MAS: Annual report 2006 / 2007
	CONTENTS HOME   ENTERPRISE: Our Role BUILDING ON A ROBUST MACROECONOMIC ENVIRONMENT DEVELOPMENTS IN THE SINGAPORE SECURITIES MARKET FOSTERING A SOUND & REPUTABLE FINANCIAL CENTRE RISK MANAGEMENT & INFRASTRUCTURE GROWING SINGAPORE AS AN INTERNATIONALLY COMPETITIVE FINANCIAL CENTRE CURRENCY ORGANISATIONAL INITIATIVES		FOSTERING A SOUND & REPUTABLE FINANCIAL CENTRE 25 Changes to Capital Requirements for Singapore-incorporated Banks 25 Enhancing MAS’ Role in Bank Resolution 25 Changes to Rules on Unsecured Credit 25 Shift Towards Large Exposures Regime 26 Introduction of Asset Maintenance for Foreign Banks 26 Box 3 - An Update On Basel II Implementation In Singapore 26 Legislative Amendments to Securities and Futures Act and Financial Advisers Act 27 Box 4 - Monograph On Supervisory Framework For Financial Institutions 27 T rust Companies 28 Self-assessment Initiative 28 Anti-Money Laundering & Countering the Financing of Terrorism 28 Building Confidence in E-payments and Internet Banking Systems 28 Insurance Securitisation 29 Nomination of Beneficiaries to Insurance Policies 29 Policy Owners’ Protection Fund 29 Box 5 - Supervision Of New Initiatives in the     Singapore Capital Markets - Jade And AsiaClear 30 Mortgage Insurance 30 Thematic Approach to Market Conduct Supervision 30 Box 6 - Market Manipulation 31 Mystery Shopping on Practices in the Financial Advisory Industry 31 Review on Switching of Investment Products 31 Enhancing Market Discipline 31 Corporate Governance of Listed Companies 32 Amendment to Code on Collective Investment Schemes 32 Implementation of Payment Systems (Oversight) Act 2006 32   Anti-Money Laundering & Countering the Financing of Terrorism MAS continues to contribute to the development and dissemination of global regulatory standards on market integrity. We are fully committed to AML and countering the financing of terrorism (CFT) measures taken by the Financial Action Task Force (FATF) and its associated body, the Asia-Pacific Group on Money Laundering (APG). As a member of FATF, MAS works with international regulatory bodies in setting high standards against money laundering and terrorism financing. MAS revised the AML/CFT Notices to keep them in line with the latest standards developed by the FATF. In revising the Notices, MAS worked closely with the industry and conducted two rounds of public consultations. The revised Notices, which came into effect in March and April 2007 for the different financial sectors, incorporated a number of key changes such as a more rigorous set of Customer Due Diligence (CDD) measures. They also introduced an element of risk sensitivity in CDD, requiring enhanced due diligence measures for higher -risk customers such as politically exposed persons, and allowing simplified due diligence in very low risk situations. The Notices also operationalised FATF's Special Recommendation on cross-border wire transfers and imposed legally binding obligations on the respective financial sectors. In line with our risk-based supervision, AML/CFT inspections were conducted as part of regular inspections of the financial institutions to ensure the adequacy of their AML/CFT policies, procedures and controls as well as their compliance with MAS’ regulations. Between April 2006 and March 2007, MAS conducted AML/CFT inspections of 26 banks and merchant banks, three insurance companies, 32 capital markets licencees, 15 exempt fund managers and 10 money changers and remittance agents. We are continuing such inspections as part of our ongoing supervision.