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 3 STREAMLINING INSPECTION FUNCTION   In the capital markets, both MAS and the Singapore Exchange (SGX) have inspection power over SGX members. With effect from 1 July 2003, MAS assumed the primary responsibility for the on-site inspections of SGX members for their compliance with rules and regulations under the securities legislation. SGX remains responsible for the members’ compliance with membership rules and requirements. The streamlining of the inspection function is part of our continuing efforts to improve the efficiency of regulation in Singapore.