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OUR MISSION
OUR OBJECTIVES
 
Supervision
Inspections and
Supervisory Reviews
New Legislation
Enhancing Regulatory Frameworks
Market and Business Conduct
Risk Management
B THE FINANCIAL SECTOR: KEY SUPERVISORY
AND REGULATORY INITIATIVES
 
  New Legislation 41
 
Strengthening Corporate Governance Regulations
 
& Guidelines  
41
 
 
Box 5 – Enhancing Corporate Governance Framework  
41
 
Box 6 – Deposit Insurance Scheme  
42
 
Box 7 – Nomination of Beneficiaries Framework  
43
 
Box 8 – New Framework for Trust Companies
 
to Facilitate Wealth Management  
44
 
  NEW LEGISLATION

Box 5 Enhancing Corporate Governance Framework

Corporate Governance Regulations and Guidelines for Banks and Direct Insurers
 

MAS issued Corporate Governance Regulations on corporate governance to locally incorporated banks, financial holding companies and significant insurers (ie direct life insurers with total fund asset size of at least S$5 billion) on 8 September 2005. Together with these regulations, MAS also issued Guidelines on Corporate Governance to all locally-incorporated banks and financial holding companies as well as all direct insurers. The issuance of the Corporate Governance Regulations and Guidelines reflect MAS’ ongoing commitment to promote sound corporate governance practices in Singapore’s banking and insurance sectors, and to align them with global best practices.

The Banking (Corporate Governance) Regulations and the Insurance (Corporate Governance) Regulations, which are mandatory, form the minimum corporate governance standards required of financial institutions. The Regulations include requirements on the:

Composition of the Board of Directors and Board committees in relation to independence from substantial shareholders, management and business relationships.
Establishment, composition and responsibilities of various Board committees.
Separation of roles for the Chairman of the Board and Chief Executive Officer.

Banks and significant insurers are given until their respective annual general meetings in 2007 to comply with the Regulations.

The Guidelines on Corporate Governance are adopted from the Code of Corporate Governance issued by the Council of Corporate Disclosure and Governance. They are best practice guidelines on the roles and responsibilities of board and management, risk management and internal controls. Banks and direct insurers have been strongly encouraged to adopt the Guidelines, which will also take effect from the institutions’ annual general meetings in 2007.

 

  Corporate Governance Regulations for Approved Exchanges, Designated Clearing Houses and
Approved Holding Companies
 

On 29 November 2005, the Securities and Futures (Corporate Governance of Approved Exchanges, Designated Clearing Houses and Approved Holding Companies) Regulations were issued. The Regulations, modeled on the Corporate Governance Regulations for banks and significant insurers, will apply to the SGX group of companies. The main difference between the two sets of Regulations is the need to take into account SGX’s distinctive regulatory role over its members. The definition of director independence has therefore been widened to include independence from members in addition to independence from business and management relationships. SGX has been given until its Annual General Meeting (AGM) in 2007 to comply with the Regulations.