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
Trust 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 2 006 32
 
Box 3

AN UPDATE ON BASEL II IMPLEMENTATION IN SINGAPORE
MAS has been working closely with Singapore-incorporated banks to prepare for the implementation of Basel II in Singapore on 1 January 2008.

During the course of the year, MAS released three consultation papers as part of its Basel II–related rule making process to supplement the existing body of Basel II–related guidance so far issued. In addition, we participated in an industry working group formed to develop requirements for disclosure and regulatory reporting under Basel II. This initiative provided an opportunity for the industry to be closely involved in the early stages of policy formulation. MAS also conducted onsite supervisory visits to assess the banks’ readiness to adopt Basel II’s more sophisticated credit risk approaches. These reviews focused on the banks’ oversight and control frameworks, as well as their systems and processes. At a broader level, MAS will continue to assess the adequacy and effectiveness of the banks’ risk management practices as part of the supervisory review process under Basel II. Such reviews will also take into account the banks’ own internal assessment of their risks, risk management capabilities, and capital adequacy.

As both a home and a host supervisor, MAS actively supports initiatives within the supervisory community to improve communication and cooperation on Basel II implementation. MAS attended several supervisory colleges organised by foreign supervisors during the year. In our role as a home supervisor, MAS continued to engage host supervisors on the Basel II implementation progress of Singapore
-incorporated banks that operate in their markets. These efforts are aimed at addressing implementation challenges faced by banks with international operations an
d promoting efficient use of supervisory resources.