Sixteen Financial Institutions Accorded Approved Bond Intermediary (ABI) Status



MAS Sets Up New Committee to Oversee Bond Market Developments

Date: 5 Aug 1999 

FACT SHEET 1

APPROVED BOND INTERMEDIARY (ABI) SCHEME

With the intention of further promoting and developing a vibrant bond market in Singapore, Minister for Finance Dr Richard Hu had introduced an Approved Bond Intermediary (ABI) tax incentive scheme in March 1999.

Under the ABI scheme, the Monetary Authority of Singapore (MAS) will evaluate a financial institution's debt origination and trading capabilities in Singapore on an overall basis. Once a financial institution has been accorded the ABI status, all debt securities lead managed by it would be treated as qualifying debt securities (other conditions to apply1). The ABI and the qualifying debt securities will enjoy the following tax incentives:

  1. the ABI will be exempt from tax on fee income earned from arranging, underwriting and distributing the securities;

  2. financial institutions and companies in Singapore will enjoy a 10% concessionary tax rate on interest income earned from holding the qualifying debt securities; and

  3. interest paid on the qualifying debt securities to non-residents will not be subject to withholding tax.

To qualify for the ABI status, financial institutions must have a substantial debt team in Singapore. In evaluating the applications for ABIs, MAS will consider qualitative criteria such as the financial institution's expertise in origination and structuring, the extent of debt sales/distribution/trading capabilities in Singapore, the track record of the institution as well as its plans for developing its debt arrangement and trading capabilities in Singapore. Due consideration will also be given to quantitative criteria such as the number of experienced debt origination/structuring, sales/distribution and trading staff in Singapore.

The ABI status may be awarded for any duration up to 27 February 2003 to financial institutions with a substantial debt team in Singapore. To recognise the range of capabilities and commitments pledged by the ABI, varying tenures of up to 4 years in duration, will be awarded to the ABIs.

1 For details on other applicable conditions, please refer to MAS Circular FPD Circ 02/1999 "Tax Incentives To Promote the Bond Market" dated 26 April 1999.

Last Modified on 26/11/2016