private banking is about trust. this means acting with integrity, putting the interests of the client first and safeguarding the confidentiality of the client at all times. let me highlight two areas for improvement. first, we are seeing increasing cases of mis - selling and mis - conduct in the private banking space. such practices are ultimately self - defeating. wealth managers must move away from a transaction - driven approach of pushing products to a client - centred approach that focuses on customised advice to meet long - term needs. private banks must move away from remuneration structures that rely primarily on commissions, or which are biased towards rewarding staff for recommending certain investment products. dealing fairly with customers must be made a priority. the private banking code of conduct developed by the industry sets out principles for proper business conduct by private banks and their staff, and seeks to enhance transparency to clients. mas ’ guidelines on fair dealing emphasise the responsibilities of the board and senior management of financial institutions to deliver fair dealing outcomes to customers and instill a culture of fair dealing that goes beyond compliance with regulatory requirements. second, the aggressive poaching of private bankers and rapid churning of professional staff are not healthy for the industry. they cause instability and unsustainable wage escalation in the industry, not to mention, increased operational risks. worse still, there have been a few cases of unauthorised leakage of customer information accompanying such moves. constant change in wealth advisors and porting over of client information from one bank to another is not the sort of service or behaviour a client expects. the wealth manager or private banker must respect the trust placed in him by his client as well as his employer and focus on building long - term relationships. a clean financial centre let me now move to the third imperative for growth – keeping the financial centre clean. i want to spend a bit more time talking about this issue, in view of the growing risks to the industry on this front. singapore ’ s financial centre is built on a bedrock of trust and integrity. but there are risks – both real and reputational. cross - border crimes have become increasingly sophisticated. bis central bankers ’ speeches like any international financial centre, singapore is vulnerable to being used as a conduit for illicit funds. and given our growing prominence as a centre for wealth management, the vulnerability is greater. we need to guard against financial flows relating to corruption, terrorism, politically exposed persons, and weapons proliferation. more recently, efforts by various governments to

strengthen tax enforcement have increased the risk of undeclared monies flowing to singapore. in response, the international community has strengthened considerably the frameworks for anti - money laundering ( aml ) and counter financing of terrorism ( cft ) and exchange of information on tax - related crimes. these developments will have implications for the wealth management industry globally. mas is fully committed to safeguarding the integrity and reputation of singapore as a clean financial centre : one, we have a strong legal and regulatory framework on aml and cft, in line with international standards. two, we have a rigorous regime of supervision to monitor compliance by financial institutions. three, we will strengthen cross - border co - operation to fight trans - national financial crime. four, we will step up vigilance against suspicious flows of funds arising from external developments. let me give you an update on what mas has done and will do in each of these areas. a robust legal and regulatory framework singapore has a robust regulatory framework on aml / cft. the key legislation is the corruption, drug trafficking and other serious crimes ( confiscation of benefits ) act, or cdsa. the cdsa makes it a crime to engage in the money laundering of benefits from a total of 417 so - called predicate offences, ranging from criminal breach of trust, to dealing with property of terrorist and market manipulation. the cdsa makes the reporting of suspicious transactions mandatory for all persons who become aware of such transactions in the course of their work. mas gives force to the cdsa by requiring all financial institutions in singapore to have in place an effective aml / cft framework. our coverage is comprehensive – banks, merchant banks, finance companies, insurance companies, capital market services licensees, licensed trust companies, financial advisers, insurance brokers, exempt fund managers, moneychangers, and remittance houses. financial intermediaries are held to rigorous client due diligence requirements. they are required to verify the bona fides of their customers and assess their risk profiles. where particular customers, business relationships, or transactions present a higher risk of money laundering or terrorism financing, enhanced customer due diligence is required. singapore ’ s aml / cft regime was evaluated three years ago by the financial action task force or fatf, the global standard setter for aml / cft. fatf assessed that singapore operates a strict and rigorous aml / cft regime, centred on a comprehensive and sound legal,