Supervisory Objectives and Principles

As the integrated supervisor of financial services in Singapore, MAS seeks to promote a sound and progressive financial services sector. Through its supervisory activities, it aims to achieve the following six supervisory objectives or desired outcomes:

• A stable financial system
• Safe and sound financial intermediaries
• Safe and efficient financial infrastructure
• Fair, efficient and transparent organized markets
• Transparent and fair-dealing intermediaries and offerors
• Well-informed and empowered consumers

Financial stability is the overarching objective of our financial supervision. Without it, participants will not transact in financial markets and use the services of financial institutions with confidence. To achieve a stable financial system requires the fulfilment of the other five objectives.

To achieve the above supervisory objectives, MAS performs various functions directly, such as regulation, authorisation, supervision, survelliance and enforcement. It also facilitates initiatives relating to corporate governance, market discipline, consumer education and consumer compensation.

MAS is guided by 12 key principles when carrying out its supervisory work. These principles collectively characterise MAS' supervisory approach as risk-focused, stakeholder-reliant, disclosure-based and business-friendly. These principles seek to:

• Emphasise risk-focused supervision rather than one-size-fits-all regulation.
• Assess the adequacy of an institution's risk management in the context of its risk and business profiles.
• Allocate supervisory resources according to impact and risks.
• Ensure institutions are supervised on an integrated (across industry) and consolidated (across geography) basis.
• Maintain high standards in financial supervision, including observing international standards and best practices.
• Reduce the risk of failure rather than prevent the failure of any institution.
• Place principal responsibility for risk oversight on the institution’s board and management.
• Work with relevant stakeholders, professionals, industry associations and other agencies.
• Rely on timely, accurate and adequate disclosure by institutions rather than merit-based regulation of products to protect consumers.
• Empower consumers to assess and assume for themselves the financial risks of their financial decisions.
• Give due regard to competitiveness, business efficiency and innovation.
• Adopt a consultative approach to regulate the industry.

Details of MAS' supervisory objectives and principles can be found in the monograph "Objectives and Principles of Financial Supervision in Singapore".