MAS: Part IV - Powers, Duties and Functions Of Authority


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Part IV
Powers, Duties and Functions Of Authority

Powers, duties and functions of Authority

23. --(1) The Authority may, in addition to the powers, duties and functions transferred to it by virtue of section 21, exercise and discharge the following powers, duties and functions:

(a) accept deposits of money and pay interest on such deposits;

(b) issue demand drafts and other kinds of remittances made payable at its own office or the offices of agencies or correspondents;

(d) purchase, sell, discount and re-discount Treasury bills of the Government;

(e) purchase and sell securities of the Government or of any public authority which have been publicly offered for sale or form part of an issue which is being made to the public at the time of acquisition;

(f) purchase, sell, discount and re-discount bills of exchange and promissory notes arising out of bona fide commercial transactions bearing 2 or more good signatures and maturing within 3 months (exclusive of days of grace) from the date of acquisition;

(g) grant loans, advances or other credit facilities to such financial institutions or class of financial institutions as the Authority may, from time to time, approve for periods not exceeding 3 months (which may at the discretion of the Authority extend for a further period of 3 months) against -

(i) Treasury bills of the Government and securities of the Government;

(ii) gold coin or bullion;

(iii) such bills of exchange and promissory notes as are eligible for purchase, discount or re-discount by the Authority up to 75% of their nominal value;

(iv) warehouse warrants or their equivalent (securing possession of goods), in respect of goods duly insured and with a letter of hypothecation from the owner, except that no such advance shall exceed 60% of the current market value of the goods in question;

(h) invest in securities of the Government or of any public authority for any amount, and to mature at any time on behalf of staff and pension funds and other internal funds of the Authority;

(i) acquire, hold and sell shares of any corporation set up with the approval of, or under the authority of, the Government for the purpose of promoting the development of a money market or securities market in Singapore or for the financing of economic development in Singapore;

(j) purchase and sell currency, and purchase, sell, discount and re-discount bills of exchange and Treasury bills drawn in or on places outside Singapore;

(k) borrow money, establish credits and give guarantees in any currency, inside and outside Singapore, on such terms and conditions as the Authority may think fit;

(l) maintain accounts with central banks outside Singapore and with other banks inside and outside Singapore;

(m) purchase and sell securities of, or guaranteed by, such guarantor, governments or international financial institutions as may be approved by the board, or purchase and sell securities and investments authorised by the President on the recommendation of the board;

(n) act as correspondent, banker or agent for any central bank or other monetary authority and for any international bank or international monetary authority established under governmental auspices;

(o) open accounts for, and accept deposits from, the Government, public authorities, companies in which the Government or a public authority has a substantial interest, and companies which are deemed to be related to those companies by virtue of section 6 of the Companies Act (Cap. 50), banks and other credit institutions in Singapore;

(p) underwrite loans in which the Authority may invest;

(q) undertake the issue and management of securities issued by the Government or by any public authority; and

(r) do generally all such things as may be commonly done by bankers and are not inconsistent with the exercise of its powers or the discharge of its duties under this Act.

[31/72; 26/84]

(2) For the purposes of subsection (1) (o) and section 30 (d), the Government or a public authority shall have a substantial interest in a company if it, either by itself or together with any other public authority, has an interest or interests in one or more voting shares in the company and the nominal amount of that share, or the aggregate of nominal amounts of those shares either held by itself or together with any other public authority, is not less than 20% of the aggregate of the nominal amount of all the voting shares in the company.

[26/84]

Investment of funds

24. The funds of the Authority may be invested in all or any of the following:

(a) gold coin or bullion;

(b) notes, coins, money at call and deposits in such country or countries as may be approved by the board;

(d) securities of, or guaranteed by, such government or governments or international financial institutions as may be approved by the board;

(e) such securities and investments as may be authorised by the President on the recommendation of the board.

[26/84]

Authority as a banker to, and financial agent of, Government and manager of its external assets

25. --(1) The Authority shall act as a banker to, and a financial agent of, the Government.

(2) Whenever the Authority receives and disburses Government moneys, the Authority shall keep account thereof and may be paid an agency fee for its services.

(3) The Authority may act generally as agent for the Government on such terms and conditions as may be agreed between the Authority and the Government where the Authority can do so appropriately and consistently with the provisions of this Act and with its duties and functions as a monetary authority.

(4) The Authority shall, subject to the Financial Procedure Act (Cap. 109) and any other written law, manage the external assets of the Government.

Special loans to banks and financial institutions

26. The Authority may, if it thinks such action is necessary to safeguard monetary stability, make a loan or advance to a bank carrying on business under the Banking Act (Cap. 19) or to such financial institutions or class of financial institutions as the Authority may, from time to time, determine against such form of security as the Authority may consider sufficient.

[31/72; 26/84]

Power to issue directions to financial institutions

27. --(1) The Authority may, if it thinks it necessary in the public interest, request information from and make recommendations to such financial institutions as the Authority may, from time to time, determine and may issue directions for the purpose of securing that effect is given to any such request or recommendation.

[31/72; 26/84]

(2) Before issuing any direction under subsection (1), the financial institution or financial institutions concerned shall, unless the Authority in respect of any particular direction decides that it is not practicable or desirable, be given an opportunity to make representations with regard to the proposed direction within such time as the Authority shall specify.

[31/72]

(3) Upon receipt of any representations referred to in subsection (2), the Authority shall consider them and may -

(a) reject the representations; or

(b) amend or modify the proposed direction in accordance with the representations, or otherwise,

and in either event, the Authority shall thereupon issue a direction in writing to such financial institution or financial institutions, as the case may be, requiring that effect be given to the proposed direction or to the proposed direction as subsequently amended or modified by it within a reasonable time, and the financial institution or financial institutions, as the case may be, shall comply with that direction.

[31/72]

(4) Any financial institution that fails or refuses to comply with a direction given under this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000.

[31/72; 26/84]

Directions or regulations to discharge Government's international obligations

27A. --(1) The Authority may, from time to time :

(a) issue such directions to a financial institution or class of financial institutions; and
(b) make such regulations concerning any financial institution or class of financial institutions or relating to the activities of any financial institution or class of financial institutions,

as the Authority considers necessary in order to discharge or facilitate the discharge of any obligation binding on Singapore by virtue of a decision of the Security Council of the United Nations.

(2) A financial institution to which a direction is issued under subsection (1) (a) or which is bound by any regulations made under subsection (1) (b) shall comply with the direction or regulations notwithstanding any other duty imposed on the financial institution by any rule of law, written law or contract.

(3) A financial institution shall not in carrying out any act in compliance with any direction or regulations made under subsection (1) be treated as being in breach of any such rule of law, written law or contract.

(4) A financial institution shall not disclose any direction issued under subsection (1) (a) if the Authority notifies the financial institution that the Authority is of the opinion that the disclosure of the direction is against the public interest.

(5) A financial institution which :

(a) fails or refuses to comply with a direction issued to it;
(b) contravenes any regulations made under subsection (1) (b); or
(c) discloses a direction issued to it in contravention of subsection (4),
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000.

(6) In this section, 'financial institution' means :

(a) any bank licensed under the Banking Act (Cap. 19); (b) any finance company licensed under the Finance Companies Act (Cap. 108);
(c) any merchant bank that is approved as a financial institution under section 28;
(d) any money-changer licensed to conduct money-changing business, or any remitter licensed to conduct remittance business, under the Money-changing and Remittance Businesses Act (Cap. 187);
(e) any insurer registered or regulated under the Insurance Act (Cap. 142);
(f) any insurance intermediary licensed under the Insurance Intermediaries Act (Cap. 142A);
(g) any dealer or investment adviser licensed under the Securities Industry Act (Cap. 289);
(h) any futures broker, futures trading adviser or futures pool operator licensed under the Futures Trading Act (Cap. 116); and
(i) any other person licensed, approved or regulated by the Authority under any written law.

(7) For the purpose of subsection (6), a reference to a person being licensed, approved, registered or regulated under any of the laws referred to in that subsection includes a person who is exempted under the relevant law from being licensed, approved, registered or regulated.

Power to approve financial institutions and control their operations

28. --(1) The Authority may require any financial institution or class or classes of financial institutions whose operations are considered by the Authority to affect -

(a) monetary stability and credit and exchange conditions in Singapore;

(b) the development of Singapore as a financial centre; or

to be approved by the Authority for the purpose of carrying on business in Singapore.

[26/84]

(2) On an application in writing for approval under subsection (1), the Authority may -

(a) grant approval;

(b) refuse to grant approval and shall not be obliged to give reasons for its refusal; or

[26/84]

(3) Without prejudice to the generality of section 27, the Authority may, if it thinks it necessary or expedient in the public interest, give directions either of a general or special nature, to approved financial institutions or any class or classes of approved financial institutions in relation to -

(a) the range of activities that they may engage in or the range of services that they may provide;

(b) the terms and conditions under which they may carry on a particular activity or provide a particular service; and

(c) all matters in which it appears to the Authority that the activities that they engage in or the services that they provide affect or are likely to affect monetary or economic policy or credit conditions or the development of Singapore as a financial centre,

and the financial institutions concerned shall comply with such directions.

[26/84]

(4) The Authority may, from time to time, issue guidelines to and impose conditions of operation on such financial institutions as it thinks fit and may amend or revise those guidelines and conditions.

[26/84]

(5) The Authority may withdraw approval of a financial institution if it appears to the Authority that -

(a) any information required to be furnished in connection with an application for approval was false or misleading in a material particular;

(b) the financial institution has failed to comply with any direction or guideline issued or condition attached to an approval or conditions of operation imposed under this section;

(c) the financial institution has conducted its affairs so as to threaten the interests of its depositors or customers; or

(d) it is in the public interest to do so.

[26/84]

(6) Any financial institution, which is aggrieved by a decision of the Authority to withdraw approval, may appeal against the decision to the Minister whose decision shall be final.

[26/84]

(7) A financial institution, required under subsection (1) to obtain the Authority's approval, that carries on its business without first obtaining that approval shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 and, in the case of a continuing offence, to a further fine of $3,000 for every day during which the offence continues after conviction.

[26/84]

(8) An approved financial institution that fails to comply with any direction given under subsection (3) or any condition subject to which an approval is granted under subsection (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 and, in the case of a continuing offence, to a further fine of $2,000 for every day during which the offence continues after conviction.

[26/84]

Fees

29. --(1) Every financial institution approved by the Authority under section 28 may be required to pay such fees in respect of anything done under or by virtue of that section as the Authority may by notification in the Gazette prescribe.

[26/84]

(2) The Authority may prescribe different fees in respect of different classes of financial institutions and such fees shall apply uniformly to such classes.

[26/84]

(3) The manner of payment shall be as specified by the Authority.

[26/84]

Real-time gross settlement system

29A. --(1) The Authority may establish and operate one or more real-time gross settlement systems for the transfer of funds, settlement of payment obligations and the transfer and settlement of book-entry securities and instruments between or among participants approved by the Authority.

(2) A settlement system may be linked to another system in Singapore or elsewhere for the clearing or settlement of payment obligations, securities or instruments and whether or not such system is operated on a real-time gross settlement basis.

(3) The Authority may enter into agreements with participants of a settlement system and issue to the participants in writing rules for the operation of the settlement system and such rules shall not be deemed to be subsidiary legislation.

(4) Without prejudice to the generality of subsection (3), such rules may provide --

(a) for the appointment of the Authority as a certification authority for the purpose of issuing certificates for participants;

(b) for the conduct of participants;

(d) for the Authority, if it considers it necessary in the interests of the system, to stop or suspend the operation of the system or to stop or suspend the privileges or rights of any participant or class of participants;

(e) for the appointment of auditors or inspectors for the auditing or inspection of the operating systems of participants in respect of the settlement system; and

(f) for the payment of fees to the Authority.

(5) The Authority, any officer or employee of the Authority, or any person acting under the direction of the Authority, shall not be liable for any loss or damage suffered by any person or participant arising from, directly or indirectly, the use of a settlement system by any 10 participant unless such loss or damage results from a reckless act or omission or any intentional misconduct of any officer or employee of the Authority or any person acting under the direction of the Authority.

(6) The Payment and Settlement Systems (Finality and Netting) Act 2002 shall have effect in relation to a settlement system established and operated by the Authority under this section if the settlement system is designated under section 3 of that Act.

(7) A settlement system established and operated by the Authority under section 59A of the Banking Act (Cap.19) before the date of commencement of the Payment and Settlement Systems (Finality and Netting) Act 2002 shall continue and be deemed to have been established and operated by the Authority under this section.

(8) In this section --

'book-entry securities and instruments' means any securities and instruments that are transferable by a book-entry on a register or otherwise, and are --

(a) issued by the Government under any written law; or

(b) approved by the Authority for clearing, settlement or transfer through or under a settlement system;

'certificate' has the same meaning as in the Electronic Transactions Act (Cap.88);

'certification authority' has the same meaning as in the Electronic Transactions Act (Cap.88);

?participant? means a person approved by the Authority to be a participant of a settlement system and shall include the Authority where it participates in the settlement system;

'real-time gross settlement system' means a system which can effect final settlement of funds, payment obligations and book-entry securities and instruments on a continuous basis during such operating hours of a processing day as the Authority may determine and on a transaction-by-transaction basis;

'settlement system' means any real-time gross settlement system established under subsection (1).

Agents

30. In the exercise of its powers and the performance of its functions under this Act, the Authority may -

(a) establish agencies at such places outside Singapore as it thinks fit;

(b) arrange with and authorise a person to act as agent of the Authority outside Singapore;

(d) act as agent of any public authority or any company in which the Government or a public authority has a substantial interest or any company which is deemed to be related to that company by virtue of section 6 of the Companies Act (Cap. 50) either generally or for a particular purpose inside or outside Singapore.

[26/84]

[Act 16/2002, wef 30/09/2002]

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Last modified on 19/3/2007