Legal Updates for August 2024Generative AI and Financial Institutions – MAS Provides Insight on Cyber Risks and Mitigation Measures
The Monetary Authority of Singapore has published an information paper on "Cyber Risks Associated with Generative AI" ("GenAI Paper"). The GenAI Paper aims to raise financial institutions’ ("FIs") awareness by highlighting key cyber threats arising from GenAI, the risk implications, and the appropriate mitigation measures that FIs can take.
In this Update, we highlight the key features of the GenAI Paper and what it means for FIs. We also provide an overview of the solutions that Rajah & Tann (including Rajah & Tann Technologies and Rajah & Tann Cybersecurity) can provide, mapped against the elements of the GenAI Paper.
New Screening Report Requirement for S13O, S13U Tax Incentive Applications by Family Offices
In December 2023, the Monetary Authority of Singapore ("MAS") extended the scope of due diligence checks to a wider group of individuals and entities associated with family offices who are applying for tax incentives. Depending on the screening results, applicants may be required to provide further documents to support their application.
On 5 August 2024, MAS published a list of specialist firms that may conduct these screening checks on family offices ("Screening Service Providers") for money laundering and terrorism financing risks. It also stipulated that all new tax incentive applications for fund vehicles managed by family offices must be accompanied by a screening report issued by a Screening Service Provider, beginning from 1 October 2024.
This new requirement is part of a series of moves by MAS to heighten regulatory scrutiny of family offices, with a focus on money laundering risks. In this Update, we look at the new requirement and comment on the broader context of its implementation.
MAS Proposes to Impose on All REITs Minimum Interest Coverage Ratio Threshold and Aggregate Leverage Limit of 50%
The Monetary Authority of Singapore ("MAS") issued a consultation paper seeking comments on its proposals to:
- simplify the leverage requirements for real estate investment trusts ("REITs"); and
- require REITs to perform and disclose sensitivity analyses on the impact of changes in EBITDA and interest rates on their interest coverage ratio (ICR) in their interim financial results and annual reports.
Comments on the proposals must be submitted to MAS by 23 August 2024.
Please read our Client Update for more details about the proposals in the MAS consultation paper.
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