MAS Enhances Supervisory Powers to Regulate Unregulated Business Activities
In an effort to strengthen its regulatory powers, the Monetary Authority of Singapore (MAS) has announced plans to enhance its supervisory capabilities to better regulate unregulated business activities.
Strengthening Regulatory Framework
The new measures aim to ensure that financial institutions operating in Singapore are held accountable for their actions and maintain robust safeguards against money laundering, terrorism financing, and fraudulent activities. This comes as the banking industry in Singapore navigates the challenges and opportunities presented by digital banking.
New Digital Banks Must Comply with Stricter Regulations
Under the new rules, digital banks will be subject to stricter regulations, including:
- Enhanced due diligence requirements
- More stringent know-your-customer (KYC) processes
- Increased scrutiny of their risk management practices
Additionally, MAS will introduce a shared responsibility framework (SRF) for sharing liability for scam losses amongst financial institutions, telecommunications companies, and consumers. This move aims to promote greater cooperation and transparency among industry players in the detection and prevention of fraudulent activities.
Eliminating Cheques
MAS is also proposing amendments to the Electronic Funds Transfer Act to phase out cheques from common use by 2025. This move aims to reduce the risks associated with cheque fraud and improve the efficiency of transactions.
Russia-Ukraine Conflict: MAS Issues Sanctions Notices
In response to the ongoing conflict in Russia and Ukraine, MAS has issued two notices detailing the scope of Singapore’s financial sanctions against Russia. The notices require all financial institutions regulated by MAS to comply with the sanctions, which prohibit dealings with designated Russian banks and entities.
- Freeze assets owned or controlled by designated Russian banks and entities
- Ensure that such assets are not made available to them
The sanctions aim to prevent the proliferation of military goods and other restricted items, as well as the raising of new funds for the Russian Government or Central Bank.
Discontinuation of LIBOR
Meanwhile, MAS has announced the discontinuation of the London Interbank Offered Rate (LIBOR) as a benchmark for interest rates. The move is part of an industry-wide transition away from LIBOR, which will cease to be provided by administrators or will no longer be representative by June 2023.
Transition to Risk-Free Rates
MAS has identified alternative reference rates that will replace LIBOR, with the Singapore Interbank Offered Rate (SIBOR) being discontinued on December 31, 2024. The transition aims to promote greater transparency and stability in financial markets.
The Monetary Authority of Singapore continues to monitor developments closely and remains committed to maintaining a robust regulatory framework that protects the integrity of the financial system.