Review of Market Structure and Practices
In February 2014, MAS and Singapore Exchange (SGX) published a consultation paper on a review of the securities market structure and practices. The consultation paper follows an extensive review by MAS and SGX, and sets out broad policy proposals that are aimed at strengthening the securities market in Singapore. The review concluded that the securities market remains sound but identified three key areas for possible enhancements:

  • Promoting orderly trading and responsible investing;
  • Improving the transparency of market intervention measures; and
  • Strengthening the process for admitting new listings and enforcing against listing rule breaches

Key proposals in the consultation paper include:

  • Introducing a minimum trading price for issuers listed on the SGX Mainboard to address risks of high volatility generally associated with lowpriced securities, which in turn make them more susceptible to excessive speculation and potential market manipulation;
  • Requiring securities intermediaries to impose minimum collateral for securities trading based on customers' open positions;
  • Introducing short position reporting requirements to enhance transparency;
  • Requiring trading restrictions by securities intermediaries to be announced through the SGX website to ensure fair and transparent dissemination of such information; and
  • Strengthening SGX's process for admitting new listings and enforcing against listing rule breaches by setting up an independent Listings Advisory Committee, Listings Disciplinary Committee and Listings Appeals Committee.

MAS and SGX will consider carefully all feedback received during the 12-week consultation period, and will further engage key stakeholders and the public before we implement any of the proposals.

OTC Derivatives Reforms
MAS remains fully committed to meeting the G20 objective to strengthen regulation of over-thecounter (OTC) derivatives. In line with G20 and Financial Stability Board (FSB) recommendations to strengthen regulation of the global OTC derivatives markets, MAS has been implementing reforms in domestic OTC derivatives steadily over the past year.

The regulatory regimes for OTC derivatives clearing facilities and trade repositories commenced in August 2013. Following the introduction of the regulatory regime for trade repositories, DTCC Data Repository (Singapore) Pte Ltd (DDRS) set up the first local trade repository and was approved by MAS as a licensed trade repository in Singapore in November 2013. DDRS enables reporting of OTC derivative trades and is an important financial market infrastructure in enhancing transparency and regulatory oversight of the OTC derivatives market in Singapore.

The Securities and Futures Act (SFA) amendments to allow MAS to mandate central clearing came into effect in November 2012. MAS is currently drafting regulations on mandatory central clearing. In line with the G20's recommendation of implementing a trading mandate where appropriate, MAS is studying the implications of implementing a trading mandate in Singapore.

We participated actively in discussions at various international fora, such as the FSB, the International Organisation of Securities Commissions (IOSCO) and the Committee on Payment and Settlement Systems (CPSS). MAS also chairs the IOSCO Working Group on Risk Mitigation Standards for Non-Centrally Cleared Derivatives, which is developing standards on risk mitigation techniques for uncleared OTC derivative transactions.

At the bilateral level, MAS has continued to engage in constructive discussions with foreign regulators, such as the US Commodity Futures Trading Commission (CFTC), the European Commission (EC) and the European Securities and Markets Authority (ESMA), on substituted compliance or equivalence assessments of our OTC derivatives regulatory regime.

Singapore Exchange Derivatives Clearing Limited (SGX-DC) is the first Asian-based central clearing counterparty (CCP) to be registered by CFTC as a derivatives clearing organisation (DCO). With effect from 31 December 2013, SGX-DC, as a DCO, is able to clear swaps for US persons. In connection with the DCO registration, MAS signed a supervisory Memorandum of Understanding with CFTC in December 2013.

ESMA has also assessed and recommended to the EC that our clearing house and trade repository regulatory regimes are broadly equivalent to the European regime. MAS continues to engage the EC to finalise the outcome of the assessment.

MAS views these assessments as important measures to avoid the application of potentially duplicative or conflicting rules on entities with cross-border operations. Recognition of regulatory frameworks across jurisdictions through substituted compliance or equivalence assessments will enable entities to comply with the set of rules applied by the jurisdictions in which they operate, and avoid market fragmentation.

Electronic Lodgement of Prospectuses and Offers
MAS has enhanced the Offers and Prospectuses Electronic Repository and Access (OPERA) platform. Since January 2014, lodgements of prospectuses for offers of shares, debentures, and units in business trusts can be made electronically through OPERA. Physical attendance at MAS is no longer required. Electronic lodgement of applications for the authorisation or recognition of collective investment schemes (CIS) and their offer documents will be made available in the second half of 2014.

Enforcement Actions
2013 was an eventful year for MAS' enforcement efforts. We obtained a default judgment for S$100,000 against an individual for contravening the provision against false trading in Part XII of the SFA in October 2013. We also commenced two further court actions, seeking civil penalties of up to S$150,000 against two individuals for unauthorised trading and about S$2.5 million against another individual for insider trading.

Besides taking court action, MAS entered into settlement agreements with five separate individuals in 2013. These individuals admitted to contravening a range of provisions in Part XII of the SFA and paid a civil penalty of S$50,000 to S$150,000 without court action. One of these individuals, a director of a listed company, also undertook not to be a company director for a period of one year.

Separately, in November 2013, MAS successfully obtained an injunction on a bank account belonging to the former Chief Executive Officer (CEO) of a listed company in Singapore. The High Court allowed MAS' application to freeze US$3.7 million in the bank account, pending the outcome of on-going investigations into possible breaches of the SFA. This is MAS' first application for a freezing order on a bank account, pursuant to its powers under the SFA.

Between April 2013 and March 2014, MAS also published a total of 43 formal regulatory and enforcement actions against companies and individuals for market conduct breaches. These actions included reprimands, composition fines, civil penalties and prohibition orders. Over this period, MAS took other regulatory and administrative actions in another 159 cases.