within a riskier environment Benchmarked
our system of financial regulation and supervision
against best practices by completing the IMF/World
Bank's Financial Sector Assessment Programme.
The study concluded that the financial sector is
generally robust with few short-term vulnerabilities.
Enhanced our risk-based supervision methodologies
and capabilities by modifying and updating specific
supervisory practices. Notably, we completed the
grouping of all banks by risk and impact profiles
and allocated supervisory resources accordingly.
To enhance banking supervision as well as financial
system surveillance, we revised regulatory returns
from banks and merchant banks.
Improved efficiency of securities regulation by
assuming primary responsibility for inspecting SGX
We revised the capital adequacy requirements for
Singapore-incorporated banks under the current Capital
To implement recommendations on offers of investments
made by the Company Legislation and Regulatory Framework
Committee (CLRFC) and improve consistency between
the SFA and FAA, the two Acts were amended in phase
one of the planned two-phase amendments.
Strengthened the scope of inspections by conducting
thematic inspections to assess specific risks.
Improved the efficiency of payment
infrastructures by including the
Singapore Dollar in the Continuous
Linked Settlement system and
implementing the Cheque
Enhanced regulatory transparency
by consolidating credit and charge
card guidelines into a comprehensive
set of regulations.
To enhance our financial surveillance, we compiled
IMF recommended Financial Soundness Indicators (FSIs),
undertook studies to identify areas with stability
concerns and conducted stress testing of the financial
system. We also produced the first issue of the
Financial Stability Report (FSR), in line with the
practice of some major central banks.
To promote stability of the international financial
system, we participated in various international
fora such as the
Financial Stability Forum and the Committee on the
Global Financial System.
Tapped on industry expertise by formally adopting
a policy of consulting industry on regulatory changes.
From 1 April 2003 to 31 March 2004, we issued 19
public consultation papers.
To enhance risk management in financial institutions,
we consulted industry on comprehensive guidelines
for internal controls, management of credit and
market risks as well as outsourcing, and are finalising
them for issuance.
To maximise the effectiveness of supervision, work
is ongoing to further enhance frameworks for risk-focused
and integrated supervision of financial institutions.
We continue to work with Singapore-incorporated
banks to implement the New Basel Capital Framework.
In the insurance sector, we will be applying the
risk-based capital framework.
To strengthen our supervisory capabilities, we are
enhancing the indicators for monitoring banks¡¯
activities and risk profiles.
To enhance market conduct standards, we will develop
a risk-rating framework to dedicate more supervisory
resources to companies with higher risk of market
To keep our regulatory framework responsive and
conducive to developments in capital markets, and
to implement the remaining CLRFC recommendations,
we will complete phase two of the SFA and FAA amendments.
To add depth and vibrancy to Singapore;s capital
markets, we will introduce a new Business Trusts
Act to regulate business trusts as a new business
To ensure high standards of professionalism and
business conduct in the trust service industry,
we will establish a new regulatory framework for
trust companies, including a new Trust Companies
To promote safe and efficient payment systems in
Singapore, we will enact the Payment Systems Oversight
Act and implement a new generation Real Time Gross
Settlement system, MEPS+, in 2005.
To provide a comprehensive and regular assessment
of Singapore¡¯s financial stability,
we will prepare the FSR on a semi-annual basis.
We will also continue with regular stress testing,
studies and surveys of financial institutions on
various issues with stability implications.
We will continue to support international initiatives
on financial stability including compilation of
a consistent set of FSIs across countries (by IMF)
and survey on stress testing (by BIS).
To enhance corporate governance standards, we are
finalising the regulations and guidelines on corporate
governance for locally-incorporated banks and direct