1 Overview and Definitions
1.1 The Monetary Authority of Singapore (MAS) has a long-standing policy of not encouraging the internationalisation of the Singapore dollar (S$). This stems from the MAS' use of the exchange rate as the principal tool of monetary policy. The policy is aimed at ensuring that the growth of the S$ market is commensurate with the development of the economy and that the effective conduct of MAS' monetary policy is not compromised.
1.2 This Notice governs dealers on the lending of S$ to non-residents. For the purposes of this Notice, residents are:
- companies which are at least 50% owned by Singapore citizens; and
- financial institutions (FIs) in Singapore that are governed under MAS Notice 1201 or equivalent Notices.
All entities that do not fall within the definition of a resident outlined above are considered non-residents.
1.3 Pursuant to Section 33A of the Securities Industry Act (Cap 289), dealers are required to observe the guidelines relating to this policy.
1.4 The provisions in this Notice relate to the non-internationalisation of the S$ and do not authorise dealers to engage in financial activities outside the scope of their licences, or in any way contravene the provisions of any applicable laws, rules and regulations.
2 S$ Credit Facilities
2.1 For the purposes of this Notice, S$ credit facilities include loans, contingent credit lines and foreign exchange (FX) swaps involving a spot sale of S$ to a non-resident in the first leg.
2.2 The restrictions in this section do not apply to individuals and non-financial entities, including corporate treasury centres. The restrictions in this section apply only to non-resident financial entities, which include:
(a) banks
(b) merchant banks
(c) investment banks
(d) finance companies
(e) insurance companies
(f) securities dealers
(g) asset/fund management companies
(h) hedge funds
(i) money, futures, and prime brokers
(j) other classes that the MAS may prescribe.
2.3 Dealers may lend S$ to non-resident financial entities for any purpose whether in Singapore or overseas as long as the aggregate S$ credit facilities do not exceed S$5 million per entity1.
2.4 Where amounts exceed S$5 million per entity, the following conditions apply:
- Where the S$ proceeds are to be used outside Singapore, dealers must ensure that the S$ proceeds are swapped or converted into foreign currency upon draw-down.
- Dealers should not extend S$ credit facilities to non-resident financial entities if there is reason to believe that the S$ proceeds may be used for S$ currency speculation.
2.5 Dealers are required to report to the MAS, monthly, their aggregate outstanding S$ lending to non-residents in the format in Appendix I. A nil return is required. All information required in Appendix I (PDF, 4.81KB) should be submitted to the Monetary Management Division (MMD), MAS no later than 10 working days after the reporting month. Dealers should keep documentary evidence supporting these S$ credit facilities for audit and inspection purposes.
3 S$ Equity and Bond Issuance
3.1 Dealers may arrange S$ equity or bond issues for non-residents. If the S$ proceeds are to be used outside Singapore, they must be swapped or converted into foreign currency before remitting abroad.
3.2 Where the bond issuer is an unrated foreign entity, dealers may place or sell the S$ bonds to sophisticated investors2 only.
4 Consultation Procedure
4.1 Should dealers need to consult the MAS, they may write to:
Monetary Management Division, MAS
10 Shenton Way, MAS Building
26th Floor
Singapore 079117
Fax: 6229 9491
E-mail: sgddiv@mas.gov.sg
Appendix I: Format pf Monthly Report
 (PDF, 4.81KB)
MAS Notices on Non-Internationalisation of the Sing dollar (S$) -- Frequently Asked Questions
1 For FIs seeking to obtain S$ credit facilities, each subsidiary is considered a separate entity while the Head Office and all overseas branches are collectively regarded as one entity. [Back]
2 As defined in the Companies Act (Cap 50). [Back]
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