Monetary Authority of Singapore Annual Report 2012/2013
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Amendments to the Monetary Authority of Singapore Act

MAS embarked on a review of its regulatory framework for financial institutions, with a view to strengthening the framework for financial stability and ensuring robust protection of depositors, insurance policy holders and consumers of financial services. As part of the review, MAS took into account the Financial Stability Board’s principles on “Key Attributes of Effective Resolution Regimes for Financial Institutions” where relevant to Singapore. The Monetary Authority of Singapore Act (MAS Act) was then amended to enhance and expand MAS’ suite of powers for resolving distressed financial institutions. The amendments also strengthen the current framework for the issuance of MAS book-entry securities and regulation of primary dealers.

Enhanced regulatory framework for resolution of financial institutions

The Monetary Authority of Singapore (Amendment) Bill 2013 (the Bill), seeks to vest MAS with a broader range of regulatory options in dealing with failed financial institutions. The Bill extends resolution powers of MAS which previously exists only for banks and insurance companies, to over a wider range of financial institutions, including finance companies, merchant banks, operators and settlement institutions of designated payment systems, approved exchanges, and designated financial holding companies. These additional resolution powers mean that:

  1. MAS will be able to issue directions to a non-regulated entity that is incorporated or established in Singapore, where the entity belongs to a group of companies of which a financial institution regulated by MAS is part of and is significant to the business of such a group;
  2. MAS may apply to the Court to claw back the salary, remuneration or benefits given to a director or executive officer under certain circumstances, for example, when the director or executive officer has failed to discharge his or her duties; and
  3. MAS may share information with a foreign resolution authority if the information is necessary in the resolution of a financial institution.

Framework for issuing MAS book-entry securities and regulating primary dealers

The framework for the issuance of book-entry securities by MAS and the appointment of primary dealers enables MAS to issue securities in its name, and to purchase, repurchase, sell and redeem these securities as appropriate. These amendments serve to strengthen the legal and regulatory framework for MAS’ monetary policy operations and the market for MAS book-entry securities.

The Bill was passed in Parliament in March 2013, and became effective in April 2013.

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