MAS: Annual report 2006 / 2007
CONTENTS
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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.