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 (Overs ight) Act 2006 32
 
Box 6

MARKET MANIPULATION
Structured warrants are a popular financial product with market participants. Trading volume on the SGX rose to around 52 billion units in SGX's FY2006, a jump of 169% from FY2005. The buoyant market in structured warrants has attracted those who seek financial gain through illegal means.

In November 2006, MAS took civil penalty enforcement action against three trading representatives of a stock brokerage firm for rigging the share price of a company listed in Singapore. The three individuals first took a short position in the structured warrants of the company. They then deliberately depressed the company's share price, which resulted in a fall in the warrant price, allowing them to cover their short positions at a profit.

The three individuals paid S$210,000 in civil penalties to MAS, and had their representative licences suspended for one year. This case is a clear indicator of MAS’ vigilance against market abuse of the newer financial products.