Monetary Authority of Singapore Annual Report 2012/2013


Rates Review

In July 2012, MAS directed banks to comprehensively review their rate setting processes for the Singapore Interbank Offered Rate (SIBOR), Swap Offer Rate (SOR) and Non Deliverable Forward (NDF) foreign exchange contracts. This was in line with similar reviews conducted by regulatory authorities in other jurisdictions on key market interest rate benchmarks.

Following the conclusion of the review, MAS took supervisory actions against twenty banks for deficiencies in the governance, risk management, internal controls, and surveillance systems relating to their involvement in benchmark submissions. These actions include imposing additional statutory reserves, and directing banks to adopt measures to address their deficiencies and conduct an independent review to ensure the robustness of their remedial measures. Separately, MAS issued a consultation paper on a proposed regulatory framework for financial benchmarks. The proposed framework took into account relevant international developments on financial benchmarks, including the reviews conducted by the Bank of International Settlements (BIS) and International Organisation of Securities Commissions (IOSCO).

The Association of Banks in Singapore (ABS) and the Singapore Foreign Exchange Markets Committee (SFEMC) had also submitted their recommendation to MAS on measures to strengthen the governance and design of benchmark rates setting processes in Singapore for SIBOR, SOR, and NDF foreign exchange contracts. Changes to the ABS benchmark rate setting processes will be rolled out progressively over the course of H2 2013.