Navigating New Regulations: ACRA’s 2025 Crackdown on CSPs and Directors

Mandatory CSP Registration – No More Exceptions

With the roll-out of new regulations by the Accounting and Corporate Regulatory Authority (ACRA) set for 2025, the pressure is on for Corporate Service Providers (CSPs), nominee directors, and registered address providers to align their operations accordingly. The incoming rules will not only reshape the responsibilities and compliance requirements for these entities but also introduce severe penalties for non-compliance, including substantial fines and potential imprisonment. This article will break down what these changes entail and how you can prepare to meet the heightened expectations.

Increased Scrutiny on Nominee Directors

Gone are the days when some CSPs could slip through regulatory nets. Starting from 2025, all CSPs must register with ACRA, and a Registered Qualified Individual (RQI) must be appointed mandatorily. The failure to comply with these stipulations could lead to criminal charges, significant financial penalties reaching up to S$50,000, or even incarceration. This serves as a strict reminder that the regulatory landscape is shifting towards greater transparency and accountability.

Enhanced Anti-Money Laundering Measures

The new framework specifically targets nominee directors, who will now experience rigorous scrutiny. Moving forward, only CSPs that are registered can appoint nominee directors. Those managing over 50 roles will undergo additional reviews, and past non-compliance might block further appointments. This increase in scrutiny ensures that directors are actively involved and accountable in their roles, aligning with the global push towards more responsible corporate governance.

Proactive Steps for Compliance

ACRA is tightening the reins on anti-money laundering protocols as part of these regulations. CSPs are now required to conduct enhanced due diligence and comprehensive risk assessments routinely. Any breaches of these regulations come with steep penalties, potentially costing up to S$100,000 per violation. This highlights the increasing importance of direct and transparent client engagements to ensure that operations comply with legal standards.

Consequences of Non-Compliance

To keep on the right side of these regulations, directors, and CSPs need to act swiftly. Mandatory CSP registration and the appointment of an RQI are just the starting points. It’s crucial to review and manage directorships frequently while keeping KYC and AML protocols up to date. The direct engagement with clients has shifted from a good practice to a mandatory requirement, underscoring the need for CSPs to foster transparent and compliant operations.