THE FINANCIAL SECTOR: KEY SUPERVISORY AND REGULATORY INITIATIVES       Content Page Supervision Regulation Risk-based Regulatory Regime Fine-Tuning Regulatory framework Ensuring Sound Market Conduct Innovative Systems for Efficient Payment and Settlement     SUPERVISION   . Enhancing Risk-focused Supervisory Approach . Box 1 – Fostering a Sound and Progressive Financial Services Sector . Enhancing MAS’ Supervisory Capabilities . Box 2 – Stress Testing of Life Insurers . Box 3 – Streamlining Inspection Function . Thematic Inspections to Improve Surveillance   Box 1 FOSTERING A SOUND AND PROGRESSIVE FINANCIAL SERVICES SECTOR   MAS’ Supervisory Mandate The supervisory mandate of MAS is to foster a sound and progressive financial sector. The desired outcomes of our supervision are:   • A stable financial system. • Safe and sound financial intermediaries. • Safe and efficient financial infrastructure. • Fair, efficient and transparent organised markets. • Transparent and fair-dealing intermediaries and offerors. • Well-informed and empowered consumers.   To achieve these outcomes, MAS performs various functions directly, such as regulation, authorisation, supervision, surveillance and enforcement.We also facilitate initiatives relating to corporate governance, market discipline, consumer education and consumer compensation. We are guided by 12 key principles when carrying out our supervisory work. These principles collectively characterise our supervisory approach as risk-focused, stakeholder-reliant, disclosure-based and business-friendly. The principles are:   • Emphasise risk-focused supervision rather than one-size-fits-all regulation. • Assess the adequacy of an institution’s risk management in the context of its risk and business profiles. • Allocate scarce supervisory resources according to impact and risks. • Ensure institutions are supervised on an integrated (across industry) and consolidated (across geography) basis. • Maintain high standards in financial supervision, including observing international standards and best practices. • Seek to reduce the risk of failure rather than prevent the failure of any institution. • Place principal responsibility for risk oversight on the institution’s board and management. • Leverage on relevant stakeholders, professionals, industry associations and other agencies. • Rely on timely, accurate and adequate disclosure by institutions rather than merit-based regulation of products to protect consumers. • Empower consumers to assess and assume for themselves the financial risks of their financial decisions. • Give due regard to competitiveness, business efficiency and innovation. • Adopt a consultative approach to regulate the industry.