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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
 
  Enhancing Regulatory Frameworks 45
 
Regulations for Islamic Finance  
45
 
Revision to Requirements on Submission of  
Annual Audited Accounts  
45
 
Revision to Regulatory Framework for Money
 
Changers/Remittance Agents  
46
 
Box 9 – Policy Owners’ Protection Fund Scheme  
46
 
Phase II Amendments to the Securities
 
Futures Act and Financial Advisors Act  
47
 
Keeping Pace with Product Innovation  
49
 
Reviewing the Authorisation Framework for Representatives  
49
 
Establishing Sound Risk Management Guidelines  
49
 
Box 10 – Enhancing Internet Banking Security  
50
 
  ENHANCING REGULATORY FRAMEWORKS

Establishing Sound Risk Management Guidelines
 

As part of our effort to further strengthen the risk management practices of financial institutions in Singapore, MAS issued a set of guidelines on sound risk management practices in February 2006. The guidelines emphasise four key pillars of effective risk management:

The role of a financial institution’s board of directors in its oversight of risk management policies and their implementation.
The role of senior management in ensuring that sound policies, effective procedures and robust systems are in place.
The presence of sound risk management processes and operating procedures that integrate prudent risk limits with appropriate risk measurement, monitoring and reporting.
The presence of competent personnel in the risk management, control and audit functions.

These guidelines, together with our earlier guidance on Internet Banking Technology Risk Management, Business Continuity Management and Outsourcing, serve as a useful guide to financial institutions seeking to enhance their risk management practices. While the guidelines can be broadly applied, they are not intended to be exhaustive nor do they prescribe a uniform set of risk management standards for all financial institutions, especially given the diverse players and wide-ranging activities in Singapore’s financial sector.

Financial institutions should implement an appropriate risk management framework based on the four key pillars, taking into account the nature, size and complexity of their operations. They should regularly review their existing practices, identify areas for improvement, and implement the recommended practices where appropriate.

MAS will update the guidelines as industry standards and practices evolve, and as risk issues emerge. We will be issuing more industry-specific guidance, for example on the insurance industry, in the near future.