Following the completion of MAS' supervisory review in June 2013, the Association of Banks in Singapore and the Singapore Foreign Exchange Markets Committee announced new measures to strengthen the governance and design of benchmark rates setting processes for key financial benchmarks in Singapore. Benchmarks which were not widely used were discontinued. SGD SOR and several FX benchmarks were transitioned from a poll-based methodology to a traded methodology that uses price data from actual market transactions, while the governance of SGD SIBOR submission processes was strengthened at each submitter bank and at the administrator in line with a set of industry guidelines on benchmark rate setting.

In line with international regulatory developments on financial benchmarks, MAS proposed a new regulatory framework in June 2013 with two key thrusts:

  • Introduction of criminal sanctions for the manipulation of any financial benchmarks under the SFA; and
  • Regulation of the setting of key financial benchmarks set in Singapore.

MAS has consulted the public on its policy recommendations and plans to table the proposed legislative amendments to the SFA in Parliament in the first half of 2015. If passed by Parliament, MAS will have powers under the SFA to designate key benchmarks based on considerations such as systemic importance of the benchmark, and an assessment of its susceptibility to manipulation. Administrators and submitters of designated benchmarks will be regulated by MAS.

In formulating the regulatory framework, MAS took reference from the work of the IOSCO Principles for Financial Benchmarks published in July 2013, which MAS helped to develop. These Principles were endorsed by the FSB as the roadmap for benchmarks reform. They seek to enhance the integrity and reliability of benchmarks by providing guidelines to benchmark administrators on areas such as governance, methodology and accountability. MAS also contributed to international reform efforts as a member of the IOSCO Review Team that conducted an assessment of the degree of implementation of the IOSCO Principles by the administrators of the most widely used global interest rate benchmarks (LIBOR, EURIBOR and TIBOR). In addition, MAS was a member of the FSB Official Sector Steering Group (OSSG). Apart from providing oversight of the IOSCO review, the OSSG worked to encourage private sector participants to identify alternative benchmarks.