The global financial and regulatory landscape has undergone many changes in recent years. To meet the operational requirements in this new environment, MAS has proposed to fine-tune the MAS Act in two phases. Consequential amendments will also need to be made for other written laws administered by MAS.
Key amendments in First Phase
2 To safeguard stability and public confidence in an increasingly volatile and complex environment, it is prudent for MAS to have more operational flexibility to deal with contingencies. MAS seeks to update sections in the MAS Act to set aside provisions for contingencies or market volatilities, and to allow MAS greater flexibility in lending to financial entities for the purpose of managing system liquidity and safeguarding the financial system.
3 At the international level, two distinct changes have occurred. First, it is increasingly recognized that accounting standards developed for commercial entities have not been formulated for entities with the unique powers and responsibilities of central banks. In line with the practice in major central banks, the MAS proposes to comply with accounting standards to the extent that it is appropriate to do so, taking into consideration its objectives in promoting monetary and financial stability. Second, international supervisory standards call for legal protection for both supervisory agencies and their staff. MAS proposes to rationalize the scope of immunity provisions contained in the various Acts administered by MAS, including extending immunity from legal suits to MAS itself.
4 To discharge its functions more effectively, major central banks and regulators have provisions for the Board or Chief Executive to form committees and to delegate authority to such committees. Although it can be inferred from the MAS Act that MAS has similar powers, an explicit provision would provide greater legal clarity and align MAS' legislation with international norms. It is proposed that provisions be inserted into the MAS Act to enable explicitly the Board and Managing Director to form committees and delegate powers to them or designated officers.
5 The first phase amendments cover the more immediate changes to be effected by early 2004, while the second phase in 2005 will include changes after more extensive reviews have been carried out. All of these changes are intended to enable MAS to carry out its functions more effectively and meet the operational challenges ahead.