Tharman Shanmugaratnam
Singapore
“EDB conducts regular reviews to GIP to ensure its effectiveness in attracting only top-tier business leaders who are interested to drive the growth of their businesses and investments from Singapore.”
“MAS may vary the size of the additional capital requirement imposed on the bank and take other regulatory actions depending on the outcome of ongoing reviews. MAS requires all retail banks in Singapore to ensure that their mission critical systems supporting digital banking are resilient.”
“This question will be answered in the reply to Dr Tan Wu Meng's Parliamentary Question filed for tomorrow's Sitting. [Please refer to "Probe into Recent Disruptions of DBS' Digital Bank and Physical ATM Services and Preventive Measures Implemented", Official Report, 5 July 2023, Vol 95, Issue 107, Written Answers to Questions for Oral Ans…”
“Borrowing from the banks is one of the ways in which MAS carries out MMOs to soak up such excess liquidity. Like other central banks, MAS does this daily through an auction system, enabling MAS to withdraw liquidity through the Primary Dealers that submit the most competitive prices.”
“To mitigate consumer over-indebtedness, the Monetary Authority of Singapore (MAS) requires financial institutions (FIs) to implement a range of safeguards when extending mortgage loans and unsecured credit.”
“The Monetary Authority of Singapore imposes on external asset managers the same stringent regulatory standards for anti-money laundering and countering the financing of terrorism that it imposes on banks.”
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“The recent chain of high profile failures in the cryptocurrency markets, starting from the collapse of the TerraUSD (UST) and Luna tokens, illustrates the high risks involved in investments in cryptocurrencies that the Monetary Authority of Singapore (MAS) has warned the public about repeatedly. Despite this turmoil, spillovers to the mainstream financial system and the economy remain limited at this point. While data on cryptocurrency holdings among the Singapore public are not available, statistics collected by MAS show that banks in Singapore have insignificant exposures to the cryptocurrency ecosystem. Alongside other regulators globally, MAS is actively reviewing its approach to the regulation of stablecoins. Currently, stablecoins, together with other cryptocurrencies such as Bitcoin, are considered digital payment tokens (DPTs) under the Payment Services Act. The regulatory regime for DPT services under the Act primarily targets money laundering, terrorism financing and technology risks. Hence, services relating to DPTs that pose such risks, including dealing and facilitation of exchange, are subject to regulation1. MAS is assessing the merits of a regulatory regime tailored to the specific characteristics and risks of stablecoins, such as regulating the reserve requirements and the stability of the peg, and will consult the public in the coming months.”
“Two, MAS has been co-leading an international subgroup on cloud monitoring and identity and access management under the Bank for International Settlements (BIS). The technology landscape that banks operate in is becoming more complex. It is, hence, critical that banks continually maintain and uplift the security and resiliency of their IT systems so as to maintain stability and trust in the banking system. MAS will continue to work closely with the industry in this regard.”
“MAS has required the bank to hold additional capital2 until all shortcomings identified from the review are satisfactorily rectified. The recent incidents highlight the need for banks to continually review their IT resilience strategy and ensure that there is sufficient redundancy and fault tolerance built into their digital banking IT infrastructure. In addition, swift diagnosis and recovery of systems, coupled with robust business continuity management, are critical in minimising the impact of an IT disruption. MAS has recently published a set of new Business Continuity Management Guidelines (BCMG)3 that set out measures that financial institutions can employ to sustain critical business services and to minimise service disruption. They include identifying the end-to-end dependencies across business processes, systems, manpower and other resources required to deliver critical business services and addressing any gaps that could hinder the effective recovery of these services during an outage. Globally, financial institutions are increasingly relying on third-party services, such as public cloud computing. This increases financial institutions' exposure to third-party risks. MAS has highlighted third-party risks as one of the key areas for financial institutions to focus on in both BCMG and the Technology Risk Management Guidelines (TRMG)4. MAS has been working closely with the industry, global financial regulators and leading service providers, on best practices to manage third-party risks. One, MAS has collaborated with the Association of Banks in Singapore (ABS) to issue guidelines on sound cloud computing practices5. It has also issued an advisory on managing the risks of using public cloud computing services.”
“Since July 2021, four major retail banks1 have reported a total number of eight interruptions to their digital banking services. The incidents were mostly resolved within three hours. They affected, on average, about 12,000 customers, with the numbers ranging from 500 to 37,000. The longest interruption of 39 hours was experienced by DBS Bank from 23 to 25 November 2021, arising from a malfunction of the bank's access control servers. The root causes of these incidents lay mainly within the banks themselves, such as software misconfigurations, system malfunctions and errors that were introduced when the banks were making system changes. One of the incidents was related to an outage in a third-party cloud service provider. MAS takes seriously all IT incidents that affect the availability of digital banking services. It requires banks to be able to recover systems supporting critical banking services, such as fund transfers and payments services, within four hours following any disruption. In addition, the total unscheduled downtime for each critical system must not exceed four hours within any 12-month period. MAS takes supervisory action when the banks breach these requirements. In the case of the prolonged interruption in DBS Bank's digital banking services in November 2021, MAS directed the bank to appoint an independent expert to conduct a comprehensive review of the incident, including the bank's controls and recovery actions and how a similar incident can be prevented in future. The bank has also been directed to rectify all shortcomings identified from the review and implement measures to ensure that any future disruption to its digital banking services is resolved quickly and adequately.”
“MAS, additionally, conducts stress tests to assess the resilience of household debt serviceability under adverse scenarios of sharp interest rate hikes and significant income losses. The results suggest that most households should still be able to service their debts but there will be a small segment of households which may be more constrained by rising interest rates. Such vulnerable borrowers should approach their lenders early to explore possible loan refinancing and repayment solutions. Borrowers should exercise caution and be sure of their ability to service their loans before making additional financial commitments.”
“Financial institutions (FIs) regulated by the Monetary Authority of Singapore (MAS) provide about 98% of all credit extended to Singapore households. The remaining 2% includes credit extended by licensed moneylenders regulated by MinLaw, hire-purchase agreements regulated by MTI and credit-co-operatives overseen by MCCY. These Government agencies have coordinated to implement safeguards on consumer credit, guided by the shared objective of discouraging consumers from spending beyond their means. These include the application of caps to the maximum amount of unsecured borrowings that an individual can obtain from an FI, a licensed moneylender or a credit co-operative. The Total Debt Servicing Ratio (TDSR) framework looks at a borrower's monthly expenses on credit facilities extended by FIs and non-FIs, including mortgages, car loans and unsecured debt, as a proportion of the borrower's income. The framework is designed and calibrated to ensure that the calculated TDSR provides a conservative estimate of borrowers' debt servicing ability across a variety of scenarios. One, FIs are required to ascertain borrowers' total debt obligations, based on credit bureau checks and the latest available statements for loans taken up with FIs and non-FIs. Two, a borrower's income is also estimated conservatively, with haircuts applied to variable income and eligible financial assets. Three, the interest rate used to calculate property loan repayments under TDSR is the higher of 3.5% or the prevailing market rate. This provides a buffer for borrowers to service their mortgages amidst a rise in interest rates, such as what we are seeing now.”
“Let me, first, clarify that borrowers are exempted from the total debt servicing ratio, mortgage servicing ratio and loan-to-value limits when they refinance their loans for owner-occupied properties. This helps them explore refinancing options after the lock-in period for their existing mortgages. Financial institutions will conduct credit assessments on borrowers when considering their request for refinancing. Where borrowers do not have salary income, financial institutions may consider other factors, such as income from rent or financial assets, a borrower’s repayment record and the outstanding loan relative to the value of the property. Some financial institutions may also request for a joint borrower or guarantor with income to be named. This is to ensure that borrowers can continue to service their housing loans over the longer term. The local banks have committed to be facilitative to borrowers who have the financial means to refinance their property loans. We encourage borrowers to approach their lenders to discuss refinancing options when necessary.”
“The plans will take into account borrowers’ payment capacity after setting aside necessary expenses and, typically, comprise smaller instalment payments over a longer repayment period at a lower interest rate. CCS conducted over 1,800 counselling sessions in 2021, with the numbers declining slightly over the last four quarters. CCS also helped place over 2,300 individuals on debt management plans and other repayment plans in 2021. This number has declined from 540 in the first quarter of 2021 to 384 in the first quarter of 2022. A blend of early intervention and financial education can help address debt problems upstream. For instance, to encourage financially distressed HDB owners to seek assistance early, MAS has worked with MND, HDB, MOM and financial institutions to establish standardised interventions when late mortgage repayments occur, which include proactively directing borrowers to seek assistance from various sources. These include potential loan restructuring solutions, early referrals to appropriate social service agencies and, in certain limited cases, helping them source for alternative HDB accommodation where foreclosures are unavoidable. On an ongoing basis, MoneySense, our national financial education programme, actively educates the public on money management skills and provides information on where indebted consumers can seek help.”
“The household debt situation and credit profile across consumer loan products in Singapore, fortunately, remains healthy by and large. The charge-off rate, a measure of those defaulting on credit card payments, in fact, decreased from 6.3% in the fourth quarter of 2019 to 4.1% in the first quarter of 2022. The proportion of non-performing mortgages has also remained low at less than 1%. When borrowers face difficulties repaying their debts to financial institutions, their first step should be to approach the lenders early to explore options, such as restructuring payment arrangements. Financial institutions remain committed to provide assistance to borrowers based on their individual circumstances. Applications for assistance with regard to unsecured credit has declined over the last year, from 759 in the first quarter of 2021 to 372 in the first quarter of 2022. Applications for mortgage loan assistance declined from 1,384 to 34 over the period. Besides such bilateral assistance, individuals with outstanding unsecured debt across more than one financial institution may also consider taking up a debt consolidation plan with a participating bank. Such plans allow borrowers to consolidate all their unsecured credit facilities across financial institutions into a single loan at a lower interest rate, simplifying the debt repayment process. Take-up rates for new debt consolidation plans have also fallen over the past year, from 1,153 arrangements in the first quarter of 2021 to 200 arrangements in the first quarter of 2022. Borrowers who need additional assistance can seek help from Credit Counselling Singapore, or CCS. CCS provides distressed borrowers with credit counselling and helps them work out debt management plans for unsecured loans with their creditors.”
“As Single Family Offices (SFOs) do not manage third party monies, they are not required to be registered or licensed by the Monetary Authority of Singapore (MAS). As such, MAS does not have authoritative data on the number of SFOs or the scale of their operations in Singapore. Based on MAS’ estimates, there were about 400 SFOs as at end-2020 and 700 SFOs as at end-2021. MAS does not have estimates on aggregate business spending, aggregate AUM held and the amount invested locally by SFOs. For SFOs seeking tax incentives on income derived from their investments managed in Singapore1, they are required to meet criteria on business spending, assets under management, and investment professionals hired. With effect from April this year, the requirements under each of these criteria were increased, and a new requirement stipulating that SFOs must make a certain amount of local investments was introduced. Besides these direct contributions, SFOs also generate indirect employment when they work with external finance, tax and legal professionals on wealth planning and operational matters. In addition, they expand the potential pool of capital for purposeful causes such as ESG investments and philanthropic activities. These will increase the positive spillovers to the Singapore economy and enhance the professionalism of the family offices in Singapore.”
“This will deepen and expand Asia-focused climate research and training and develop a strong pipeline of local sustainable finance talents.”
“(c) SGX and ACRA have also convened a Sustainability Reporting Advisory Committee to advise on a sustainability reporting roadmap for all Singapore-incorporated companies. (d) An industry task force convened by MAS3 is developing a taxonomy to help financial institutions in Singapore classify activities as environmentally sustainable, harmful, or in transition. (e) MAS' Project Greenprint4 will leverage technology-based solutions to enhance access to trusted and high-quality ESG data for decision-making. Third, to encourage firms to invest in sustainable projects and assets and adopt sustainable business practices, MAS has introduced the Sustainable Bond Grant Scheme (SBGS) and Green and Sustainability-Linked Loan Grant Scheme (GSLS) to help corporates defray the additional costs incurred in conducting external reviews aligned with internationally-recognised principles. The GSLS also encourages banks to develop green and sustainability-linked loan frameworks to make such financing more accessible to small and medium-sized enterprises. Finally, MAS and the Institute of Banking and Finance (IBF) launched the Sustainable Finance Technical Skills and Competencies (TSCs) earlier this year to support the financial industry, businesses and individuals in deepening their sustainable finance capabilities. The TSCs set out robust, common standards of proficiency and knowledge that are needed to perform various job roles in sustainable finance. MAS is also developing a strong sustainable finance research and talent development ecosystem, comprising centres of excellence in our universities, reputable training providers, and Asia Pacific sustainability hubs established by financial institutions.”
“MAS has taken a multi-pronged approach to promoting sustainable finance, namely to: (i) strengthen the financial sector's resilience to environmental risks; (ii) enhance climate-related disclosures and data; (iii) support sustainable finance market development; and (iv) build sustainable finance knowledge and capabilities. First, MAS has issued guidelines on how environmental risks are to be managed by financial institutions. These guidelines were recently complemented by a set of information papers highlighting good practices by financial institutions and identifying areas where further work is needed. MAS will be conducting stress tests this year on financial institutions' resilience against a range of long-term climate scenarios. Second, MAS is putting in place enablers to enhance sustainability disclosures and address data challenges faced by market participants. (a) MAS will consult on introducing mandatory disclosure requirements for financial institutions, as soon as a global baseline sustainability reporting standard is established by the International Sustainability Standards Board (ISSB), as expected by the end of this year. (b) SGX has set out a roadmap for mandatory climate-related financial disclosures by listed entities. Listed companies in sectors where climate-related disclosures are the most relevant will be required to provide these disclosures for the financial year commencing 1 January 2023. More sectors will be added to the mandatory disclosure list for the financial year commencing 1 January 20241. SGX has indicated its intention to work towards aligning its reporting requirements with the ISSB standards after they are finalised2.”
“MAS reiterates its warning: cryptocurrencies are highly risky and are not suitable for the retail public. People can lose most of the money they have invested, or more if they borrow to purchase cryptocurrencies.”
“Since 2017, the Monetary Authority of Singapore (MAS) has consistently warned that cryptocurrencies are not suitable investments for the retail public. Most cryptocurrencies are subject to sharp speculative price swings. Recent events have vividly demonstrated the risks, with prices of several cryptocurrencies falling drastically. In January this year, MAS went further than most other regulators, to restrict the marketing and advertising of cryptocurrency services in public areas, and disallow cryptocurrency trading being portrayed in a manner that trivialises its risks. All entities dealing in cryptocurrencies (termed digital payment token or DPT service providers) in Singapore are expected to comply with the MAS guidelines. Since then, DPT service providers have taken actions to meet these rules, such as removing cryptocurrency ATMs from public areas and taking down advertisements from public transport venues. DPT service providers are currently regulated under the Payment Services Act (PS Act) primarily for money laundering and terrorism financing risks. But the PS Act also empowers MAS to impose additional measures on DPT service providers to ensure better consumer protection, and to maintain financial stability and safeguard the efficacy of monetary policy. MAS has been carefully considering the introduction of additional consumer protection safeguards. These may include placing limits on retail participation, and rules on the use of leverage when transacting in cryptocurrencies. Given the borderless nature of cryptocurrency markets, however, there is a need for regulatory coordination and cooperation globally. These issues are being discussed at various international standard setting bodies where MAS actively participates.”
“As at end-2021, about 71% of the financial sector workforce were Singapore Citizens, 14% were Permanent Residents and 15% were work pass holders. For senior roles1, based on MAS' survey results for 2020, about 46% were Singapore Citizens, 21% Permanent Residents and 33% work pass holders. These proportions have remained stable over the years, with a gradual increase in the proportion of Singapore Citizens holding senior roles in the finance sector. In absolute terms, more than 3,000 Singapore Citizens now hold senior positions in the financial sector, an increase of more than 80%, compared to 2016.”
“Enterprise Singapore's interactions with the commodities sector also suggests that financing conditions for commodity traders remain stable. Commodity traders also tap on a diverse pool of financing, including banks overseas and international capital markets.”
“MAS has been closely monitoring developments in the international commodity markets and the broader external environment and their potential impact on Singapore's financial system. Singapore's local banking groups had an aggregated commodities financing exposure of S$109 billion as at end-2021, which is around 9% of their total credit exposures. In the face of sharp spikes in global commodity prices, commodity trading firms have increased their demand for working capital to meet higher margin requirements. They have had to use a variety of derivatives more widely to hedge their exposures against price volatility. Firms which do not manage their risks well may run into difficulty in servicing their loans. As for China, the mobility restrictions are expected to have some impact on production and supply chains. There is uncertainty over how long these restrictions would persist and their spillover effects on commodity markets and regional economies, including Singapore. Banks in Singapore have, understandably, stepped-up monitoring of their exposures to borrowers that might be adversely affected by these developments. Measures taken include performing stress tests on borrowers' balance sheets to assess the impact of supply chain disruptions, heightened commodity prices and energy supply constraints. MAS will continue to engage key banks to ensure they are working with borrowers to manage these risks as the situation evolves. There is no need for MAS to provide liquidity to commodity firms and MAS would, at most times, prefer not to engage in direct provision of liquidity to corporate borrowers. The banking system continues to provide credit to the commodity trading sector to meet firms' liquidity needs.”
“There have been reports abroad of bots being used to promote securities on social media platforms, which may fuel speculative trading in those securities or trading based on false information. The Monetary Authority of Singapore (MAS) and Singapore Exchange Regco (SGX Regco) conduct surveillance and post-trade monitoring of the trading activity on SGX. When unusual trading behaviour is detected, analysts conduct further investigations, including surveillance of social media, as needed, to detect and identify persons inciting the trading. Thus far, MAS and SGX Regco have not detected bots being involved in cases of unusual trading activity. If we do, we will follow up with the social media service provider to identify the person controlling the bots or request the provider to disable the social media account or remove the associated content. At the same time, we will work with SGX trading members to disrupt the suspicious trading activity. Depending on the circumstances, this could include measures like disabling trading accounts involved in the suspicious trades or suspending the trading of securities experiencing unexplained sharp price changes. MAS, the Commercial Affairs Department of the Singapore Police Force and SGX Regco have previously issued public advisories1 on the risks related to trading in securities based on discussions on social media platforms. Members of the public should be wary of stock recommendations on such platforms, as the recommendations may not be made with good intent or even by real individuals.”
“The Monetary Authority of Singapore (MAS) requires banks to implement multi-factor authentication to verify customer identity and authorise online transactions. MAS does not prescribe any particular technology for multi-factor authentication, so that banks can offer the authentication method that best meets their customers' preferences. Authentication mechanisms that banks offer include hardware tokens, digital tokens, and biometrics. Banks which have replaced hardware tokens with digital tokens have published customer advisories and trained their frontline staff to provide guidance to customers on the use of digital tokens. While banks like DBS, OCBC and UOB have stopped issuing hardware tokens, by default, to customers who apply for Internet banking, their customers can request for hardware tokens if they prefer this method of authentication.”
“Financial institutions (FIs) and other relevant business entities, such as traders or agents, are required by law to report suspicious transactions related to illegal wildlife trafficking (IWT). The Suspicious Transaction Reporting Office (STRO) does not publicly release detailed statistics relating to suspicious transaction reports (STRs). Enforcement action can be taken against FIs for non-compliance. The Monetary Authority of Singapore (MAS) also assesses FIs' ability to detect and report suspicious transactions in a timely manner through ongoing supervision of their anti-money laundering controls. MAS has drawn FIs' attention to relevant reports published by the Financial Action Task Force on the modus operandi used to launder proceeds from IWT. In addition, STRO proactively shares red flag indicators of IWT with banks, traders and their agents. The Association of Banks in Singapore also holds seminars and workshops to share best practices on managing the money laundering risks from IWT. Mr Louis Ng has highlighted an area of growing concern in the international community. As criminals become more sophisticated in concealing their illegal activities, combating money laundering related to IWT will require constant vigilance and close collaboration between the Government and the private sector.”
“The Payment Services Act (PS Act) came into effect on 28 January 2020. As part of the transitional arrangements, entities that were engaged in regulated activities before the commencement of the PS Act were exempted from holding a licence if they submitted licence applications before July 2020 for digital payment token (DPT) activities, or January 2021 for the other regulated activities. The exemption from licensing remains in force until the applications are approved or rejected by the Monetary Authority of Singapore (MAS) or withdrawn by the applicant. Since the commencement of the PS Act, MAS has received over 580 licence applications, of which 415 had notified MAS within the specified period and were exempted from licensing. To date, 87 applications have been approved, 11 rejected and 147 withdrawn after engagement with MAS. Around 170 entities remain exempted from licensing, whose applications are pending reviews. The list of entities exempted from holding a licence and the list of entities that are no longer exempt from holding a licence are available on the MAS website. MAS closely scrutinises all applications to ensure the quality of the risk management systems and controls of the applicant. Applications that are incomplete or unclear take longer to process. Entities may also withdraw their applications.”
“The Research Initiatives Grant under MAS' Grant for Equity Market Singapore (GEMS) scheme provides support for initiatives that seek to enhance Singapore's equity research ecosystem and improve the research coverage of companies listed on the Singapore Exchange. Since the launch of the Research Initiatives Grant in January 2019, MAS and the Singapore Exchange (SGX) have received 30 enquiries and pilot concepts, many of which were exploratory. Fifteen of them were followed through with draft applications. MAS works with applicants to determine if their proposals address existing market gaps in equity research or trading and whether the proposals have clear implementation plans. It has, to date, approved grant funding for one project and is, currently, reviewing five other grant applications. The project that was granted funding employs digital tools to help smaller SGX-listed companies improve their investor engagement. The project went live in mid-2021 and has facilitated close to 20 investor outreach events to-date. MAS continues to welcome proposals that can help enhance equity research and contribute to the growth of our public equity market.”
“The financial measures1 imposed by the Singapore Government in relation to Russia apply to all financial institutions (FIs) in Singapore, including digital payment token (DPT) service providers, otherwise known as "cryptocurrency" service providers. The Monetary Authority of Singapore (MAS) requires all FIs to ensure compliance with the measures, regardless of whether transactions are facilitated using traditional financial channels or through cryptocurrency exchanges or "decentralised finance" protocols. To guard against circumvention, these financial measures specifically prohibit DPT transactions that may be used to facilitate any prohibited activity or transaction. In short, FIs will not enable sanctioned parties to use non-traditional forms of finance to bypass the measures. Both licensed and exempted DPT service providers must have robust controls to avoid facilitating prohibited transactions. These include procedures to know their customers and the beneficial owners of customers, and to screen these persons and their counterparties. MAS has issued a circular to DPT service providers to underscore the importance of proper implementation of these controls and the need to be vigilant against potential circumvention of the financial measures. All FIs are required to demonstrate their compliance with the financial measures to MAS and are subject to MAS’ scrutiny and inspection. MAS will take appropriate regulatory actions against FIs found to have breached these financial measures.”
“Together with MSF, MAS has continued to engage individuals and groups representing PWDs and those with mental health conditions. We are also working with the insurance industry associations to provide more guidance and assistance to these individuals on their insurance purchases. For example, LIA is developing a consumer guide to raise awareness and enhance transparency of insurers' risk assessment approach towards health insurance underwriting.”
“The Monetary Authority of Singapore (MAS) expects financial institutions (FIs) to deal fairly with all their customers, including persons with disabilities (PWDs) and those with mental health conditions. Following feedback and concerns raised by PWDs, MAS and MSF have engaged insurers to ensure that they do not deny PWDs insurance or charge higher premiums unless these can be justified from a risk perspective. MAS has also carefully reviewed individual cases that have been highlighted to us, to ascertain whether insurers had treated PWDs fairly. The reviews have not found unfair underwriting practices in these cases. However, the insurers could have better explained underwriting outcomes to applicants in some instances. The Life Insurance Association Singapore (LIA) has emphasised this to their member insurers and LIA members are committed to ensuring clearer communication. Even though MAS has not found any unfair underwriting practices, MAS will codify the fair principles of insurance underwriting into transparent guidelines for insurers. Under the proposed guidelines, insurance applications from PWDs should be subject to the same underwriting policy and process applied to those without disabilities. Any differential treatment should be based on an objective assessment of information relevant to the risks to be insured, rather than just the fact of a disability per se. The scope of the proposed guidelines has since been expanded to include promoting fair and responsible practices towards a broader range of customers. This means scoping other types of FIs, transactions and customers into the guidelines. MAS expects to consult on the proposed guidelines by the second half of 2022.”
“The DBS Home Equity Income Loan is a reverse mortgage product that allows homeowners to borrow against their fully paid private residential properties. The loan proceeds will be used to top up their CPF Retirement Sums which will be used for the CPF LIFE1 scheme, allowing them to receive monthly payouts for as long as they live. Since its launch in August 2021, we understand DBS has approved most of the reverse mortgage applications it has received from eligible private property owners. We are unable to share specific data on the take-up of the product as the information is commercially sensitive. The Government offers a range of housing monetisation options. All homeowners can consider renting out the property or a room for rental income, or right-sizing. HDB owners who right-size may enjoy a cash bonus through the Silver Housing Bonus scheme. Eligible HDB flat owners can also unlock the value of their properties by selling back part of their lease to HDB under the Lease Buyback Scheme. Homeowners can access information on these housing monetisation options on HDB's website. The Government will continue to review our policies to ensure Singaporeans have suitable housing monetisation options, especially to meet their retirement needs.”
“Businesses accessing green and sustainability-linked financing generally face higher costs compared to conventional financing. The Monetary Authority of Singapore (MAS) therefore provides grants to the businesses to help them defray the additional expenses associated with obtaining an external review on the eligibility of the project being financed, or the monitoring, measurement and reporting of the borrower's progress in meeting the sustainability metrics. On the other hand, there is comparatively less friction for banks to offer green deposits or similar products. Indeed, some local financial institutions have introduced green and sustainability-linked deposit products given healthy interest from both corporate and retail segments. These include HSBC Singapore's Green Deposit Account launched in January 2020 for corporate clients to finance green initiatives, and OCBC's sustainability-linked structured deposit for retail investors launched in September 2021. There is currently no market failure or gap that requires MAS to support green deposits with grants, as it currently does for other sustainable and sustainability-linked solutions which face additional costs or other constraints.”
“At the mid-career level, the International Postings Programme encourages FIs to send promising Singaporeans on overseas postings so that they are better positioned to take on future global or regional leadership roles. At the senior level, the Asian Financial Leaders Scheme funds the participation of Singaporeans in management positions in curated leadership programmes to better enable them to navigate the diverse business, regulatory and legal environment in the region and globally. For deep specialist roles, the Financial Specialist Scholarship helps to develop a pipeline of specialist Singaporean leaders in key growth areas in the financial services sector, including sustainable finance and data science. Over the past five years, FSDF has supported almost 600 applications from FIs, amounting to S$86 million under the various talent development schemes. This has benefited close to 2,200 Singapore Citizens. The annual statistics relating to these schemes are provided in Table 2 below. On average, almost all applications received were approved, save for the Financial Specialist Scholarship where the approval rate is about 50%2.”
“The Financial Sector Development Fund (FSDF) provides grants to both financial institutions (FIs) and individuals. Some of the FSDF grants to FIs are aimed specifically at supporting the career development of individuals in the financial sector, as described below. With respect to individuals, FSDF provides course fee subsidies to Singapore Citizens and Permanent Residents, under training schemes administered by the Institute of Banking and Finance (IBF). These training programmes help to equip them with skills required to keep pace with the dynamic nature of the financial sector, especially in areas, such as digitalisation, sustainable finance and cybersecurity. Since 2017, FSDF has disbursed S$188 million of course fee subsidies to about 176,000 individuals, of whom 153,000 (or 87%) were Singapore Citizens. Grant funding for individuals increased significantly in the past two years1, as more individuals enrolled themselves in IBF-accredited training programmes, notably in areas like cloud computing, data interpretation and compliance. The annual statistics relating to schemes providing course fee subsidies are provided in Table 1 below. All claims received were approved. With respect to FIs, FSDF provides grants to help develop Singapore Citizens in the financial sector at different stages of their careers. At the pre-entry level, the Work-Study Support Programme provides funding support to FIs which offer internships to Singaporean students to acquire work experience and work-relevant skills. At the entry level, the Finance Associate Management Scheme supports the hiring and training of fresh Singaporean graduates and early career convertees from other sectors through structured talent development programmes.”
“This, potentially, puts investors at risk of outsized losses should speculative fervour abate. Further, there are significant legal complexities and risks involved in NFTs. For example, a holder of an NFT with an underlying asset of a digital image should clarify his right of ownership and the legal framework that governs his rights. MAS continues to monitor developments in the digital token space, including NFTs.”
“Non-fungible tokens (NFTs) are a form of digital token, where each token has distinct and unique features that are verified and secured by blockchain technology. NFTs are still a relatively new development in the technology space. While NFTs can be used to represent any underlying asset, they have for, now, been mainly used to tokenise digital art and other collectibles. MAS does not and cannot possibly regulate all things or products that people choose to invest their money in. We consider the substance of an asset when assessing whether a product or activity should come under MAS’ regulatory remit. MAS does not currently regulate NFTs, given the nature of their underlying assets, such as the few examples earlier. This is also the stance taken by most other leading jurisdictions. More fundamentally, with regard to digital tokens, such as NFTs, MAS takes a tech-neutral stance and “looks through” to the underlying characteristics of the token to determine if it is to be regulated by MAS. Should an NFT have the characteristics of a capital markets product under the Securities and Futures Act (SFA), it will be subject to MAS’ regulatory requirements. For example, should an NFT be structured to represent rights to a portfolio of listed shares, it will, like other collective investment schemes, be subject to prospectus requirements, licensing and business conduct requirements1. MAS would like to remind consumers that investments in digital tokens, including NFTs, are not suitable for retail investors. We have, on several occasions, put out advisories urging consumers to exercise extreme caution when investing in them. For NFTs, in particular, their perceived uniqueness, combined with speculative demand, has served to inflate prices.”
“These questions have been addressed as part of the three Ministerial Statements to be delivered by Minister for Finance and Deputy Chairman of MAS, Lawrence Wong; Minister for Communications and Information and Minister-in-charge of Smart Nation & Cybersecurity, Josephine Teo; and the Minister of State for Home Affairs Desmond Tan at today’s Sitting.”
“In the past two years, applications for fund management licences have seen an uptrend, in line with the growth of the sector. The number of applications grew by 14% in 2021 to almost 300 applications. Application growth was 33% in 2020. MAS has and will continue to enhance the application experience where possible, by simplifying and automating the process, and factoring in market feedback.”
“The processing times for applications to conduct fund management activity in Singapore depend on the specific licence type, the proposed business models, the profiles of the applicants, as well as the quality of the submitted application. The time taken to process a Licensed Fund Management Company or a Registered Fund Management Company application ranges from one to 10 months, with an average of five months. The time taken to process a Venture Capital Fund Management application ranges from one to six months, with an average of three months. Applicants may face longer processing times and additional engagements with MAS due to the following reasons: (a) Incomplete, inconsistent or erroneous submissions; (b) Insufficiently concrete or credible business plans; (c) Adverse records on key personnel, such as the chief executive officer, directors and investment professionals, that were not adequately addressed or disclosed; (d) Insufficient relevant experience of key personnel to carry out the proposed activities; and (e) Significant conflicts of interest with the business interests of key personnel. To aid applicants in the process, MAS has put up on its website, reference guides for licence and registration applications. These guides provide details, such as admission criteria, information required in the application, and factors that MAS focuses on when assessing different types of business models. MAS also publishes an annual licensing and registration report that shares average processing times, factors that lead to extended processing times, as well as broad reasons behind unsuccessful applications. Our fund management industry is growing well.”
“This is a balance that we always consider in regulating the capital markets, and it depends on the overall risks and safeguards. The various regulatory safeguards and educational efforts outlined above should provide adequate protection for retail investors and enable them to assess the risk-return trade-offs and make informed investment decisions. Restricting retail participation in SPACs, which goes beyond the afore-mentioned safeguards in SGX rules, will curtail retail investors’ access to new investment opportunities. It may also have unintended effects. For instance, investors may seek out unregulated alternative investments and take on even more risks. We will continue to assess if any of the safeguards need to be adjusted over time. Investors, on their part, should ensure they understand the unique features and risks of SPACs and carefully assess whether SPACs are suited to their risk appetite and investment objectives before investing.”
“In fact, in a number of areas, SGX has imposed stricter requirements than other jurisdictions with SPAC frameworks. For example: (a) sponsors have to maintain a minimum level of equity participation in the SPAC; (b) sponsors have to retain their shareholdings until at least six months after acquisition; (c) in putting the acquisition of the target company for approval by the SPAC’s shareholders, the sponsors are prohibited from exercising the voting rights attached to shares obtained from their fees; and (d) there are hard caps on the amount of shares that sponsors may receive and on the maximum dilution that can arise from warrant issuances. In addition, SGX has partnered the Securities Investors Association (Singapore) (SIAS) to ensure that independent research on the target company will be made available to investors when a SPAC puts forward an acquisition proposal. Investors will need to decide whether to vote for the acquisition to take place, and, if the acquisition proceeds, whether to redeem their shares or to remain invested. The research reports will help investors analyse the various scenarios, the courses of action available to them and the related factors to consider. SGX has also been mounting education efforts to help retail investors develop a better understanding of the key features and risks associated with SPACs. These efforts include collaborating with SIAS to conduct online webinars, making available comprehensive educational materials about SPACs on the SGX website, and working with various stakeholders to put out educational articles, including on social media platforms. Ms He Ting Ru also asked if restrictions should be placed on retail investors’ access to SPACs' IPOs.”
“The Singapore Exchange’s (SGX) listing framework for SPACs includes safeguards to protect investors’ interests against the risks posed by the unique features of SPACs. The framework was introduced after an extensive public consultation with a range of stakeholders, including market professionals, industry associations, members of the public and potential SPAC founders. SPACs provide an alternative capital-raising avenue for enterprises, offering them faster time-to-market while providing investors with access to early stage investments typically available only to professional investors. Unlike a traditional company, a SPAC has no prior operating history or revenue-generating businesses at the time of listing. The SPAC’s founding shareholders (typically referred to as the sponsors) will use the capital raised to acquire an operating business within a specified period of time. Investors would, typically, invest in a SPAC IPO based on their assessment of the SPAC sponsors’ ability to identify and acquire a good quality target company. Once a target company is identified, SPAC investors get to vote on whether the acquisition should be made. The characteristics of SPACs could pose a number of specific risks to investors. First, sponsors may push ahead with a less than ideal acquisition in order to be entitled to fees for completing the acquisition. Second, investors’ interests could be unduly diluted if the sponsor’s fees, which, typically, take the form of shares in the SPAC, are excessive. Third, warrants that are issued alongside IPO shares may also cause further dilution for investors. In view of these risks, SGX’s SPAC framework has a number of safeguards.”
“These questions will be addressed as part of the three Ministerial Statements to be delivered by Minister for Finance and Deputy Chairman of MAS, Lawrence Wong; Minister for Communications and Information and Minister-in-charge of Smart Nation & Cybersecurity, Josephine Teo; Minister of State for Home Affairs, Desmond Tan, at tomorrow's Sitting.”
“As private consumption declined by 15%, the personal saving rate rose to a historic high of 41% last year. The personal saving rate has started to ease, coming down to 36% by Q3 2021. With the economic recovery underway and confidence returning, households have begun spending more. However, given lingering uncertainty associated with the ongoing COVID-19 pandemic, it will take some time for saving rates to get back to pre-pandemic levels of below 30%. Over the longer term, however, the ageing of the population will be the larger driver of trends in household saving.”
“Household net wealth is estimated to have increased by 34% between Q4 2017 and Q3 2021 (latest data available). While both household assets and liabilities have grown, assets have grown faster than liabilities. The increase in household assets has been driven by both residential property assets and financial assets. Some 42% of household assets as at Q3 2021 are held in residential assets and the remaining 58% in financial assets. Household liabilities are mainly accounted for by mortgage loans. Mortgage loans have picked up amid the buoyant property market, increasing by almost 5% in the last year. The latest property cooling measures, which included a tightening of the total debt servicing ratio threshold (TDSR), should encourage financial prudence. Annual personal1 saving increased by 58% from $67 billion in 2017 to $106 billion in 2020. Two factors have been important. First, wages have risen steadily over the years, increasing the disposable income available to households. Second, as our population is maturing and actively saving for retirement, private consumption has grown at a slower pace than the growth in incomes. The personal saving rate has hence increased to 29% in 2019 from 22% in 2011, contributing to the overall increase in annual personal savings. In 2020, personal savings picked up sharply, reflecting a decline in consumption amid heightened economic uncertainty. Households’ opportunities to spend were also constrained by travel and safe distancing restrictions. At the same time, government fiscal measures that preserved employment such as our Jobs Support Scheme and direct transfers to households such as Care and Support cash payments, ensured that personal disposable income still grew by 1.3% despite the severe economic downturn.”
“The Total Debt Servicing Ratio (TDSR) threshold was adjusted from 60% to 55% as part of the package of cooling measures which took effect on 16 December 2021 to promote a stable and sustainable property market. The intent of the tightened TDSR threshold is to help moderate demand, especially in the private property market and encourage financial prudence among home buyers. The TDSR framework only applies to loans granted by financial institutions (FIs), including those extended to HDB flat buyers. The number and proportion of private housing and HDB flat buyers who had a TDSR of above 55% are shown in Table 1. Only 3% of HDB flat buyers taking up a mortgage loan from FIs in 2020 have TDSRs of above 55%. However, about two-fifths of those borrowing to purchase private property – which includes those doing so for investment purposes as well as owner-occupiers – have TDSRs of above 55%. The new TDSR threshold will nevertheless encourage a significant number of prospective private property buyers to right-size their intended purchases and mortgages and will enable them to better service their debt obligations particularly as interest rates rise in future.”
“MAS requires financial institutions (FIs) to have robust systems and processes to ensure reliable delivery of services to their customers. In the event of a disruption, FIs are expected to restore the affected system as swiftly as possible and activate contingency measures to ensure continued delivery of financial services in the interim. MAS also expects FIs to have a sound process to deal fairly with appeals from customers who may have suffered penalties or losses arising from a disruption in online banking services and monitors how FIs handle such appeals. FIs should carefully consider the circumstances of each case, taking into account factors such as the severity and length of the service disruption, the nature of the relevant financial transactions and whether the customer had taken reasonable steps to access the alternative transaction channels that were available. For example, if a credit card repayment to the bank was late because of a disruption, the consequent penalties should be waived by the bank. Depending on the circumstances, there may also be grounds for compensation for losses arising directly from the disruption. With the delivery of financial services becoming increasingly digital, MAS has been reminding FIs to pay even more attention to ensuring their systems are resilient. But it is not possible to rule out all disruptions in the online space. Consumers who need to make time-critical payments regularly may want to consider maintaining accounts at more than one FI to facilitate such payments when systems are disrupted.”
“Notwithstanding progress on these fronts, we are deeply concerned with the recent uptrend in online scams and the financial losses suffered by unsuspecting customers. MAS is working with banks and payment institutions to explore additional measures to mitigate the risk of scams, without impairing the speed and convenience of payments that customers expect and would want for legitimate transactions. A cooling-off period is among the measures we have been considering, to see if it could be a practical way to avoid certain types of scams. We are also exploring other measures even further upstream in the chain of transactions, including lowering default transaction limits and notification thresholds, and enhancing fraud surveillance systems to detect and block anomalous transfers more promptly. There will also be a public consultation on the recommended measures, to provide clarity on the responsibilities of financial institutions and consumers to protect e-payments, as well as liability apportionment principles in the event of fraudulent transactions. The tactics employed by scammers will continue to grow in sophistication. Each of us has to exercise utmost caution when transacting online. Never pursue online deals that appear too good to be true. Never click on unverified links. Never divulge your Internet banking credentials or passwords to anyone. Closely monitor transaction notifications so that any unauthorised payments are reported early enough to increase the chances of recovery. We can address the scourge of scams if all of us are on guard and play our part.”
“MAS takes the issue of scams involving online banking accounts very seriously and is working actively with other Government agencies and the banking industry to address the problem. There has been a rising number of such scams and frauds. Most recently, many customers of one of our local banks were tricked into divulging their Internet banking credentials to scammers, who were then able to siphon funds out of the customers’ bank accounts. The banks have been issuing repeated warnings on their digital platforms about such scams, but the scams have become more sophisticated and more bank customers have fallen prey. We are coordinating our efforts to address this growing threat through the Inter-Ministry Committee on Scams. One key area of progress has been the strengthening of funds recovery for victims of such scams. The Singapore Police Force (SPF) works with banks in Singapore to freeze, within one day, domestic bank accounts receiving scam monies. As was implied in the question from Assoc Prof Jamus Lim, the freezing of overseas accounts is more challenging as it involves agencies in different jurisdictions. But, of late, there has been some progress in this area. For example, between June and December 2021, through strong information-sharing and collaboration by SPF and its international law enforcement counterparts, 16 transnational syndicates perpetrating job scams, Internet love scams and impersonation scams were busted by the Royal Malaysian Police and the Hong Kong Police Force. I understand that MHA will be providing more information on the efforts by the Inter-Ministry Committee on Scams and on SPF’s initiatives, in response to the Parliamentary Question by Mr Christopher de Souza scheduled for the 11 January Sitting.”
“The other trust company, Trident Trust Company (Singapore) Pte Ltd, was directed by MAS in September last year to remediate weaknesses detected in its risk assessment controls during MAS’ supervisory surveillance. Both companies were under intensified scrutiny by MAS before they were mentioned in the Pandora Papers. Let me assure this House that Singapore takes the integrity of our financial sector very seriously. As a major international financial centre, Singapore will always face the risk of illicit financial flows. What is important is that we supervise our FIs well, and take strong enforcement actions where necessary to reduce this risk as much as possible. MAS has been doing this and will continue to do so.”
“Some ICIJ media reports also mentioned that many of these individuals had foreign bank accounts linked to these structures, in various financial centres including Singapore. Based on MAS’ assessment and information available thus far, the Pandora Papers have not raised significant concerns over the money laundering and counter terrorism financing (AML/CFT) controls of our FIs. Nevertheless, MAS is engaging the relevant FIs to assess if tightening of controls are warranted. As ICIJ itself is careful to acknowledge, there are legitimate reasons to set up offshore structures, such as for investment and estate management. However, offshore structures often lack transparency and are thus vulnerable to abuse for illicit activities. Hence, MAS has clear requirements for FIs in Singapore to identify and verify the identities of persons who are beneficial owners or effective controllers of their customer accounts. FIs must understand the reasons for the use of such structures, take measures to ascertain that the assets held in these structures are not illicit, and scrutinise any unusual transactions as part of their ongoing monitoring of the account. MAS also supervises the FIs to ensure that their boards and management have implemented robust controls against money laundering and terrorism financing. Where there are breaches of AML/CFT requirements, MAS has taken strong enforcement action. In fact, both the licensed trust companies in Singapore mentioned in the Pandora Papers have already been subject to MAS’ supervisory or enforcement actions. One of them, Asiaciti Trust (Singapore) Pte Ltd, paid a composition penalty of $1.1 million imposed by MAS in July last year for its failure to implement adequate AML/CFT policies and procedures.”
“Mr Lawrence Wong, Deputy Chairman of MAS and Minister for Finance has responded to all the Parliamentary Questions (PQs) related to the recent disclosure by the International Consortium of Investigative Journalists (ICIJ)1 of confidential information, dubbed the “Pandora Papers” together at today’s Parliament Sitting. This includes the: (a) Oral PQs from Dr Lim Wee Kiak and Mr Patrick Tay filed for today’s Sitting; (b) Written PQ from Miss Cheryl Chan Wei Ling filed for today’s Sitting; (c) Oral PQ from Mr Murali Pillai filed for yesterday's Sitting. As a global financial centre, Singapore intermediates a large volume of fund flows for investment or commercial purposes, and also provides services in financial asset management. While the vast majority of these activities are carried out by law-abiding individuals and companies, we are constantly on guard against the risk of illicit financing activities. The Monetary Authority of Singapore (MAS) continually monitors and analyses information from a wide range of sources as part of its surveillance of money laundering and terrorism financing risks. This includes suspicious transactions reports filed by our financial institutions (FIs), information from intelligence sources, including those abroad, and publicly available information such as from independent investigations and media reports. MAS therefore takes seriously the recent disclosures in the Pandora Papers. The ICIJ has reported that 336 prominent individuals from around the world had established offshore structures to hold assets2, assisted by 14 service providers operating in at least 38 jurisdictions3. Two of the 14 service providers are foreign-incorporated trust companies with subsidiaries in Singapore that are licensed and regulated by MAS.”
“MAS, together with the Singapore Police Force and the financial industry, will continue to look into measures to help consumers defend themselves against scams.”
“There is no facility to enable an individual to stop outbound fund transfers from the bank accounts of family members whom they suspect may become victims of scams. Banks, generally, act only upon the instructions of the account holder unless he has provided written consent and mandated another person to operate the account on his behalf. This is to protect the rights of the account holder. But Mr Gerald Giam also asks how family members can help one another avoid becoming victims of scams. Anyone who suspects that a family member has been a victim of a scam, or is being targeted by scammers, should advise the family member to contact his or her bank and make a Police report. In the event that the suspected victim does not agree to do so, the concerned family member can contact the Singapore Police Anti-Scam Hotline, where trained staff are available to provide independent advice to the suspected victim. We can help our family members to take pre-emptive measures to better protect themselves. We can share with them information and other resources on scam prevention. The National Crime Prevention Council (NCPC) has a dedicated website – scamsalert.sg – which provides useful tips on how to identify and avoid falling prey to scams, as well as a mobile application – ScamShield – which will block scam calls based on a list of numbers maintained by the Police. We can also discuss with family members the banking facilities they require for daily use and advise them to protect their accounts by setting appropriate transaction limits and lowering transaction alert thresholds. These are basic measures that can help them stay alert to unauthorised transfers and limit their financial losses in the event of an unauthorised transaction.”