MONETARY AUTHORITY OF SINGAPORE (MAS)

The MAS was formed on 1 January 1971 after Parliament passed the monetary  Authority of Singapore (MAS) Act in 1970. The Act gives the MAS the authority to regulate all elements of monetary, banking and financial aspects of Singapore, with the purpose of centralising all the various monetary functions associated with a central bank performed by several government departments and agencies under one single control.

The mission of the MAS is to sustain non-inflationary economic growth and promote a sound and progressive financial services sector. Its principal objectives are:(a) to act as the central bank of Singapore, including the conduct of monetary policy, the issuance of currency, the oversight of payment systems, and serving as the banker to and financial agent of the Government;(b) to conduct integrated supervision of financial services and financial stability surveillance; (c) to manage the official foreign reserves of Singapore; and(d) to develop Singapore as an international financial centre.

The mission of the MAS is to sustain non-inflationary economic growth and promote a sound and progressive financial services sector. Its principal objectives are:(a) to act as the central bank of Singapore, including the conduct of monetary policy, the issuance of currency, the oversight of payment systems, and serving as the banker to and financial agent of the Government;

The Acts contain statutory laws under the purview of the MAS, which are passed by Parliament. These have the force of law and are published in the Government Gazette. Examples of such Acts that the MAS are responsible in administering are: Banking Act (Cap. 19);Business Trusts Act (Cap. 31A); Deposit Insurance and Policy Owners’ Protection Schemes Act2011;  Exchange (Demutualisation and Mergers) Act (Cap. 99B);  Finance Companies Act (Cap.108); Financial Advisers Act (Cap. 110); Government Securities Act (Cap. 121A); Insurance Act (Cap. 142); Monetary Authority of Singapore Act (Cap.186); Money-Changing and Remittance Businesses Act (Cap.187); Securities and Futures Act (Cap. 289); and Trust Companies Act (Cap. 336).

The Acts contain statutory laws under the purview of the MAS, which are passed by Parliament. These have the force of law and are published in the Government Gazette. Examples of such Acts that the MAS are responsible in administering are: Banking Act (Cap. 19);Business Trusts Act (Cap. 31A); Deposit Insurance and Policy Owners’ Protection Schemes Act2011;  Exchange (Demutualisation and Mergers) Act (Cap. 99B);  Finance Companies Act (Cap.108); Financial Advisers Act (Cap. 110); Government Securities Act (Cap. 121A); Insurance Act (Cap. 142); Monetary Authority of Singapore Act (Cap.186); Money-Changing and Remittance Businesses Act (Cap.187); Securities and Futures Act (Cap. 289); and Trust Companies Act (Cap. 336).

Subsidiary Legislation (which includes regulations, orders,declarations and notifications)Subsidiary legislation spells out in greater detail the requirements that financial institutions or other specified persons (e.g. a financial adviser’s representative) have to adhere to. Subsidiary legislation has the force of law and may specify that a contravention is a criminal offence.

Directions ensure compliance by explaining specific instructions in detail to financial institutions or other specified persons. They have legal effect, meaning that the MAS can specify whether a contravention of a direction is a criminal offence. Directions consist of the following: Directives which primarily impose legally binding requirements on an individual financial institution or a specified person; and notices which primarily impose legally binding requirements on a specified class of financial institutions or persons.

Directions ensure compliance by explaining specific instructions in detail to financial institutions or other specified persons. They have legal effect, meaning that the MAS can specify whether a contravention of a direction is a criminal offence. Directions consist of the following: Directives which primarily impose legally binding requirements on an individual financial institution or a specified person; and notices which primarily impose legally binding requirements on a specified class of financial institutions or persons.

Guidelines set out principles or “best practice standards” that govern the conduct of specified institutions or persons. While they do not have any legal effect, specified institutions or persons are encouraged to observe the spirit of these guidelines.

Codes set out a system of rules governing the conduct of certain specified activities. Codes are non-statutory and do not have the force of law. A failure to abide by a code does not in itself amount to a criminal offence, but may have certain consequences.

Practice Notes are meant to guide specified institutions or persons on administrative procedures relating to, such as licensing, reporting and compliance matters. They do not have any legal effect, unless a procedure stated in the practice note is also required by an Act or regulation.

Practice Notes are meant to guide specified institutions or persons on administrative procedures relating to, such as licensing, reporting and compliance matters. They do not have any legal effect, unless a procedure stated in the practice note is also required by an Act or regulation.

Circulars are documents that are sent to specified persons for their information or are published on the MAS website for public information. Circulars have no legal effect.

Policy statements outline broadly the major policies of the MAS.

On 8 June 2010, the MAS issued a monograph on Tenets of Effective Regulation to communicate the MAS’ approach to developing effective regulation. The Tenets of Effective Regulation guide the design and formulation of regulation, and explains the MAS’ balanced regulatory approach, which continues to be relevant and effective in achieving the outcome of a sound and progressive financial services sector.

Tenet 1: “Outcome Focused” commits the MAS to uphold sound regulation of a high standard, but also acknowledges that there is no one way to do this. Good regulatory outcomes can sometimes be best achieved by prescriptive and clear rules, and at other times, by laying down broad principles and placing responsibility on financial institutions to deliver the regulatory outcomes. There are also different circumstances when one-size-fits-all rules, or differentiated rules are more appropriate.

Regulation should set standard, baseline requirements of broad application and provide for the exercise of supervisory judgement to set higher standards or permit exemptions when merited by the particular circumstances of a financial institution.

Tenet 4: “Responsive to Change and Cycles”. Regulation should be updated expeditiously as industry and market practices change and as new risks emerge. Regulation should also require the pre-emptive buildup of prudential buffers in financial institutions to weather a downturn or stress event, and to effectively address macro-prudential risks.

The costs and impact of regulation should be considered alongside the benefits and desired outcomes of regulation, so that the costs are not disproportionate to the benefits. Regulation should be targeted clearly at specific and material risks to the objectives of financial supervision. The design of regulation should take into account market realities, so that unintended and unnecessary disruption to market practices is minimised. Even in instances where regulation is specifically aimed at changing market practices, care will be taken to avoid placing undue burden.

Regulation should be clear, so that financial institutions have reasonable certainty as to their legal obligations. Regulation should not be subject to frequent and sudden changes that cause uncertainty and disruption to business and market practices. Where appropriate, like activities conducted by regulated institutions from different sectors should be subject to similar and consistent regulation.

SGX is the first demutualised, integrated securities and derivatives exchange in the Asia Pacific. Formed on 1 December 1999 by the merger of  the Stock Exchange of Singapore (SES) and the Singapore International monetary Exchange Limited (SIMEX), the SGX has since built up a presence and prominence that extends beyond the borders of Singapore.

SGX-ST operates the first fully electronic and floorless exchange in Asia. Besides facilitating the listing of leading companies in Singapore, it has also attracted listings of other companies from other countries.

SGX-DT over the years has expanded its range of international products and trading activities, making it one of the leading derivatives exchanges in Asia. It has also developed a reputation for being committed to an innovative and pro-market approach. SGX-DT offers the widest range of Asian derivatives in the world and also the widest range of international derivatives in the Asia Pacific.

SGX-DT offers the widest range of Asian derivatives in the world and also the widest range of international derivatives in the Asia Pacific. These instruments include futures and options on interest rates, stock indices and energy and commodities.

On 23 November 2000, SGX became the first exchange in the Asia Pacific to  be listed via a public offer and a private placement. Listed on the SGX itself, the SGX stock is a component of benchmark indices, such as the MSCI Singapore Free Index and the Straits Times Index.

Aside from equity investments (stocks) and derivatives, other classes of products that can be traded through the SGX include Exchange Traded Funds (ETFs), Real Estate Investment Trust (REITs), Global Depository Receipts (GDRs, which are certificates representing an issuer’s underlying shares), Company Warrants, Structured Warrants, Certificates (which are issuer-led structured financial products that offer investment opportunities, based on different market themes and expectations), Extended Settlements, and Equity Index Futures / Options.

The SGX regulatory functions include:
(a) Issuer Regulation (b) Member Supervision (c) Market Surveillance (d) Enforcement (e) Risk Management (f) Catalist Regulation

Issuer Regulation – to review listings applications, monitor ongoing compliance with listing requirements, and provide support on regulatory issues to listed companies;

Member Supervision – to process membership applications and permits, monitor members’ compliance with the SGX rules and provide support on regulatory issues to members, and investigate complaints concerning members;

In its surveillance function, SGX monitors trading activities of the securities and derivatives markets to detect unusual trading activities, and prohibited trading practices or conduct, including insider trading and market manipulation.