Data on Sanctioned Individuals Operating Tax-exempt Family Offices Locally

Mr Speaker, my response will also address related questions by Ms Sylvia Lim, Mr Louis Chua and Ms He Ting Ru from yesterday and today, as well as a written question by Mr Abdul Muhaimin Abdul Malik scheduled for tomorrow’s Sitting.

Singapore upholds high regulatory standards in our financial system aligned with international standards. It is one reason why many investors view Singapore as a trusted financial hub. Like other global financial centres, having high standards does not mean there will be zero cases involving entities and individuals who break the rules or who fail to comply with our regulatory requirements. What is key is that where wrongdoing is identified, the authorities will investigate thoroughly and take firm enforcement action in accordance with the law.

The money laundering investigations by the Police against Chen Zhi and related associates are ongoing. Enforcement operations were conducted on 30 October 2025. Arising from the enforcement operations, the Police have issued prohibition of disposal orders and seized a range of assets, including properties, cars, bank accounts and securities accounts.

Prior to the indictment of Chen Zhi by the United States (US), our Police had been conducting probes into Chen Zhi and his associates. Thus far, the Monetary Authority of Singapore (MAS) has identified two Single Family Offices (SFO) funds granted tax incentives that are linked to the sanctioned individuals. MAS has ceased the tax incentives. As investigations are ongoing, I seek Members’ understanding that I am not able to comment further on the details at this stage.

Based on available data over the past three years, about 3% out of 1,300 applications were rejected. Besides the rejected applications, some potential applicants also withdrew their interest to apply before submitting a formal application when questions were posed and requirements were clarified at the pre-application stage.

As part of the tax incentive application process, individuals and entities are screened against databases to check that there are no reports on their involvement in illegal activities such as money laundering and terrorism financing. The SFO fund is also required to open and maintain an account with an MAS-licensed bank and be subject to the bank’s customer due diligence and ongoing monitoring checks, including detecting any unusual or suspicious transactions.

MAS regularly reviews and refines its regulatory regime. It consulted on proposed changes to the SFO regulatory regime in July 2023. In addition to now requiring all SFOs based in Singapore, whether they are receiving tax incentives or not, to maintain bank accounts, SFOs will need to notify MAS upon the commencement of their operations and submit annual returns to MAS. The returns supplement MAS’ ongoing surveillance efforts to maintain the integrity of our financial system.

MAS and the financial industry will continue to review our surveillance and detection capabilities. But we need to adopt a sensible and calibrated approach, and should refrain from a knee-jerk overreaction when cases happen from time to time.

Similar to all major international financial centres, it is not possible to have zero incidents given the complex nature of the financial services industry and the high volume of daily transactions. In addition, combatting financial crime requires a global effort, as illicit fund flows are often cross-border in nature. In the Prince Holdings case, the US seized US$15 billion in Bitcoins and the United Kingdom (UK) froze 19 properties. It was announced yesterday that Hong Kong and Taiwan have also recently moved to seize substantial amounts of assets and have made arrests. All major financial centres have to remain vigilant and work together to combat financial crimes.

Sir, SFOs linked to individuals convicted of money laundering offences represent a very small proportion of the overall sector, at less than 1%. We have to remain open to bona fide family offices and genuine investors, to continue growing our financial services industry and creating good jobs for our people. As at end 2024, the wealth management and private banking functions in banks employed more than 13,000 locals. High net worth clients also use other service providers such as legal and tax advisors, fund administrators and accounting firms.

Compared to other financial centres, many industry stakeholders already consider Singapore to have more stringent due diligence standards for high net worth clients. If we were to tighten further to the point where the processes become overly cumbersome, it will affect our competitiveness, deter legitimate investors and put many local jobs at risk. This is not the outcome we want for Singapore.

There is a Chinese saying that when we open the windows, some flies may also enter. The solution is not to shut our windows and block out sunlight and fresh air. What matters is that we act swiftly to deal with the flies that enter, while also letting in sunlight and fresh air. This is the approach we take in Singapore. Risk-proportionate, not zero-risk.

MAS will continue to take a risk-proportionate approach to maintain our status as a trusted financial centre. MAS expects our financial institutions to do the same, so that we collectively maintain high standards while keeping our system efficient and competitive. Singapore will also continue to work closely with our international counterparts to deter and enforce against bad actors who operate across different jurisdictions.

Thank you, Speaker. Three supplementary questions for the Minister, given that Prince Group's scam operations were publicly documented by English language investigative media as early as February 2024 and even earlier in July 2022 in Chinese court notices, did MAS conduct any mid-term reviews of DW Capital Holdings between 2018 and the US action in October 2025? And if not, why not?

The second supplementary question. I thank the Minister for his metaphor. I think there are a lot of flies in the house. So, as more cases of criminality associated with family offices that have been set up in Singapore have come to light, will the Government start to work on the assumption that illicit money generated by scams and other cross-border crime has already penetrated Singapore? And therefore, will the Government mandate enhanced due diligence on existing client relationships across all regulated financial sectors, not just new client onboarding?

The third supplementary question. Further to my previous question, will MAS require all existing 13O and 13U tax incentive holders, and not just new applicants, undergo mandatory rescreening?

Mr Speaker, I am disappointed that Mr Tiong chose to conduct this discussion in this manner. I only wanted to clarify the position so that I can give him a considered response. Earlier, some of his other colleagues, including Mr Pritam Singh, Leader of the Opposition, said that the WP will be a responsible opposition party. And I hope Mr Tiong bears that in mind in our future discourse.

Sir, I thank the WP's Mr Tiong for agreeing with me that we should not adopt a zero-risk approach. I think that is the key point that I wanted to clarify. So, he could have just said that and not add on all the other additional comments.

So, if we agree with that, that it is not practical to adopt a zero-risk approach, then I think we can take a look at what are some of the moves that we can make to maintain high standards on one hand, that is important, we want to remain a trusted financial centre; and at the same time, remain efficient and competitive.

Having high standards is not at odds with being efficient and competitive. If Mr Tiong believes that being inefficient, being overly cumbersome, adopting a zero-risk approach, being overly risk adverse, is the right way to go, I think if we follow his advice, our financial hub status is at risk.

We need to take a risk-proportionate, calibrated approach, just like all other major international financial centres – maintain high standards, deter bad actors, take action against them when we discover wrongdoings. No doubt about that. That is our position. But at the same time, welcome genuine investors, legitimate family offices who want to set up and tap our financial services industry here, and create jobs for our people. That is the approach that Singapore wants to take.

With regard to the first supplementary question from Mr Tiong, the reports that have surfaced, I mentioned in my main reply that the banks have also been taking action in monitoring the situation and we do reject some of the applications, and some of them, they withdrew after the banks asked questions. And there is also a system whereby the financial institutions would file Suspicious Transactions Reports (STRs). This was something that the banks, the financial institutions have been doing earlier. But we need to bear in mind that STRs on their own do not equate to offences being committed. It is just a suspicious transaction that is being highlighted.

For the Police, the Police would have to take a look at these early signals, including the STRs that are filed, and conduct further enquiries on their own, including looking at financial intelligence that they have picked up. And this is what the Police had done. They had also worked with their foreign counterparts to gather further information on the case, because, as I mentioned in my main reply, this case involves not just Singapore, but many other jurisdictions. And after the news broke in October 2025, the Singapore Police Force (SPF) reached out to international counterparts to gather more information on criminality with nexus to Singapore to further these investigations and then took action on 30 October, as I mentioned in my main reply.

Mr Tiong also asked, I think he made a comment that there are many flies in the house. I do not know which "house" Mr Tiong is referring to, but as far as we are aware, the house of Singapore, we do not have many flies.

I mentioned earlier that the SFOs that are involved in money laundering and are convicted for money laundering, represent less than 1%. So, if we accept that we do not want to have zero risk, and we accept that when we open the windows to let in sunlight and fresh air, that there will be some flies, I think less than 1% to me, does not mean that there are many, many flies in this house.

And I also mentioned that when we detect those flies, we deal with them firmly. I think that is the key. Not to aim for zero, not to go for zero risk. But when we detect any cases of wrongdoing, when we detect any flies, we go for them. We take a firm enforcement approach.

MAS will continue to review our rules and our procedures. I think Mr Tiong is mistaken that we only do the checks at the point of application and not on an ongoing basis. I mentioned earlier that the banks do file STRs, and we are also in the process of reviewing what our rules should be, so that we are able to maintain high standards, we are able to deter bad actors from wanting to come to Singapore and importantly, maintain our competitiveness as a financial centre.

Thank you, Speaker. I have one question for the Minister. It was reported in July that the Minister in his capacity in the MAS had announced that there was an intention to shorten the process of registration for family offices, I think, from 12 months to three months, to make it faster for these offices to open bank accounts and to claim their tax incentives.

So, I am just trying to understand whether this shortened process means that banks would have less time to do their due diligence? And in that sense, there is a possibly increased risk that money laundering indications could slip under the radar, in a sense.

Mr Speaker, I thank Ms Lim for her supplementary question. In the announcement that I made earlier this year, I made it clear – and this is in the public domain, on public record – that we want to look at how we can streamline some of the processes so that the waiting time is not too long, but at the same time, I emphasised this, we must maintain high standards.

Why? Because Singapore is not competing on the basis of being the quickest, the one with the lowest standards, the easiest to set up an account. That is not our competitive advantage. Our competitive advantage is that we are a trusted financial centre. And if we want to achieve that, we need to maintain high standards. So, that is why I emphasised that any process change and any streamlining should not compromise our high standards.

Having said that, the process changes that we are looking at are also not at odds with maintaining high standards. So, I want to assure Ms Lim that it is not to ask the financial institutions to skip steps or to not look out for certain suspicious reports in their due diligence checks. I think we must maintain high standards in that area. But it is really to clarify – so, what are we looking for, to avoid a lot of toing and froing, and second guessing? And it is also to look at how we can streamline the processes so that, through the use of technology, through the use of information sharing, we make it more efficient, so that we do not deter the genuine cases, but we block out and we do not admit the ones that are suspicious and have problems that will affect our high standards and reputation.

It is a fine calibration, but I want to assure Ms Lim that what we recently announced is meant to simplify the requirements and improve operational efficiency. It does not change the anti-money laundering checks that we submit the applicants to. They are still screened, they are still checked.

They will continue to be required to open and maintain a bank account in Singapore, which means that the account will continue to be subject to the bank's customer due diligence and ongoing monitoring checks. That was my clarification with Mr Tiong earlier. It is not just at the point of application. It is ongoing check as well.

So, this is something which I hope the WP, if you agree that we should not adopt a zero-risk approach, but a risk-proportional approach, then I think we need to strike that balance. We do want our financial services industry to remain competitive, our wealth management industry to remain competitive. I mentioned in my main reply that this sector supports at least 13,000 local jobs and may grow further. But at the same time, we do not want to do it in a manner which will compromise high standards and affect our reputation. That is the balance we want to strike.

Thank you, Speaker. Let me first declare that I am working in a financial institution which, to my understanding, does businesses with family offices.

Just one supplementary question for the Minister. I agree with the Minister that we should act swiftly in such cases, but at the same time, I am also concerned that yes, while we did carry out the enforcement actions within weeks of the US press release, it may give the impression that we are only doing so after the US has commenced action. And so, I wanted to understand, based on what the Minister has shared and based on the SPF's press release, that from the time we received the STR notification in 2024, what have been the reasons for the delay in terms of the actions taken against this group, and whether it is because of the lack of evidence or what were the rationale behind the one year-plus delay?

Mr Speaker, I thank Mr Chua for his question. It is kind of similar to what Mr Tiong asked earlier. I did explain the process of how we deal with STRs that are filed by the financial institutions. But please allow me to maybe reiterate some of the key points.

So, the financial institutions filed STRs earlier. This was before the US made public that they are taking action against Chen Zhi and his associates. These STRs are part of what the authorities would take into account in assessing whether further investigation will be required and further action will be required.

I think Mr Chua is familiar with how this works. He is from the financial services industry.

STRs on their own may not equate to an offence being committed. It is just to highlight that could be what looks like a suspicious transaction. So, it is an early risk signal that will need to be looked into, but on its own, does not constitute an offence has been committed. So, the Police will need to look at that and consider other sources of relevant information, including working closely with their international counterparts.

If you look at what is happening to the Prince Holdings case, it is not just in Singapore, where the authorities have taken action in recent weeks. I mentioned in my main reply that Hong Kong, Taiwan and the UK are also some of the other jurisdictions that have done the same.

So, I think this is the nature of such operations. We need international collaboration. We need to share intelligence and information with our counterparts, and depending on how they structure their complex operations, we then work together to see how we can put a stop to it. It requires global cooperation.

I am not sure I heard the Minister accurately, so I just want to ask for good order. When an application is before the SFO, will the office do a first round of anti-money laundering search that is usually required by all financial institutions, law firms or accounting firms, when a client approaches with a new business? And if not, could I request that the Government consider requiring the SFO to do so because, after all, it is the first gatekeeper in any of this relationship with a new family office?

Mr Speaker, I thank Mr Tan for his clarification. Sir, we did put up a consultation paper entitled "Proposed Framework for Single Family Offices", whereby MAS will take a look, and we made some proposals, on how we can subject the SFOs to a licensing class exemption framework, which would require them to notify MAS of their presence and to comply with specific requirements, such as the SFO and its fund vehicle maintaining a Singapore bank account, thereby subjecting all SFOs to anti-money laundering controls. So, this is something which we will be sharing more details on the date of implementation and also, to look at what are the changes to the legislation that we will need.

The point that Mr Tan mentioned earlier about doing the checks, we do that. And we do that at two levels, so the banks will, on their own, do some of these checks with the clients before they allow them to open accounts, and that is part of their due diligence checks. And for MAS, we will do another check if they are applying for tax exemption. So, that is on top of what the banks will check.