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The Monetary Authority of Singapore (“MAS”) will issue “MRC” requirements through Notices to ensure that all Financial Institutions (“FIs”) conduct and respond to reference checks on a minimum set of standardised information.
MRC protect against “rolling bad apples”—individuals with a history of misconduct who move from job to job without disclosing their past. By mandating reference checks, firms can share key information about potential hires, making smarter, risk-aware decisions and preventing misconduct from repeating. It’s a crucial step toward accountability and safeguarding the industry.
Key Requirements
- Hiring FIs are required to conduct reference checks on – Material risk personnel (decision-making authority), Senior managers (C-suite, Head of Dept of “Relevant Function”), Broking staff, Representatives, Insurance agents.
- Reference checks to include Employment History, Compliance Records (Fitness and Propriety) and Others (if applicable) i.e. last 4 balance score card, persistency ratio.
- Reference checks should cover all employers/financial institutions the individual has been with in the past 5 calendar years from the date the reference check is conducted.
- Responding FI’s should provide their replies within 21 calendar days from the date they receive the reference check request.
- Responding FI should keep mandatory records for all individuals who perform relevant functions for 5 years after they leave the organization.
- “Relevant Functions” include: handling funds or assets, risk management and control, risk rating, critical systems administration
Timeline
- 25 June 2021: Consultation period closed for “Consultation Paper on Proposals to Mandate Reference Checks”.
- 12 Dec 2023: The MAS published response, stating that “MAS will be consulting on the draft Notices in due course”.
- Consultation of drafting of Notices
- MAS response to consultation
- Issuance of Notices and FAQs
- Transition Period: Once MAS issues Notice on MRC, FIs will be given a one-year transition period to comply with the new regulations.
