2. The Legal Profession (Professional Conduct) Rules (R 1) are amended by inserting, immediately after rule 11C, the following rules:11D.—(1) An advocate and solicitor or a law practice shall take reasonable measures to ascertain the identity of a client as soon as reasonably practicable before accepting instructions to act in a matter.| (2) An advocate and solicitor or a law practice receiving instructions in a matter from an agent on behalf of a principal client shall take reasonable measures to ascertain the identity of the principal client before accepting instructions to act in the matter. |
| (3) Subject to paragraph (4), where a client is not a natural person, an advocate and solicitor or a law practice shall take reasonable measures to ascertain the identities of the natural persons that have a controlling interest in or that exercise effective control over the client. |
(4) Paragraph (3) shall not apply in respect of a client that is —| (a) | a ministry or department of the Government, an organ of State or a statutory board; or | | (b) | a public company listed on a securities exchange or a recognised securities exchange within the meaning of the Securities and Futures Act (Cap. 289). |
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| Prohibition against anonymous accounts |
11E. An advocate and solicitor or a law practice shall not open or maintain any account for or hold and receive moneys from —| (a) | an anonymous source; or | | (b) | a client with an obviously fictitious name. |
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| Knowing your client’s business relationship |
11F.—(1) This rule shall apply where an advocate and solicitor or a law practice acts for a client in any of the following matters:| (a) | acquisition, divestment or any other dealing of any interest in real estate; | | (b) | management of client’s moneys, securities or other assets, or bank, savings or securities accounts; | | (c) | creation, operation or management of a company, corporation, partnership, society, trust or other legal entity or legal arrangement; | | (d) | acquisition, merger, sale or disposal of a company, corporation, partnership, business trust, sole proprietorship or other business entity; or | | (e) | a matter that is unusual in the ordinary course of business having regard to —| (i) | the complexity of the matter; | | (ii) | the quantum involved; | | (iii) | any apparent economic or lawful purpose of the matter; and | | (iv) | the business and risk profile of the client. |
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(2) When accepting instructions in relation to a matter referred to in paragraph (1), and at any time thereafter in accordance with the Law Society’s Practice Directions, the advocate and solicitor or the law practice shall obtain satisfactory evidence as to the nature and purpose of —| (a) | the business relationship with the client in the matter; and | | (b) | the business relationship between the client and any other party to the matter. |
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| (3) If a client refuses or is unable to provide the satisfactory evidence required under paragraph (2), the advocate and solicitor or the law practice shall not act or continue to act for the client. |
(4) The satisfactory evidence required under paragraph (2) shall include the following:| (a) | evidence to ascertain the identity of the client; and | | (b) | if moneys or securities are to be held for the client by the advocate and solicitor or the law practice, evidence to identify the legal and beneficial owners of the moneys or securities to be deposited with or held by the advocate and solicitor or the law practice. |
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| Suspicious transaction reporting |
11G. Where an advocate and solicitor or a law practice knows or has reasonable grounds to suspect any matter referred to in section 39(1) of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (Cap. 65A), the advocate and solicitor or the law practice shall disclose the matter to —| (a) | the Suspicious Transaction Reporting Office of the Commercial Affairs Department by way of a suspicious transaction report; or | | (b) | an authorised officer under that Act, |
| in accordance with section 39 of that Act. |
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11H.—(1) A law practice shall retain for not less than 5 years after the end of a matter —| (a) | the documents that were used to ascertain the identity of the client under rule 11D; | | (b) | the documents that were used to ascertain the nature and purpose of the business relationships under rule 11F; and | | (c) | records of transactions undertaken on behalf of the client in that matter. |
| (2) A law practice shall ensure that the documents and records retained shall be sufficient to enable information on the identity of the client and details of the matter to be given to a competent authority when requested, subject to the obligations relating to professional communications under section 128 of the Evidence Act (Cap. 97). |
| (3) In this rule, “competent authority” includes the Council, a person appointed by the Council under rule 11I and a police officer. |
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| Powers of inspection by Council |
11I.—(1) In order to ascertain whether rules 11D to 11H are being complied with, the Council, acting —| (a) | on its own motion; or | | (b) | on a written complaint lodged with it by a third party, |
| may require an advocate and solicitor or a proprietor, partner or director of a law practice to produce any document or provide any information or explanation to the Council or to any person appointed by the Council. |
| (2) Before appointing a person under paragraph (1), the Council shall consider any objection made by the advocate and solicitor or the proprietor, partner or director of the law practice to the appointment of that person on personal or other proper grounds. |
(3) A requirement under paragraph (1) shall be made under the hand of a member of the Council and may be served —| (a) | by delivering it to the advocate and solicitor or the proprietor, partner or director of the law practice; or | | (b) | by sending it by registered post to his usual or last known address as maintained by the Society. |
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| (4) Upon being required to produce any document, information or explanation, the advocate and solicitor or the proprietor, partner or director of the law practice shall provide to the Council or to any person appointed by the Council the document, information or explanation. |
| (5) A document that is in electronic form shall be produced in the form or format required by the Council or the person appointed by the Council. |
(6) The Council or the person appointed by the Council may —| (a) | retain the document provided and make and retain copies of the document; and | | (b) | record the information or explanation provided. |
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(7) The Council may —| (a) | use the document, information or explanation obtained as a basis for proceedings under the Act; and | | (b) | disclose the document, information or explanation for the purposes of an investigation of a criminal offence and of subsequent criminal proceedings.”. |
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[G.N. Nos. S 410/2001; S 71/2005; S 656/2006] |
