"The Financial Institutions (Miscellaneous Amendments) Bill 2013" - Second Reading Speech by Mr Tharman Shanmugaratnam, Deputy Prime Minister, Minister in charge of MAS
1 Mdm Speaker, I beg to move that the Bill be now read a second time.
2 Arising from the amendments to the Monetary Authority of Singapore Act (“MAS Act”) to extend the resolution regime for banks and insurance companies to certain other financial institutions, consequential amendments have to be made to other Acts under MAS’ purview as well as the Companies Act. MAS has also taken the opportunity to make amendments to enable better administration of certain Acts under its purview.
3 The Bill proposes amendments to the following Acts under MAS’ purview:
(a) the Banking Act; (b) the Business Trusts Act; (c) the Finance Companies Act; (d) the Government Securities Act; (e) the Money-changing and Remittance Businesses Act; (f) the Payment Systems (Oversight) Act; (g) the Securities and Futures Act; and (h) the Trust Companies Act.
4 MAS has consulted the industry and the public on these changes. The feedback received was carefully considered and incorporated into the Bill where practicable and appropriate.
5 Mdm Speaker, I will now go through the key amendments in the Bill.
AMENDMENTS WHICH CORRESPOND TO CHANGES IN THE MONETARY AUTHORITY (AMENDMENT) BILL 2013
6 Provisions are being introduced in the Finance Companies Act, Payments Systems (Oversight) Act, the Securities and Futures Act and the Trust Companies Act to allow for the voluntary transfer of the business of certain financial institutions and to empower MAS to take over the management of such institutions in distress or to appoint a statutory manager to do so.
7 Provisions in the Banking Act relating to the resolution regime for banks will be repealed when broader provisions which deal with the resolution of financial institutions in the new Part VB of the MAS Act come into effect. However, due to the unique nature of the insurance industry, the provisions in the Insurance Act on the resolution regime for insurance companies continue to apply to insurance companies. This will enable all resolution powers relating to insurance companies to be in the Insurance Act, such as the power to resolve insurance companies (including those organised as co-operative societies registered under the Co-operatives Societies Act), and the power to run-off insurance companies.
OTHER AMENDMENTS FOR THE ADMINISTRATION OF THE ACTS
8 The Bill also amends the various Acts mentioned earlier for better administration. These include -
(a) clarifying that it will not be necessary for any notice in writing or direction issued by MAS, under the various Acts, to be published in the Gazette to have legal effect; (b) providing that any composition fine or financial penalty collected by the Authority is to be paid to the Consolidated Fund; (c) updating the provisions for the composition of offences in the various Acts, in particular to enable MAS to compound offences under provisions which have been repealed; and (d) prohibiting certain financial institutions from permitting a person to act as its director or executive officer without the prior consent of MAS in certain circumstances.