Key Supervisory and Regulatory Initiatives INSPECTIONS AND SUPERVISORY REVIEWS To support MAS’ supervisory objectives, MAS actively inspects and continuously monitors regulated entities. Under MAS’ risk-focused supervisory framework, financial institutions are grouped into supervisory categories according to their risk and impact profiles. Supervision plans and inspection cycles are worked out based on these profiles. Financial institutions that pose greater risk and impact are allocated more supervisory attention. In addition to ongoing institution-specific inspections, MAS also conducts thematic inspections to assess specific risks in the financial system. These cover a wide range of prudential, market conduct and risk management areas. If a regulated financial institution has not met our standards, MAS will issue recommendations to address the shortfalls. In addition, we have a wide range of supervisory responses which can be adopted where necessary, depending on the nature and seriousness of the matter. These responses may include enhanced regulatory reporting, requirements to undertake special audit reviews, additional control measures, potential restrictions on new businesses, formal warnings or reprimands, formal issue of directions or imposition of a composition fine. Our approach is to reinforce the responsibility of the board and management of financial institutions to deal fairly with customers, ensure compliance with regulatory standards and maintain adequate risk oversight of its business activities. While MAS takes disciplinary action against a handful of regulated entities each year, we are generally satisfied with the standards of compliance and risk management among regulated entities in the financial sector.