Types and Number of Institutions

Banks and Finance Companies

Commercial banks in Singapore are licensed under and governed by the Banking Act. They may undertake universal banking.  Besides commercial banking, which includes deposit taking, the provision of cheque services and lending, the banks may also carry on any other business which is regulated or authorised by MAS, including financial advisory services, insurance broking and capital market services. (Section 30 of the Banking Act defines the permissible activities). Commercial banks and their representatives do not have to be separately licensed to carry out such activities, but must comply with the business conduct requirements prescribed in the Financial Advisers Act (FAA), Insurance Act (IA) and Securities and Futures Act (SFA) accordingly.
 
In July 2001, the Banking Act was amended to prohibit banks from engaging in non-financial activities. Banks were given three years, until July 2004, to complete divesture of their non-financial businesses. In August 2003, the grace period was extended by two years to July 2006, for banks which have applied to the MAS for extension.
 
For the latest number of commercial banks in Singapore, please refer to this link to the Financial Institutions Directory.
 
Commercial banks operate as full banks, wholesale banks or offshore banks.

Full Banks

Full banks may provide the whole range of banking business approved under the Banking Act.
 
There are currently 30 full banks in Singapore.  Six of them are locally-incorporated entities under the three local banking groups, and one is a locally incorporated subsidiary of a foreign bank.  The remaining 23 banks are branches of foreign-incorporated banks.  Seven of the foreign banks operating in Singapore have been awarded Qualifying Full Bank (QFB) privileges.
 
Foreign full banks with QFB privileges may operate a total of 25 locations.  They may also share ATMs among themselves, and relocate their sub-branches freely.  QFB are allowed to negotiate with the local banks on a commercial basis to let their credit card holders obtain cash advances through the local bank's ATM networks.  QFBs may provide debit services through an EFTPOS network, offer Supplementary Retirement Scheme and CPF Investment Scheme accounts, and accept fixed deposits under the  CPF Investment Scheme and Minimum Sum Scheme.

Wholesale Banks

Wholesale banks¹ may engage in the same range of banking business as full banks, except that they do not carry out Singapore Dollar retail banking activities. They operate within the Guidelines for Operations of Wholesale Banks issued by MAS.

All wholesale banks in Singapore, operate as branches of foreign banks.  For the latest number of wholesale banks in Singapore, please refer to this link to the Financial Institutions Directory.

Offshore Banks

Offshore banks can engage in the same activities as full and wholesale banks for businesses transacted through their Asian Currency Units (ACUs). The ACU is an accounting unit, which the banks use to book all their foreign currency transactions conducted in the Asian Dollar Market (ADM). The banks' Singapore dollar transactions are separately booked in the Domestic Banking Unit (DBU). For further information on these two accounting units of banks in Singapore, please refer to Asian Currency and Domestic Banking Units.

The scope of business transacted in offshore banks' DBU has slightly more restrictions on dealings with residents as compared with wholesale banks¹. Offshore banks operate within the Guidelines for Offshore Banks issued by MAS.

Under the banking liberalisation programme, offshore banks were given greater flexibility in Singapore dollar wholesale business. Offshore banks had their Singapore dollar lending limit raised to S$500 million. They are now allowed to engage in Singapore dollar swaps in respect of proceeds arising from the issue of Singapore dollar bonds managed or arranged by them.

All offshore banks in Singapore, operate as branches of foreign banks. Please refer to the Financial Institutions Directory for the latest statistics on them.

Merchant Banks

Besides the three categories of commercial banks, financial institutions may also operate as merchant banks. Merchant banks are approved under the Monetary Authority of Singapore Act and their operations are governed by the Merchant Bank Directives. Their ACU operations are also subject to the Banking Act.
 
The typical activities of merchant banks include corporate finance, underwriting of share and bond issues, mergers and acquisitions, portfolio investment management, management consultancy and other fee-based activities. Most merchant banks have, with MAS' approval, established ACUs, through which they compete with commercial banks in the Asian Dollar Market. In their DBU, merchant banks may not accept deposits or borrow from the public. However they may accept deposits or borrow from banks, finance companies, shareholders and companies controlled by their shareholders.  Please refer to the  Financial Institutions Directory  for the latest number of merchant banks in Singapore.

Finance Companies

Finance companies focus on providing small-scale financing, including instalment credit for motor vehicles and consumer durables, and mortgage loans for housing. Finance companies may not offer deposit accounts which is repayable on demand by cheque, draft or order. They are licensed under and governed by the  Finance Companies Act.

Generally, finance companies are not allowed to grant unsecured credit facilities exceeding S$5,000 to any person or deal in any foreign currency, gold or other precious metals or acquire foreign currency denominated stocks, shares or debt securities.  They may however apply to MAS for exemption to expand their scope of activities if they have the risk management capability.  Finance companies with capital funds of more than S$100 million may apply for exemption to deal in foreign currencies or precious metals and foreign currency -denominated stocks, shares or debt securities. The exemption is conditional on the aggregate amount of foreign currency exposure not exceeding 10 per cent of the finance company's capital funds at any time.

There are 3 finance companies in Singapore.

Insurance Companies

Insurers may conduct insurance activities in Singapore as registered insurers, authorised reinsurers or foreign insurers.

Registered insurers are approved under Section 8 of the Insurance Act (Cap 142) (“the Act”) to conduct life and/or general insurance business in Singapore. They can be registered as direct insurers, reinsurers or captive insurers.

In addition to the registered insurers, reinsurers without an operating presence in Singapore can conduct reinsurance business in Singapore as authorised reinsurers under Section 8A of the Act. Such reinsurers may be authorised as general insurers and/or life reinsurers.

Foreign insurers are approved under the law of another country or territory to carry on insurance business in that country or territory. These insurers operate in Singapore under a foreign insurer scheme established under Part IIA of the Act. Currently the Lloyd’s Asia scheme is the only foreign insurer scheme in Singapore.

For the latest listing of insurers in Singapore, please refer to the Financial Institutions Directory.

Registered Insurers

Direct Insurers

Direct life insurers are insurers that are registered to write life policies as well as long and short-term accident and health policies.

Direct general insurers are insurers that are registered to write all insurance business other than insurance business concerned with life policies and/or long-term accident and health policies. Direct general insurers would include the specialist insurers such as marine mutuals that specialise in protection & indemnity and other marine insurance policies as well as insurers specialising in credit and political risk insurance and financial guarantee insurance.

Insurers that are registered to conduct both life and general insurance businesses are known as composite insurers.

Reinsurers 

Reinsurers can be registered in Singapore to carry out life reinsurance and/or general reinsurance business in Singapore. They are not permitted to write direct business and are only allowed to assume all or a part of the insurance or reinsurance risk written by another insurer.

Captive insurers

A captive insurer is registered to insure the risks of its parent and related companies as defined under section 6 of the Companies Act (Chapter 50).

Authorised Reinsurers

An overseas reinsurer may apply for authorisation in respect of life and/or general reinsurance business. Once authorised, they are allowed to solicit business and collect premiums from insurers in Singapore.

Lloyd’s Asia Scheme

The Lloyd’s Asia Scheme is a foreign insurer scheme established under Part IIA of the Act. This scheme seeks to replicate in Singapore the Lloyd’s of London insurance marketplace. Lloyd’s members may carry on insurance business in Singapore through locally-incorporated service companies, which are registered with the Administrator of the scheme. Lloyd’s of London (Asia) Pte Ltd is the approved Administrator of the scheme.

Capital Markets Intermediaries

Capital markets intermediaries are licensed and regulated under the Securities and Futures Act. They may provide the whole range of capital markets services as specified in the 2nd schedule of the Securities and Futures Act with the appropriate Capital Markets Services licence. Currently, these services or regulated activities include dealing in securities; trading in futures contracts; leveraged foreign exchange trading; advising on corporate finance; fund management; securities financing; and providing custodial services for securities.

Individuals who are employed by the capital markets intermediaries to carry out such regulated activities are required to hold a representative’s licence under the Securities and Futures Act.

For the latest number of capital markets intermediaries in Singapore, please refer to this link to the Financial Institutions Directory.

Financial Advisers

Financial advisers are licensed and regulated under the Financial Advisers Act. They may provide the whole range of financial advisory services as specified in the 2nd schedule of the Financial Advisers Act with the appropriate Financial Advisers licence. Currently, these services include advising others on investment products, issuance of research reports covering investment products, marketing of any collective investment schemes, as well as arranging life policies for others.

Individuals who are employed by the financial advisers to carry out such services are required to hold a representative’s licence under the Financial Advisers Act.

For the latest number of financial advisers in Singapore, please refer to this link to the Financial Institutions Directory.

Insurance Brokers

Insurance brokers are registered under the Insurance Act. They may carry on insurance business in Singapore as an agent of insureds or intending insureds in respect of insurance policies relating to general business and long-term accident and health policies, as well as reinsurance of liabilities under insurance policies relating to life business and general business.

For the latest number of insurance brokers in Singapore, please refer to this link to the Financial Institutions Directory.

Trust Companies

Trust companies carrying out trust services are licensed under the Trust Companies Act. They may provide the whole range of trust services as specified in the 1st schedule of the Trust Companies Act with the appropriate trust business licence. Currently, these services include the provision of services for creation of an express trust, acting as trustee of an express trust, arranging for any person to act as a trustee of an express trust and the provision of trust administration services in relation to an express trust.

For the latest number of companies holding trust business licence in Singapore, please refer to this link to the Financial Institutions Directory.

Money-Changing And Remittance Businesses

Money-changing and remittance businesses are licensed under the Money-Changing and Remittance Businesses Act. MAS supervises the money-changing and remittance licensees primarily for anti-money laundering and countering the financing of terrorism purposes.

Money-changing may be conducted under a sole proprietorship, partnership or company.  Money-changing licensees have to display the exchange rates they are offering to customers at their business premises. The money-changing licensees are expected to put in place an appropriate system to monitor and report suspicious transactions and are required to obtain relevant identification documents of the customer for transaction amounts of S$5,000 and above.

The holder of a remittance licence has to be incorporated as a company with a minimum capital of S$100,000 and furnish a security deposit of S$100,000 in respect of its place of business. With the different remittance channels including banks, offering remittance services, customers are expected to exercise discretion in choosing their remittance channel for the transmission of funds overseas.  Besides putting in place an effective system to monitor and report suspicious transactions, the remittance licensees are required to obtain relevant identification documents of the customer for every remittance transaction.
 
For the number of licensed money-changers and remittance companies in Singapore, please refer to this link to the Financial Institutions Directory.

Footnotes:

¹ Wholesale banks were previously called "restricted banks", a category of licence introduced in 1971 to accommodate the admission of more banks into Singapore. They were renamed in 2001 to better reflect the range of activities permitted by this type of licence.