MAS Sets Up New Committee to Oversee Bond Market Developments

5 Aug 1999... Minister for Health and Second Minister for Finance, Mr Lim Hng Kiang, today announced the names of the first group of sixteen financial institutions that have been accorded the Approved Bond Intermediary (ABI) status. Mr Lim also announced the formation of a multi-agency Debt Market Committee chaired by MAS Managing Director Mr Koh Yong Guan.

Speaking at a reception hosted by the Monetary Authority of Singapore (MAS), Mr Lim said that the ABI ceremony marked yet another milestone in Singapore's efforts to encourage the growth of the Singapore bond market and boost its standing as an international financial centre. "We believe that this first group of ABIs will form the critical mass to significantly enhance our position as a debt arranging and trading centre, and encourage even more debt market activities in Singapore."

Mr Lim also noted that this first group of ABIs comprised a good mix of reputable local and foreign financial institutions with proven expertise in debt origination, distribution and trading functions. "Significantly, these sixteen ABIs have also demonstrated clear commitment to continue developing their fixed income capabilities and presence in Singapore," said Mr Lim.

The financial institutions accorded the ABI status this morning are :

• ABN Amro Bank N.V. (Singapore Branch)

• Citicorp Investment Bank (Singapore) Ltd

• Credit Agricole Indosuez Merchant Bank Asia Ltd

• Deutsche Bank AG (Singapore Branch)

• The Development Bank of Singapore Ltd

• The Hongkong and Shanghai Banking Corpn Ltd (Singapore Branch)

• J P Morgan Securities Asia Pte Ltd

• Merrill Lynch (Singapore) Pte Ltd

• Morgan Stanley Dean Witter Asia (Singapore) Pte

• Oversea-Chinese Banking Corporation Ltd

• Overseas Union Bank Ltd

• Schroder International Merchant Bankers Ltd

• Standard Chartered Bank (Singapore Branch)

• Tokyo-Mitsubishi International (Singapore) Ltd

• UBS AG (Singapore Branch)

• UOB Asia Ltd

[Fact sheets on each bank's debt market business is enclosed in the Media Kit.]

The ABI scheme was introduced in this year's Budget. Under the ABI scheme, a financial institution with significant debt arranging and trading capabilities will be accorded the ABI status. Qualifying debt securities arranged by an ABI would automatically qualify for relevant bond market tax incentives. The ABI itself would also enjoy tax exemption on the fee income earned from arranging and distributing these securities.

"The introduction of the ABI scheme would help draw more international debt teams and debt capabilities into Singapore, further increasing the level of international issues from Singapore," Mr Lim added. "While we have seen new activities in the bond market in the past year, our ultimate aim is for Singapore to play a key role as leading international debt hub in Asia."

Said Ms Teo Swee Lian, Executive Director of MAS' Financial Sector Promotion Department, "The response to the ABI scheme from leading financial institutions has been very encouraging. The commitments made by these institutions to continue to deepen their debt market capabilities in Singapore is also heartening."

Applications for the ABI scheme are still open, and financial institutions with significant debt presence in Singapore are welcomed to apply for the ABI incentive.

Touching on the formation of a new multi-agency Debt Market Committee to oversee Singapore bond market developments, Mr Lim said that the committee will be looking at encouraging more public and private bond issues. The Committee will be chaired by Mr Koh Yong Guan, Managing Director of MAS, with Mr Lam Chuan Leong, Permanent Secretary of Ministry of National Development, as Deputy Chairman. The Committee will also be working closely with the industry to review and develop a regulatory environment and necessary infrastructure conducive to the growth of a vibrant debt market.