Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."
Inspection by Foreign Supervisory Authorities
2. Last year, the Government embarked on a fundamental review of its policies towards the financial sector, with a view to developing Singapore as a major financial centre in Asia, and globally. The review included re-examining the role of the Monetary Authority of Singapore (MAS) and that of its Board of Directors.
Financial Sector Promotion
3. Hitherto, MAS has focused on promoting monetary stability for sustainable economic growth, regulating the financial sector to ensure its soundness, and acting as the Government's financial agent. It has also played a developmental role with regard to the financial sector. Under MAS' stewardship, Singapore's financial sector has seen dramatic growth over the last 25 years.
4. However, we cannot simply extrapolate this success into the future. The global financial industry is in ferment. Falling regulatory barriers, advances in information technology and a tidal wave of mergers are integrating financial markets. Financial activities are consolidating in fewer centres, and competition is intense.
5. To thrive and grow in this bracing environment, we need a change in approach. MAS needs to build up a much stronger promotion capability. To this end, MAS has formed a separate Financial Sector Promotion Department to focus its efforts in developing the financial industry. Besides attracting new activities, players and products, this department will carry out manpower and IT planning for the financial sector as well as design and implement incentive schemes.
6. The Bill proposes to include financial sector promotion as one of MAS' principal objects. This is to recognise the importance of this function, and signal to the industry MAS' commitment to a proactive role in promoting Singapore's financial services sector.
Size Of The MAS Board
7. The MAS Act currently limits the size of the MAS Board to seven directors. At the moment, there are six directors serving on the Board. It would be useful to have the flexibility to appoint a slightly larger Board, in order to benefit from the experience of a wider group of individuals. This would strengthen MAS as an organisation and support its efforts to promote Singapore as a world-class financial centre.
8. The Bill proposes to raise the maximum number of directors from seven to ten. In line with this enlargement, the Bill also recommends redefining the quorum for Board meetings so that the quorum would at least constitute a simple majority of the number of directors serving on the Board.
Criteria For MAS Board Members
9. Since its founding in 1971, MAS has assumed oversight of various segments of the financial services industry, including insurance in 1977 and securities in 1984. In addition, new activities such as financial futures trading have been introduced, which now come under MAS' purview.
10. The MAS Act currently disqualifies directors and salaried officials of banks from serving on the MAS Board. However, it does not disqualify those involved in the other activities supervised by MAS from serving on the board. The Bill proposes to rectify this omission and extend the disqualification to directors and salaried officials of all financial institutions licensed or approved by MAS.
11. Sir, I beg to move.