Crowdfunding for Small and Medium Enterprises
In June 2016, MAS published its responses to the feedback received from a public consultation on facilitating securities-based crowdfunding (SCF). MAS' responses seek to help start-ups, and small and medium enterprises access alternative methods of raising funds through SCF, while ensuring that there are sufficient safeguards for investors.

Amendments to the Singapore Code on Takeovers and Mergers
In February 2016, on the advice of the Securities Industry Council (SIC), MAS revised the Singapore Code on Take-overs and Mergers to keep pace with market developments and evolving international practices. The key amendments included providing greater clarity on the applicable procedures and timelines for competing offers and the conduct of a company's board of directors when faced with an offer. SIC will continue to review take-over rules and practices to ensure the regime is in line with international best practices.

Market Structure and Practices
The minimum trading price requirement of 20 cents for Mainboard listed issuers was introduced on 1 March 2015. The Singapore Exchange (SGX) continued to work closely with affected Mainboard companies to explore options to meet the minimum trading price of 20 cents. The objective of the requirement is to improve the overall quality of the securities market and address risks of low-priced securities being more susceptible to excessive speculation and potential market manipulation.

Other securities market initiatives, which were extensively consulted in 2014, will be introduced in phases, with intervals of at least six to 12 months between major initiatives. Short position reporting will be introduced in 2017, followed by collateralised trading in 2018. This will provide market participants with adequate time to adjust to the changes, and also allow MAS and SGX to work closely with the industry to educate the investing public of the upcoming initiatives.

MAS has completed a review of the self-regulatory roles performed by exchanges. Starting from 2016, MAS will be primarily responsible for supervision and inspection of exchange members' compliance with statutory requirements. Exchanges will continue to supervise their members for risk management and operational requirements. This arrangement will lead to greater supervisory efficiency and effective oversight of risks posed by intermediaries.

MAS will also enhance our surveillance capabilities to monitor trading activities within and across exchanges to detect potential misconduct and market abuse. The new surveillance capabilities will facilitate early detection of misconduct, and support more expedient investigations and tough enforcement actions.

As the sole securities exchange operator, SGX will retain its role as listing authority. This role has been enhanced with the 15 September 2015 establishment of the SGX Listings Advisory Committee, Listings Disciplinary Committee and Listings Appeals Committee to strengthen the listing policymaking and review process, and enhance how Listing Rules are enforced.

Over-The-Counter Derivatives Reforms
MAS remains fully committed to meeting the Group of 20/FSB over-the-counter (OTC) derivative reforms. We have made good progress in implementing the reforms in Singapore.

MAS expects to complete the mandatory trade reporting requirement by 1H 2017. Following the commencement of the reporting regime for interest rate and credit derivatives contracts in 2014, banks started the mandatory reporting of foreign exchange (FX) derivatives in May 2015. In January 2016, MAS consulted on proposals to implement the reporting of the remaining asset classes, namely commodity and equity derivatives contracts. The consultation also included proposed revisions to fine-tune the reporting obligations for certain non-bank financial institutions, while maintaining effective data coverage of OTC derivative activities in Singapore.

MAS issued a public consultation in June 2015 setting out proposed requirements for the regulation of OTC derivative intermediaries. In July 2015, MAS also consulted on mandatory clearing requirements for OTC derivatives. The consultation proposed to start the clearing mandate with SGD and USD interest rate swaps, as these are the most widely traded interest rate derivatives in Singapore. Proposals to implement margin requirements for non-centrally cleared OTC derivatives followed in October 2015. Margin requirements would complement MAS' mandatory clearing requirements for OTC derivatives to better manage potential systemic risks posed by the OTC derivatives sector.

MAS has also focused on ensuring that the financial market infrastructure is in place to support the OTC derivatives reforms. To ensure that clearing infrastructures are in place for mandatory clearing, central counterparties (CCPs) in Singapore have gained the requisite recognition from both EU and US authorities. In addition to the Singapore Exchange Derivatives Clearing Limited (SGX-DC) being registered with the US Commodities Futures Trading Commission as a Derivatives Clearing Organisation since December 2013, SGX-DC and ICE Clear Singapore were also recognised by the European Securities and Markets Authority as eligible third-country CCPs in 2015. In Singapore, MAS recognised CCPs from the UK (LCH. Clearnet Limited) and US (Chicago Mercantile Exchange Inc.) as Recognised Clearing Houses in February 2016 and May 2016 respectively. MAS expects to recognise more CCPs, which will strengthen accessibility to clearing infrastructure from Singapore.

MAS continues to review other aspects of our OTC derivatives regulatory regime, including conducting an in-depth study on the conditions that would be appropriate for a trading mandate to be implemented in Singapore.

Financial Market Infrastructure
MAS issued the Notice on Financial Market Infrastructure (FMI) Standards in August 2015, setting out the principles in the Committee on Payments and Market Infrastructures (CPMI)-International Organisation of Securities Commissions (IOSCO) Principles for Financial Market Infrastructures (PFMI) for which licensed trade repositories and approved clearing houses regulated by MAS are required to comply.

With the transfer of provisions governing the Central Depository System (CDS) from the Companies Act to the Securities and Futures Act (SFA), MAS issued the Notice on FMI Standards for Central Securities Depositories which sets out the PFMI standards for CDS in June 2016.

Supervisory Action
On 24 June 2015, MAS reprimanded SGX for lapses related to SGX's market outages on 5 November 2014 and 3 December 2014. MAS also directed SGX to improve its recovery capabilities and processes, including:

  • Strengthening its monitoring system capabilities to allow timely and accurate problem identification when incidents occur;
  • Strengthening its business continuity management and disaster recovery procedures to improve crisis preparedness; and
  • Improving its crisis communications processes to provide prompt information to all stakeholders.

MAS is reviewing SGX's implementation of the remedial measures, which have been verified by an independent expert. Until MAS is satisfied with the completion of these measures, SGX will not increase fees for the securities and derivatives markets. SGX also contributed S$1 million to its Investor Education Fund.

Review of Regulatory Safeguards for Investors
To enhance regulatory safeguards for investors investing in capital markets products, MAS announced in September 2015 that we will proceed with proposals to:

  • Extend capital market regulatory safeguards to investors in certain non-conventional investment products that are in substance capital raising products; and
  • Give investors who meet certain wealth thresholds the choice whether to be treated as an accredited investor with the consequent reduction of regulatory safeguards.

MAS is finalising the legislative amendments to implement these proposals, following a public consultation and further engagement with key stakeholders, for tabling in Parliament in 2H 2016.