issuance of banking licenses, especially for small private banks. “I think the key now is not about competing for the wealth management market. The game has changed with the 1MDB probe … MAS may be rethinking its strategy and they will not be approving licenses for these small private banks like they did. “And I think it's not going to be just about the banks, but other financial institutions like remittances as well,” Mr Tan added.