Key Supervisory and Regulatory Initiatives INSPECTIONS AND SUPERVISORY REVIEWS Inspection of SGX Member Firms 2004 marked the first full year since MAS assumed primary responsibility for inspecting SGX member firms, which were previously inspected by SGX. To maintain high standards of compliance and market conduct, we inspected all SGX members at least once. Our risk-based supervisory approach involves rigorous follow-up of inspection findings, regular communication with company management, and dialogues with external auditors. The inspections revealed that several member firms had incorrectly applied certain regulatory requirements pertaining to financial, capital or trust account requirements. Member firms with compliance and internal control weaknesses have agreed to address them, and we will be following up on the progress of each firm in addressing the various weaknesses identified. Our supervisory approach will also be tailored to allocate more resources to such member firms.