CONTENTS
HOME
OUR WORK - Managing Risks, Sustaining Growth
A MORE CHALLENGING POLICY ENVIRONMENT
MONETARY POLICY - PROVIDING AN ANCHOR FOR PRICE STABILITY OVER THE MEDIUM-TERM
MANAGING THE CHALLENGES OF INCREASED GLOBAL FINANCIAL UNCERTAINTY
A SOUND AND PROGRESSIVE FINANCIAL CENTRE
CURRENCY
 
A SOUND AND PROGRESSIVE FINANCIAL CENTRE 28
 
Banking 28
 
Lower Paid-up Capital for Incorporated Wholesale Banks 28
 
Changes to Minimum Liquid Assets and Minimum Cash Balance Requirements (Amendments to MAS Notice 613) 29
 
Developments in Islamic Finance 29
 
Box Story 3 - Basel II Implementation in Singapore 30
 
Insurance 30
 
Enhanced Governance and Disclosure Framework for Participating Insurance Business (MAS 320) 30
 
Revision to Rules for Investment-Linked Products (MAS 307) 31
 
Follow Up on Framework for Insurance-Linked Securities 31
 
Capital Markets 31
 
A More Globalised and Sophisticated Equity Market 31
 
Size of Debt Market 32
 
Assets Under Management 32
 
Strong Treasury Market 33
 
Proposed Legislative Amendments to Securities and Futures Act and Financial Advisers Act 33
 
Amendments to the Singapore Code on Take-overs and Mergers 34
 
Box Story 4 - Guidelines on Fair Dealing -Board and Senior Management Responsibility for Delivering Fair Dealing Outcomes to Consumers 35
 
Thematic Approach to Market Conduct Supervision 35
 
Enhancing Market Discipline 36
 
Box Story 5 - Singapore: The Premier International Real Estate Financing Centre 36
 
REITS 37
 
Revised Property Fund Guidelines 37
 
Licensing Framework for REIT Managers 37
 
Extension of the Singapore Code on Take-overs and Mergers to REITs 37
 
Regulatory Oversight of Commodity Futures 38
 

Developments in Islamic Finance

Islamic finance has grown significantly in recent years and has become an integral component of the international financial system. Singapore's financial industry has similarly seen increased investor interest for Shariah-compliant financial products and services, especially after the establishment of its first Islamic bank - Islamic Bank of Asia. More fund managers are also offering Shariah-compliant funds. In May 2008, the first Shariah-compliant exchange-traded fund was launched on the Singapore Exchange. MAS sees Islamic financial services as part of the broad range of financial service capabilities that Singapore as an international financial centre should provide.

MAS' regulatory approach is to accommodate Islamic banking products within the existing conventional regulatory framework, and to level the playing field by ensuring the neutrality of MAS' rules where Islamic financing is similiar to conventional financing in economic substance and risks. Where there are specific risks or impediments, MAS will refine rules to address these specific areas.

On taxes, Singapore had removed the imposition of double stamp duties in Islamic transactions involving real estate and accorded the same concessionary tax treatment on income from Islamic bonds. Exemptions from income tax were also granted on amounts payable to investors from Islamic Bonds which are Qualifying Debt Securities. In February 2008, the Finance Minister announced the introduction of a 5% concessionary tax rate for qualifying Shariah-compliant financial activities such as in lending, fund management takaful and retakaful.

To further promote the growth of Islamic finance and to meet the needs of financial institutions conducting Shariah-compliant activities in Singapore, MAS announced in May 2008 that it will develop a facility to make available sovereign-rated sukuks. The design of the sukuk issuance facility reflects our efforts to tap the strengths of conventional finance, while adhering carefully to Shariah principles.

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