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
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 2006 32
 
Review on Switching of Investment Products
In December 2006, MAS released the findings from our review of FAs’ controls to monitor improper switching of investment products. The review covered 23 FAs from the banking, insurance and capital market sectors. Overall, the review found that most FAs had implemented some controls to monitor improper switching within their own firms. Controls at the point of sale were generally more robust than controls to monitor switching after sale. The quality of control measures also varied across FAs. MAS issued the following reminders, that: (i) FAs ensure that disclosure on the costs and disadvantages associated with switching are clearly presented to clients in simple language; and (ii) FAs with sizeable operations put in place more robust after sale monitoring systems to identify unusual trends.