For Parliament Sitting on 28 February 2025

Name and Constituency of MP
Mr Chua Kheng Wee Louis, Sengkang GRC

Question
1. The equities market review group held its inaugural meeting on 19 August 2024, with the first set of measures to strengthen Singapore’s equities market announced on 13 February 2025, and the next set of measures to be presented in 2H25. Already, there are concerns that the measures are left much to be desired. More needs to be done if we want to revive our equity markets.

Name and Constituency of MP
Mr Muhamad Faisal Abdul Manap, Aljunied GRC

Question
2. To allow ex-offenders to open a bank account.

Answer by Mr Chee Hong Tat, Minister for Transport and Second Minister for Finance, and Deputy Chairman of MAS, on behalf of Mr Gan Kim Yong, Deputy Prime Minister and Minister for Trade and Industry, and Chairman of MAS:

On a Vibrant Equities Market

1. Madam, with your permission, I will address both cuts for MAS and take clarifications after this reply if there is available time. Let me start with Mr Louis Chua’s cut on the equities market.

2. A key challenge which many exchanges face, is that global capital is heavily concentrated in the US and US listed stocks currently account for around two-thirds of global stock market capitalisation. 

3. The Review Group is clear about our objectives and realistic with our goals. Based on industry consultations, there are companies with a strong presence in Singapore and the region, that might not be large enough to sustain investor interest post-listing if they were to list in the US. These companies represent one key segment we could attract.

4. The Review Group focused on strengthening the elements of our ecosystem to enhance its competitiveness, and provide a well-functioning market for companies, including technology startups, to raise capital for their expansion.

5. The first set of measures span three mutually reinforcing pillars covering demand, supply and regulations:a. On demand side, we introduced measures to increase investor interest and deepen trading liquidity, such as the launch of a S$5 billion Equity Market Development Programme (EQDP). 

a. On demand side, we introduced measures to increase investor interest and deepen trading liquidity, such as the launch of a S$5 billion Equity Market Development Programme (EQDP). 

i. On the EQDP implementation, MAS will start evaluating eligible fund managers and strategies in the next few months. The EQDP will invest in a range of funds with a focus on Singapore stocks, including non-index component stocks. These funds will be managed by fund managers with strong investment track record and capabilities in Singapore. The fund strategies should be actively managed and commercially viable to attract capital from other investors. MAS has experience in running programmes with both investment and market development objectives, and this is an extension of our approach in developing fund management capabilities in Singapore.The feedback from the industry so far has been more encouraging than how Mr Chua had described it. He said, “Better than nothing”; I think other industry participants and stakeholders have given more positive comments about this move. But whether it works or not, let’s see. We will do our best and see whether this will help to grow the local fund management industry and also attract more investor liquidity.

ii. The Government and SGX will continue to encourage companies to list in Singapore, and we have recently introduced tax incentives for this.  However, listing decisions will be made by the companies, based on their commercial objectives. We should allow this, and not impose requirements for the companies to list on SGX, as it is more important for our overall economic competitiveness to preserve Singapore’s attractiveness to the founders of these companies and the global investors who invest in them.

b. On the regulatory front, Mr Louis Chua’s description of the Review Group’s approach does not represent the full picture.  I hope this is not deliberate, as it would otherwise be rather unfair to the Review Group and our workstream members, who include eminent industry leaders such as Mr Neil Parekh.

c. Sir, the Review Group has recommended taking a regulatory stance that is both pro-enterprise and pro-investor confidence. While regulation will be more focused and facilitative of listings, we will continue to uphold high corporate governance standards.  The Review Group also said that in the next phase of our review, we will look at initiatives to uplift companies’ capabilities in shareholder engagement and sharpen their focus on shareholder value. We will enhance avenues for investor recourse and will take robust enforcement action against market misconduct. In addition, research coverage will be enhanced, to support investors to make better informed investment decisions.

6. As we embark on the next phase, the Review Group will continue to seek feedback and work closely with industry partners to co-create solutions, and strengthen our foundations to give Singapore the best chance to attract listings and grow investor interest. 

On Bank Account for Ex-offenders

7. Madam, Mr Faisal Manap asked about bank accounts for ex-offenders. MAS does not prohibit banks from opening accounts for ex-offenders. However, banks may choose to offer accounts with more limited functions to ex-offenders of financial crimes to manage the higher risk of them being misused.

8. To promote financial inclusion, MAS has worked with major retail banks to offer limited purpose bank accounts, or LPBAs. From January 2022 to June 2024, banks have offered more than 3,600 LPBAs. These address the basic banking needs of most ex-offenders and other persons whom banks have assessed to pose higher financial crime risks. With LPBAs, individuals can receive salaries and government payouts, and make payments. Banks monitor LPBA use more closely to ensure only funds from agreed sources are received, and to detect suspicious transactions.

9. Banks will assess each case individually to decide whether to offer LPBAs and they have offered LPBAs to ex-offenders of serious financial crimes where the risks are manageable. Banks may also decline to open an account for individuals who are assessed to pose unacceptable risks that cannot be mitigated by LPBA’s safeguards, such as those who repeatedly allow bank accounts to be misused, have violated financial sanctions, or are unwilling to cooperate with the bank’s due diligence. We encourage individuals to provide the necessary information to banks to allow proper due diligence to be carried out.

10. This balances financial inclusion against the risk of our financial system being abused, which would then be to the public’s detriment.

11.  Mr Faisal Manap’s resident was convicted of money-laundering offences and sentenced to 20 months’ jail. She had continued to use her bank accounts to receive funds from people she did not know despite repeated warnings from CAD not to do so. The banks have rejected the appeal because the appellant’s bank account is still subject to a seizure order, and she has not provided the necessary information and supporting documents to the banks.

12. MAS will continue to work with the banks to see if more can be done to help the appellant. Members can also refer affected residents who require assistance to MAS. 

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