The Monetary Authority of Singapore issued a response to a letter backing financial institutions’ due diligence activities on its employees’ indebtedness in order to assure they are «fit and proper».
«It is entirely appropriate for financial institutions to assure themselves that their employees and representatives providing financial services to customers are in good financial standing,» the MAS said in response to a letter from a member of the public asking why companies are demanding employee credit reports.
According to the regulator, financial soundness is amongst the criteria of being «fit and proper», alongside honesty, integrity, reputation, competency and capability. It noted that watchdogs elsewhere such as the U.K. and Hong Kong apply similar criteria that include financial soundness.
MAS underlined that it did not provide any prescription regarding checks on financial soundness but said that FIs «minimally ascertain that the representative is not an undischarged bankrupt».
Data Protection?
Fit, proper or not, the letter also highlighted concerns that employers may have violated data protection laws when requesting for employee credit reports. Assuming firms notify individuals and obtain their consent for collection, use and disclosure of personal data, no breaches have been made.
«Requesting representatives to provide a copy of their credit reports for conducting due diligence checks is considered an appropriate purpose in the context of employment where financial soundness is required. It is not a breach of the PDPA (Personal Data Protection Act 2012),» said Jerome Lee, director of corporate communications for MAS.
