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.”
The complete record
Every one of 2,416 lines we hold for Tharman Shanmugaratnam, in date order, each linked to its source. Free to read, in full, without an account. Page 40 of 49.
“We should also not have unrealistic expectations of our children's abilities and push them so hard that they lose all joy in learning. There are encouraging signs. A growing number of parents are looking at success in education more broadly than by examination performance alone, just as schools are recognising more diverse measures of success. Parents are helping their children find their own strengths and selecting schools that can best develop those strengths. We will keep up our communication with parents so that they support the schools' efforts to give children a holistic education and provide room for them to pursue the things they have a talent in or enjoy doing. Dr Michael Lim asked specifically whether schools will keep parents informed of changes in the school syllabus before the start of the year. Our syllabi are posted on the websites of MOE and the Singapore Examinations Assessment Board. Syllabuses of the various examination subjects are also updated on the Internet for the public to access at the start of the year. And schools also keep parents and pupils informed on the parts of the syllabus to be assessed. I will now turn to issues raised by Members concerning character development. Let me first address the specific point raised by Mr Gan Kim Yong on students who drop out, before I move on to the broader issues that he and others raised on character building. Mr Gan wanted the Ministry to be more lenient in re-admitting students who had dropped out. Fortunately, our drop-out rates are low. And the majority of those who left school because they were expelled or for other reasons, and who want to return to school, are able to do so.”
“Schools are also reassessing the number of tests and examinations that they conduct. Tests and examinations have an important role to play in giving both teachers and students a sense of how they are progressing, and in motivating our students to go over what they have been taught to make sure they have understood it. But an excessive focus on examinations tends to narrow teaching and learning. It discourages students from venturing beyond what might be tested. Many schools have gone ahead to experiment with different approaches to assess how pupils are progressing, particularly in the primary school years. Ms Eunice Olsen had asked during the Budget debate whether MOE would consider removing examinations for Primary 1 and 2. These are decisions which the schools will have to make. This year, two-thirds of our primary schools have decided to remove at least one of the two continuous assessment (CA) tests that they had conducted for Primary 1 students. Many have done likewise at the upper levels. Most schools have retained their mid-year and year-end semestral examinations in order to get timely feedback on student performance. I agree fully with Mr Gan Kim Yong and Dr Lily Neo that we have to keep up communication with our stakeholders, especially our parents, as we proceed with changes in education. We will keep doing this, first and foremost, through our schools themselves. We will also continue to use the media and MOE information booklets like the one we have just distributed. We want parents to know where we are heading, and how they can help their children and guide them in making choices in education. Parents should not equate large amounts of homework and frequent tests with effective learning.”
“We will focus on the quality of learning, quality of CCA and community engagements and the quality of the whole school experience that the student goes through. We will seek to cut back on quantity, careful and calculated cuts, so as to provide more "white space" in the curriculum, space which gives schools and teachers the room to introduce their own programmes, to inject more quality into teaching, to reflect more, to have more time for preparing lessons and to give students themselves the room to exercise initiative and to shape their own learning. We are reviewing this thoroughly in MOE and in our schools. We are working towards a 10-20% cut in our secondary school syllabuses in 2007-2008, similar to what we will do in the new JC curriculum from next year. We will do this judiciously. I absolutely agree with Dr Tan Boon Wan that any cuts should not undermine the core knowledge and skills that our young should have, or lead to an erosion of an ethic of hard work. And I should clarify that our objective is not to reduce stress per se. Our objective is to redistribute the load that students currently occupy themselves with, from an excessive focus on the academic and on examinations towards a broader focus consistent with our holistic aims in education. Our schools are moving ahead with their own initiatives. Victoria Junior College decided this year to shorten teaching periods and end school an hour earlier each day, to signal students the importance of engaging in their own learning. They also created on-line discussion forums instead of regular General Paper lessons to encourage students to express their views freely. They now find that, on their own, students participate more actively in the on-line discussions.”
“45 pm Mr Gan Kim Yong and Mdm Ho Geok Choo also spoke about the need to cater to students with special needs in our schools. We will continue to find ways to provide them opportunities, encourage and spur them on, and to help them reach the full potential. We have committed $220 million by 2008 to improve the special education schools and accelerate the redevelopment of nine existing special education schools. And we are looking at new ways to include certain groups of special education children within mainstream schools. My colleague, MOS Chan Soo Sen, will elaborate on this later. MOE shares Members' views on the importance of character building, as part of the holistic education that our children should get. We want to give them a broad range of experiences as they grow up which provides them with the opportunities to develop character, to learn critical life skills and imbibe values. To provide this, we have to do less of some things in education. The system is already full to the brim. So if we want to provide more space for character education, sports participation, independent learning or research, we have to reduce some other things that we do in education. Otherwise, we are overloading our schools and teachers, and run the risk of turning off our students. We, therefore, have to make careful choices on what to take out as much as what to put in. And as we do so, we have to avoid eroding the core strengths that have got us here. We have to achieve a new balance in education that provides broad-based holistic education for our students without compromising the rigour of learning in school that prepares our students well for post-secondary education wherever they go. Our basic approach, as we go forward, is to go for more quality and less quantity.”
“It is most clearly evident amongst our secondary schools and junior colleges, but now our primary schools are also developing distinct strengths in diverse areas, from sports and arts, to outdoor adventure, and in the way we are bringing IT into teaching and learning. This is a new phase of diversity that we have embarked on. It is diversity that will be built on a common commitment to a high quality core curriculum that every primary school will deliver to prepare every child well for secondary education. We have just awarded 16 primary schools additional resources, up to $100,000 a year, to develop their own special strengths under the Programme for School-based Excellence. We will scale the number up in the coming years as more good proposals come through for schools wanting to develop niche programmes. We are also recognising more diverse strengths amongst students, beside their performance in national examinations. This is an important step in education. Last year, we introduced the discretionary school admission system for our integrated programme schools which were given the flexibility to take in students on their own merit-based criteria. This year, we will be extending the discretionary scheme to our independent schools, our autonomous schools, other schools with well-established niches and our junior colleges for between 5-20% of their total intake of students. This will take place at the end of this year for admission 2006. Mother tongue language learning is also being reformed to help students develop an abiding interest in the language. We have been making refinements to our system of ability-based education by introducing more flexibility within the streaming system. 2.”
“There have been several changes in our education system in recent years. There are not too many and they are not taking place too soon. If we do not keep evolving, as Mr Gan Kim Yong put it, our children will grow up unprepared for the world - a fast changing world. In the leading Chinese cities, major changes are taking place in curriculum every year, even in the learning of the Chinese language and in the way the schools and universities are being freed up to pursue new paths. They are looking outwards, taking ideas from around the world and implementing them quickly. In the UK, Germany, Japan and the US, there is great dissatisfaction with the state of schools, and the desire to move ahead with reforms. But their problems are complex, the ideological currents often run deeper and their teachers are often organised to oppose reforms. So our ability to move ahead with educational reforms in Singapore is a major advantage - our ability to revise the curriculum, to keep it relevant, to train our teachers, recruit new ones and to let some schools run ahead with the new models of education. The recent changes in our schools are summarised in the blue booklet that Members might have picked up before the debate. But the thrust of the changes and refinements we are making in education can be summarised in two words - opportunity and flexibility. Across the system, we are opening up more choices, more doors and paths to help our young discover their talents and develop them as far as we can. That is the essence of what we are doing, and we will keep communicating this to parents and students so that they understand the options being put before them and which are open to them. Our schools now provide far more diverse opportunities than they did five years ago.”
“Sir, first let me thank the Members who have spoken so far for their constructive comments and the broad support that they have expressed for the directions that we are pursuing in education. I should also thank them for the passion that never escapes a debate on education in this House, a passion that is really not surprising because, as Mr Gan Kim Yong has said, children are our key asset in Singapore. So, if we prepare them well, if we help them each to discover their own strengths and talents, and nurture in them the qualities they need to do well in life and to play a responsible role in the community, we will be preparing Singapore well for the future. Mr Gan, together with Dr Tan Boon Wan, Dr Lily Neo, Dr Ong Seh Hong, Mdm Ho Geok Choo, Mr Zainudin Nordin and Dr Loo Choon Yong, had a common theme in their comments. They all spoke about the need to develop our students holistically. I agree with them that education is much more than about grades. The knowledge that our students acquire in school, and are tested on, is important. It is often the building block for future knowledge and learning. But more important is to nurture an enquiring spirit, a certain zest for learning that carries them through life. And just as important, we want our children to be imbued with sound moral and social values - especially the compassion and respect for others that make for a cohesive society - and to develop the strength of character that allows them to ride over difficulties and live life to the fullest. Values and character development have always been integral to the education our schools provide and are now more relevant than ever. So I fully agree with Members who have spoken about the need to keep in focus these broader dimensions in education.”
“The profit forecast is not a requirement for a prospectus, Sir. Where a company chooses to project a profit forecast, then there is a set of regulations governing what you could include. The issue manager has to certify that the directors have made the profit forecast on a reasonable basis, the auditor has to also certify that proper assumptions were used behind the profit forecast and so on. But it is not a requirement of a prospectus that you must put in a profit forecast. I would be happy to get further information from Mr Inderjit.”
“Miss Penny Low had, I believe, also asked about mortality tables used in ILPs and other insurance products. The common market practice is for such mortality tables to take account of local mortality experience. This means that they factor in changes in local population life expectancy, as well as the mortality experience of insurers' own portfolio when they review their mortality tables. The insurers review their mortality tables from time to time. But it takes several years. It takes several years for insurers, not just here, but around the world, to gather sufficient information to update mortality tables, and given the relatively small population in Singapore, this is not something they would want to rush. The bottomline is that consumers should buy financial products that suit their needs. If they are unsure about their policies they should seek professional help from a financial advisor, especially when considering complex products such as ILPs. A competent advisor should be able to help consumers to analyse their needs and explain the ILPs' features and risks and analyse whether an existing ILP is suitable for the consumer.”
“Whether for car loans or renovation loans, MAS expects financial institutions to adopt prudent lending practices and to use fair valuations when granting loans. 4.45 pm Further, whether it is for HDB property purchases or renovations or car purchases, Singaporeans should also be aware that making false declarations of the purchase price to obtain a bank loan, may constitute a cheating offence. Middlemen who instigate or aid in such practices may also be guilty of the offence. As far as insurance policies are concerned, cash rebates are not prohibited by MAS in the sale of insurance policies. However, MAS has market conduct requirements under the Financial Advisers Act that governs this. Financial advisers and their representatives must make recommendations that are reasonable and appropriate to the needs of their clients. They should not use cash rebates as a basis for their recommendations in the sale of investment products, including life insurance policies. The CPF Board requires insurers to return any cash rebates given to CPF members for the purchase of insurance policies under the CPF Investment Scheme to the member's CPF account. On investment-linked policies (ILPs), MAS does not set charges for investment-linked insurance policies or for any other financial products. These are commercial decisions that are best left to the market. But we do require insurers to disclose clearly all charges and the underlying charging mechanism. These include the mortality charges, the use of the offer price for creating units owned by the person purchasing the policy and the bid price for unit cancellation, so that policy holders could make informed decisions. In practice, insurers include the mortality tables and the product summary in the policy contract.”
“For institutional investors, we have to operate on the premise that they are sophisticated enough to know what their interests are and be able to scrutinise the information provided by fund managers, particularly with the improved disclosure regime that we have in place. But it is something which we can consider, whether the Investment Management Association of Singapore (IMAS), working together with the Wealth Management Institute (WMI), can organise seminars for institutional investors to help them evaluate fund managers, ie, how you go about selecting a fund manager. In the process, they will probably get a greater depth of understanding of what risk management entails, why fund managers need to go through the full work of evaluating risks and charging fees for various processes and be able to distinguish good fund managers from fund managers that merely have a low fee. It is something that we can look into. I am not sure if the WMI is particularly well-suited for it because its principal purpose is to train fund managers - to develop a strong pool of trained professionals. But we could look into encouraging WMI to work together with IMAS to develop a seminar for institutional investors. Finally, I move on to Miss Penny Low's question on cash-back schemes, particularly for renovation and car loans. This is different from cash-back in the case of HDB purchases. In the case of HDB purchases, cash-back concerns the CPF Board because individuals are taking their money out of their CPF. The CPF Board has taken action to prevent premature withdrawal of retirement funds. In the case of renovation and car loans, you cannot use CPF funds. The concern is a more general one about making sure that Singaporeans are able to service their loans.”
“I think Miss Penny Low is familiar with that. We will do more of this in 2005. We are currently working with the CDCs and relevant community groups to develop customised financial education programmes and will start discussions with the VWOs as well. For the MoneySense programme to be effective, it must be a long-term sustained effort involving collaboration between the public, private and people sectors. The $3 million that we have set aside to co-fund MoneySense programmes for the first three years is really seed money to kick-start the national financial education programme. We keep our eye out especially for schemes that help to build lasting capabilities within the community, for instance, schemes that "train the trainers", or schemes that involve follow-on sessions that Miss Penny Low has mentioned. These are things that we keep an eye out for. Co-funding is currently provided for up to 50% of net qualifying expenses. Miss Penny Low had asked whether we could provide a higher percentage for certain types of schemes, for instance, aimed at the low-income families. We are willing to consider that. Perhaps up to a certain dollar cap, we should be willing to provide a higher percentage of funding. Next, I move on to Mr Arthur Fong's question on fund management, or about the fund management industry feeling that local corporations are obsessed with fees and expense ratios and not paying enough attention to investment strategies, and so on. Our attitude has to be to let the market work well, but ensure that there is adequate financial education. In case of retail investors, we have the MoneySense programme and we are ramping that up in steps.”
“It is a steering committee that oversees the programme as a whole, comprising public sector agencies, but we have to work with the industry to provide the content. This Steering Committee has put in place procedures to ensure that any programme endorsed by MoneySense remains objective and does not serve to promote specific commercial interests. We do not provide funding for programmes that aim to endorse or promote any specific financial institution or prop up membership schemes. In fact, 75% of the funding that we have given over the last year has been for basic financial education, what we call Tier 1 basic money management, or Tier 2 basic financial planning, rather than education on specific investment tools and techniques. But I agree with Miss Penny Low that financial education can be most effective where it is tailored to the needs of specific target groups. We need a variety of approaches. There is some use in general public education aimed at ensuring that Singaporeans have the basic skills of budgeting and saving for the long-term and that they understand the basic risks involved in investment. But we also have to customise our programme for specific groups in the population, whether for school children, elderly folk or low income families. In fact, a lot of the MoneySense activities involve close collaboration with consumer organisations, such as CASE, the CDCs as well as Residents' Committees, to reach out to targeted groups with different needs. Last year alone, MoneySense partnered the CDCs to organise more than 80 talks and workshops for the public. Many were customised to the needs of specific groups of people. For example, workshops were organised for families on financial assistance schemes and for single parents.”
“As Dr Ahmad Magad rightly pointed out, whether it is conventional or Islamic financial services, whether it is one set or separate sets of regulatory frameworks, the same prudential principles will apply - solvency, liquidity, prudent credit practices and corporate governance. The same principles in these areas will apply. Dr Ahmad also raised the issue of Islamic bonds or sukuks. I quite agree that more companies could be encouraged to issue Islamic bonds or sukuks. There is a growing pool of Islamic investment funds out there and a growing demand for Islamic products internationally. There is a good opportunity for non-Islamic issuers to tap on these funds to diversify their investor base. The German State of Saxony Anhalt, for example, has issued a sukuk. Debt teams within banks in Singapore can take the opportunity to encourage both local and foreign issuers to raise capital for sukuk. This is why in the recent Budget, the Government has given the same concessionary tax treatment to pay out from Islamic bonds as is currently granted to interest arising from conventional bonds. This incentive can help to make sukuks that are issued here more attractive to investors. Next, I move on to Miss Penny Low's question on MoneySense. Miss Penny Low has raised a few questions. First, whether the role played by industry associations in the programme will compromise its objectivity. We work closely with industry to develop the financial education content in the MoneySense programme. But the programme is driven by the Financial Education Steering Committee which comprises various public sector agencies - MAS, CPF Board, MCYS and so on.”
“In fact, Islamic financial products, such as Islamic deposits, Islamic funds and takaful insurance are already offered in Singapore under our existing regulatory regime. MAS is quite open to admitting reputable Islamic banks which meet our prudential and licensing criteria to set up in Singapore or, for that matter, other reputable banks offering an Islamic window. But our basic approach is to make refinements to our regulations, rather than fundamental change or to set up a separate or new regulatory framework specifically for Islamic banking. We also do not currently see the need for a national Syariah Council for the purpose of Islamic financial services. Most of the leading players in Islamic financial services have their own internal Syariah Councils or they refer to the Syariah Councils of their clients. Since most of their clients for Islamic financial services are likely to come from the Middle East or from the region around us, they are likely to refer to their domestic Syariah Councils. This approach that we are taking is, in fact, broadly similar to what the UK has done, ie, accommodating both Islamic and conventional banking within the existing regulatory framework without establishing new infrastructure or a national Syariah Council. The UK's first fully fledged Islamic bank, Islamic Bank of Britain, is regulated under the same framework as conventional banks and operates under the guidance provided by the bank's internal Syariah committee. It has been a successful approach so far and many Middle Eastern financial players and Middle Eastern clients are quite comfortable using London as a financial centre.”
“That is almost the same number as the number of local companies listing on the main board in the last two years. Neither SGX nor MAS requires a profit forecast to be issued by companies in their IPO prospectuses. But if companies wish to provide forecast, then of course, they need to comply with the regulations that are issued pursuant to the Securities and Futures Act. The idea of a mezzanine fund along the lines of the SBIC in the US is an interesting one. I understand SPRING Singapore is studying that. They are working together with MAS and other agencies to see whether it is viable and whether it provides a useful complement to existing financing schemes. Next, I move on to Dr Magad's question on Islamic banking, or Islamic finance more generally. Islamic finance is growing globally, at quite a fast clip. We expect that growth to be sustained. We are looking into how Singapore can service this market. But I should add that the larger opportunity for the financial industry in Singapore is the Middle Eastern market, of which Islamic finance is only a component. In fact, the feedback we get from financial players indicates that the bulk of Middle Eastern wealth is managed through conventional and traditional routes rather than Islamic financial instruments as such. So we are looking with a broader perspective into how we are able to service the Middle Eastern market. MAS is reviewing the appropriate regulatory framework for Islamic financial services and has been seeking the feedback of the industry. The initial feedback is that our regulatory framework does not impede the provision of Islamic financial services.”
“MAS has, in recent years, allowed the better-managed and financially stronger finance companies greater flexibility in servicing their SME customers, such as in unsecured lending and corporate finance advisory services. We are prepared to allow selected finance companies to further expand their scope of services on condition that they have adequate expertise, internal controls and risk management procedures. Mr Inderjit Singh also raised the issue of listings on the SGX and whether SGX's criteria are too stringent. As Mr Inderjit Singh is aware, SGX revised its listing rules in September 1999 to allow a wider spectrum of companies, with different financial and operating characteristics, to list on the main board. Previously, it used to be three years of a solid profit record. The revised criteria allow companies with a shorter track record of profit to be listed. We also allow companies without a profit record, but with significant market capitalisation, $80 million or above, to be listed on the main board. The main board's criteria are a little less stringent than most foreign exchanges when it comes to the market capitalisation requirements, a little more stringent when it comes to the profitability criterion - more stringent, for instance, than Nasdaq. But Sesdaq exists, and Sesdaq was set up for this purpose of providing an alternative channel for companies without a profit record, or even without a track record, to raise capital. What the applicants need to do is to demonstrate that they are engaged in a business that is expected to be viable and profitable, with prospects for future growth and expansion. Sesdaq is the growth market. And it has not done too badly. In the last two years, it had 60 listings, almost all local companies.”
“That's an example of an initiative that is bringing in more capital to SMEs and to the market than would normally be possible through banking channels. 4.30 pm I agree with Dr Magad that there is a role for more specialist players in the SME financing market. MAS is open to admitting banks with specialist expertise and SME financing so long as they are financially sound and meet our prudential requirements. Some players in foreign markets who specialise in SME financing do not rely on deposits as a source of funds. Typically, they rely on the capital markets to fund themselves. And in such instances, they will not require a banking licence from the MAS. There are a few such players in Singapore already who are funded primarily by issuing debt and some equity. They are active in equipment leasing, factoring and working capital loan business to SMEs. Mr Inderjit Singh has asked whether we should issue bank licences to finance companies. I would first say that our local banks and foreign banks will be the mainstay of corporate financing in Singapore, including for the SME market. All over the world, we find that scale is important. Banks are getting larger all over the world because scale brings efficiency, synergies, better management capabilities and better risk management. Banks are getting larger and for reasons that are driven by the market, not regulators. But I agree that there is a role for smaller, specialised lenders in the domestic market. The finance companies are playing a useful role in servicing smaller corporate customers and retail customers. They do not have regional ambitions, but they complement the role played by our local and foreign banks.”
“Mr Chairman, on behalf of the Senior Minister. I will take first the questions raised by Dr Ahmad Magad and Mr Inderjit Singh on financing issues, particularly for SMEs, and whether we should see a larger role for specialised SME banks and finance companies. Our approach to SME financing is basically to allow for a competitive market. Each of the local banks is, in fact, quite active in the SME market. I understand that about a quarter or so of their corporate loans portfolio is really in the SME segment of the market. The foreign banks are free to offer financing to SME customers. There are no restrictions on the types of customers that foreign banks with a qualified full bank licence or wholesale banking licence can offer and deal with. In fact, even our offshore banks are free to deal in Singapore dollar loans up to quite a generous cap. So, it is quite a competitive market, if you put together the local banks and the foreign banks. A few foreign banks in fact specialise in SME lending. We also have credit and leasing companies which are not regulated by MAS but they are active in the financing market. MAS welcomes initiatives by banks to provide new financing options for the SMEs. In fact, we have seen some recent initiatives to help SMEs tap the capital markets, which is I think a very interesting initiative, because it allows SMEs who would not on their own be able to tap the capital market. By pooling risks together with a diversified pool of other SMEs, they are able to enter the market. SPRING Singapore has been working on this, and it is launching a scheme this year. It has selected DBS to manage a $300 million SME loan securitisation programme.”
“The recent reduction in the number of passages in Chinese Language (CL) textbooks does not represent a cut in the CL curriculum. There is no change in the language skills and learning outcomes that are expected in the CL curriculum for 2005. These outcomes are defined in terms of students' ability to use the language fluently and confidently, not by the number of passages or characters that a student has learnt. The reduction in texts will free up time and space for teachers to conduct activities pegged to the needs and abilities of their students, and to consolidate their language skills. Teachers will have greater flexibility to engage their students in applying and practising their language skills, so as to develop greater fluency and confidence in using the language. The recent changes are part of the transitional steps being taken before the full implementation of the recommendations of the Chinese Language Curriculum and Pedagogy Review Committee (CLCPRC), which were contained in the White Paper that was debated and endorsed by Parliament in November 2004. The Government had during the debate set out fully its reasons for supporting the fundamental changes in CL teaching and learning, aimed at ensuring that it is an enjoyable, living language for all our students. APPENDICES Section Name: BUDGET Title: ANNUAL BUDGET STATEMENT Filename : Appendix to Annual Budget Statement MP Name: The Prime Minister and Minister for Finance (Mr Lee Hsien Loong)”
“For buyers who do not qualify for an HDB concessionary loan, they would have to obtain financing from banks or financial institutions. HDB does not have information on loan applications rejected by banks because of the borrowers' credit history. RENTAL FLATS 3. Dr Amy Khor Lean Suan asked the Minister for National Development (a) how many applications for rental housing were received in 2002, 2003 and 2004; (b) how many of the applicants were allocated flats and accepted them; (c) how many were allocated flats but rejected them; (d) how many applicants did not qualify for the rental flats because their household income or per capita income exceeded the stipulated amount; and (e) what is the average waiting time of successful applicants for the allocation of a rental flat.”
“In the event where there is no profit made or loss avoided, a civil penalty of between $50,000 and $2 million may be imposed. In addition, directors of listed companies who make false or misleading statements of their experience and educational qualification in an initial public offering prospectus breaching section 253 of the SFA could be subject to criminal enforcement action. A breach of section 253 arises where the false or misleading statement is materially adverse from the point of view of the investor. Offenders of section 253 of SFA may be fined up to $150,000 or imprisoned for up to two years or both. REJECTED HDB RESALE FLAT APPLICATIONS 2. Dr Amy Khor Lean Suan asked the Minister for National Development how many cases of HDB resale flat applications have been rejected since 2004 because the buyer is unable to get HDB subsidised financing as well as bank financing due to his credit history. Mr Mah Bow Tan: In processing resale applications, HDB assesses the sellers' and buyers' eligibility to sell and buy the flat, based on the prevailing resale policies and conditions. HDB will reject applications if they are unable to meet the eligibility conditions for the sale and purchase. HDB does not reject applications because the buyer is unable to obtain financing for his purchase. Flat buyers are advised to ensure that they have the financial means before they commit to a flat purchase. For buyers who are eligible to take up an HDB concessionary loan, HDB will do a credit assessment by looking at the buyer's age and household income to determine the loan quantum that he is eligible for. It does not take into consideration the buyer's credit history in its credit assessment.”
“The actions that MAS and SGX take against directors of listed companies who make false statements of their experience and educational qualifications will depend on the circumstances of each case. Under SGX's continuous disclosure obligations, the appointment of any director, chief executive officer or other key appointments must be announced immediately. The announcement must include details of the person's particulars, work experience, other directorships and shareholdings. If there is a false or misleading statement, SGX will consider if the erroneous information had materially affected the share price or established a false impression of the price or volume in the issuer's securities. Depending on these facts, SGX may warn or reprimand offenders. SGX may also refer the matter to MAS if it forms the view that the false and misleading statement was one that could have induced dealing in or affected the market price of securities, in breach of section 199 of the Securities and Futures Act ("the SFA") or one that was fraudulent and had induced others to deal in securities, in breach of section 200 of the SFA. In these instances, where sufficient basis for investigation exists, and depending on the severity of the contravention, the case may either be subject to criminal enforcement action by CAD or civil penalty action by the MAS. Under the criminal regime, offenders of section 199 or 200 of the SFA may be fined up to $250,000 or imprisoned for up to seven years or both. Under the civil penalty regime, a civil penalty of an amount not exceeding three times any profit gained or loss avoided, subject to a minimum of $50,000 for an individual or $100,000 for a corporation may be imposed.”
“This is an increase of $163,100 over the FY 2004 Class II expenditure and reflects normal salary increments, filling of vacant posts, and the decentralisation of personnel budget from the Public Service Division. For Class III expenditure, I propose a provision of $1,055,800. This is an increase of $152,200 over the FY 2004 Class III expenditure and it is due to IT and security-related initiatives. For Class IV expenditure, I propose a provision of $8,000. This is a decrease of $19,000 from the FY 2004 Class IV expenditure for FY 2004 and reflects reduced purchases of equipment. It is therefore necessary to vary the provisions in the Schedule to the Civil List and Pension Act (Chapter 44) with effect from 1st April 2005, to reflect the budgeted FY 2005 provisions, as indicated in the Motion before the House. Sir, I beg to move. Question put, and agreed to. Resolved, That this Parliament, pursuant to section 7 of the Civil List and Pension Act (Chapter 44), resolves that the Schedule to that Act be varied with effect from 1st April 2005 by deleting the figures "$2,373,100", "$116,000", "$2,425,100", "$903,600" and "$27,000" in the second column and substituting them for the figures "$2,392,300", "$117,000", "$2,588,200", "$1,055,800" and "$8,000" respectively.”
“It will be unwise though to have a categorical exemption because not all players in these affiliated industries have the necessary skills to be able to do due diligence for anti-money laundering and other regulatory requirements. Even exempted entities will have to follow certain procedures specified in this Bill, in particular for anti-money laundering requirements. As for loans to directors, MAS will restrict loans to directors just like for officers and employees. These are unsecured loans. We will restrict unsecured loans to directors, officers and employees to no more than one year of emoluments. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Tharman Shanmugaratnam]. Bill considered in Committee; reported without amendment; read a Third time and passed. CIVIL LIST (Motion) The Acting Second Minister for Finance (Mr Raymond Lim Siang Keat): Mr Speaker, Sir, I beg to move, That this Parliament, pursuant to section 7 of the Civil List and Pension Act (Chapter 44), resolves that the Schedule to that Act be varied with effect from 1st April 2005 by deleting the figures "$2,373,100", "$116,000", "$2,425,100", "$903,600" and "$27,000" in the second column and substituting them for the figures "$2,392,300", "$117,000", "$2,588,200", "$1,055,800" and "$8,000" respectively. I propose that a provision of $2,512,900 be supported for Class I expenditure. The increase of $20,200 over the FY 2004 Class I expenditure is due to the restoration of cuts in the President's salary and higher provisions for the President's National Day reception. For Class II expenditure, I propose a provision of $2,588,200.”
“Sir, I shall try to answer the Member's questions quickly. First, the reason why the Bill only specifies exemptions for banks and merchant banks is because these are the clear-cut exemptions. They are already regulated by the MAS. We intend to exempt a range of other players through regulation. There is no intention to limit exemptions only to banks and merchant banks and to limit this business only to these large institutions. For instance, lawyers, accountants, private trust companies, a range of other exemptions will be provided for, but there will not be categorical exemptions across the board. Mr Andy Gan raised a common example where a family trust is being set up - father sets it up for the son, gets the uncles and aunts to act as directors. They are not in the business of providing trust services, so they will not fall under this Act. The lawyer who advises them could potentially be in the business of offering trust services, and that is where the exemptions will come into play. These exemptions are best set out in regulations rather than the Act. That will enable us to finetune them as we go along, consult and get feedback from the industry over time, to see whether there is a need for changes to regulations. Lawyers are a group of players who already have a traditional trust law business, and there is no intention of stifling that. Lawyers who are providing trust services that are incidental to their trust law business will be exempted. Those who are providing the full range of trust services, but on a limited scale, will be provided with limited exemptions. We are consulting the Academy of Law and the Law Society before setting on the details.”
“Anti-money laundering and countering the financing of terrorism MAS will set out in a notice the measures that licensed trust companies have to take to counter money laundering and terrorist financing. The measures would be similar to those imposed on other financial institutions, which are in line with recommendations by the Financial Action Task Force. Systems and processes for good business conduct MAS will also require trust companies to install systems and processes for good business conduct in areas such as record-keeping, compliance with regulations, complaints-handling and continuing professional development. Conclusion Sir, to conclude, the new regime for trust companies is an important new piece in the framework for regulation of financial services in Singapore. It will position Singapore as a leading global trust domicile, and contribute to the growth of the private banking industry. It will help us stay in the forefront as a sound, well-regulated and internationally competitive financial centre. Sir, I beg to move. Question proposed.”
“MAS' approval for directors and significant shareholders The Bill also requires a licensed trust company to obtain MAS' approval for the appointment of directors and for persons and entities wishing to become significant shareholders, since they are in a position to influence the management of the licensed trust company. Financial soundness requirements The Bill gives MAS powers to prescribe minimum financial requirements for a licensed trust company. The aim is to ensure that each licensed trust company is of sound financial standing, with sufficient capital to operate smoothly and to serve as cushion against unforeseen events. It should also have adequate insurance to cover negligence claims. This is just as we have prudential requirements for other providers of financial services such as fund managers. Licensed fund managers have to satisfy a minimum capital requirement of $250,000 if they conduct fund management on behalf of accredited investors. MAS is considering similar capital requirements for licensed trust companies. We will decide on the financial soundness requirements for licensed trust companies after consultation on the Regulations. Supervisory powers The Bill will give MAS supervisory powers over licensed trust companies similar to those it has over other financial institutions. MAS will require licensed trust companies to submit annual audited accounts and other information for supervisory review. MAS will conduct regular inspections and have powers to investigate when needed. MAS will also have powers to restrict the operations of a licensed trust company, revoke its licence, or petition the court for its winding-up.”
“The enabling provisions for these exemptions are provided in the Bill, but the scope of the exemptions will be set out in the forthcoming Regulations. The Regulations will include conditions that will apply on exempted entities, the limitations on the types and extent of trust services they can conduct, and how due diligence with regard to anti-money laundering has to be conducted. MAS will consult the industry and public on these Regulations and consider their comments before finalising them. Exclusions The Bill will also provide exclusions for entities that technically fall within the scope of the Bill, such as advisors on wills, executors and administrators of the estates of deceased persons, bare trustees, and managers and trustees of business trusts. The Bill is not intended to regulate these entities, as the trusts involved are not actively used for investment and wealth planning purposes. Requirements for resident managers The Trust Companies Bill requires licensed trust companies to obtain MAS' approval for the appointment of their resident managers. MAS intends to set out in Regulations that a licensed trust company has at least two resident managers. Requiring the managers to live and work in Singapore ensures that the persons managing the affairs of the company are in the position to exercise effective day-to-day control of the business. The requirement for at least two managers is also a useful check against a single individual engaging in undetected illicit activity.”
“Key measures under the new regulatory framework and Bill Mandatory licensing A key policy change in the new framework is the shift from voluntary registration to mandatory licensing. Under the current Trust Companies Act, registration of trust companies is voluntary. Under the new regulatory framework, licensing will be mandatory for anyone engaging in trust business. Mandatory licensing will foster high standards of probity, professionalism and business conduct across the entire industry. Exemptions As the trust business is defined broadly, however, the Bill and the Regulations that will accompany it will contain exemptions from licensing, or will have lighter regulation, for certain companies. The exemptions will be granted where the risks of abuse or inadequate professional standards are low, or to avoid duplication with other regulations. For example, private banks, which are regulated by MAS, will be allowed to carry on trust business without needing an additional licence as long as they do not act as trustees themselves, advise on trusts or make significant decisions affecting a trust. They can, for example, arrange for a third party to act as trustee, explain the features of a trust, and facilitate the execution and completion of relevant documents, as part of their private banking services without requiring an additional licence under the Trust Companies Act. MAS will also work out exemptions from licensing or lighter regulation for other entities in the forthcoming Regulations. These will include lawyers and accountants; private trust companies, which act as trustees for a single private group, typically a high net worth family; and overseas persons visiting Singapore.”
“The Trustees Act was extensively reviewed by the Ministry of Law and the MAS and amended by Parliament in October last year, to bring it in line with developments in trust law and the use of trusts in financial and business transactions. The Trust Companies Bill likewise seeks to update and modernise the legislative and regulatory framework for companies that are in the business of providing trust services. The Bill applies to companies providing trust services in Singapore regardless of whether the trusts are established under Singapore law or other law. The Bill defines the business of trust services as comprising any of the activities of creating a trust, acting as a trustee, arranging for another person to act as a trustee, or providing trust administration services. For example, giving advice on how to set up a trust, and managing and distributing trust assets, are activities that would fall under the Bill. A company providing trust services in Singapore must adhere to the standards of governance set out in the Bill and the accompanying supervisory framework, just as financial companies providing wealth management or private banking services are required to meet appropriate standards of conduct. On the other hand, the Business Trusts Act, which Parliament enacted in October 2004, introduced a specific governance framework for business trusts. Business trusts have the distinguishing feature of being engaged in the management of an operating business, for example, infrastructure services. The Trust Companies Bill will not apply to trustees of business trusts. Mr Speaker, Sir, I will now go through the key provisions of the Trust Companies Bill.”
“In other words, as in all other areas in the financial industry, good regulation leads to good growth. Singapore does have a framework for regulating trust companies. However, no major changes have been made to the Trust Companies Act over the last two decades. For the reasons I have just set out, MAS and the Ministry of Finance consider it timely to update and strengthen the regulatory framework for trust companies operating in Singapore. Regulation of trust companies will be transferred from the Accounting and Corporate Regulatory Authority (ACRA) to MAS. This transfer of responsibilities will allow a single regulator to supervise the complementary activities of trust services, private banking and wealth management. MAS consulted the industry and public on the proposed new framework for trust companies and a draft of the Bill. We have considered and incorporated the comments received, where appropriate, into the Bill. MAS will also be holding consultations on the regulations, notices and guidelines required to implement the new regime for trust companies. Scope of Trust Companies Bill, Trustees Act and Business Trusts Act It may be useful to explain how the Trust Companies Bill relates to the Trustees Act and Business Trusts Act. The Trustees Act is the centerpiece of trust law in Singapore. It provides the basic legislative framework for trustees of trusts established under Singapore law. The Trustees Act sets out the default powers, duties and obligations of trustees, the powers of the Courts and matters relating to appointment and discharge of trustees.”
“Mr Speaker, Sir, on behalf of the Senior Minister, I beg to move, "That the Bill be now read a Second time." Trust services are growing in importance globally, as part of the wide array of wealth management services offered by financial institutions. Private bankers often advise their clients to use trusts for investment and wealth planning purposes, such as for succession planning. In Singapore, the trust services industry has expanded steadily in recent years along with the robust growth in the private banking and wealth management business. Singapore's standing as an internationally reputable financial centre has prompted global players to locate their trust administration business here. There is currently no single set of internationally endorsed standards for the regulation of trust companies. But given the growth and increasing sophistication of the industry, there has been increasing pressure for trust companies to be regulated, so as to foster high standards of professional conduct and discourage illicit activities. The Financial Action Task Force, an international, inter-governmental body that recommends standards to combat money laundering and terrorist financing, has extended its recommendations to cover the trust services industry. The Financial Stability Forum, a grouping of regulators of major financial centres including Singapore, has recently expressed its concern that the migration of trust companies to unregulated jurisdictions presents significant risks. MAS has also received feedback from reputable trust companies that a sound framework for the regulation of the trust services industry will attract top professionals and their clients to do more trust business in Singapore. It will give Singapore a premium.”
“Yes, first, we still have the vocational training centres and we do refer a few of such pupils to those centres every year. Second, some of the external agencies do conduct not just counselling, in a general sense, but work skills counselling as well to help prepare them to get on with life and try to do well despite circumstances. ASSISTANCE TO NEEDY STUDENTS AND PUBLICATION OF GENERAL EXAMINATION RESULTS 7. Mr Wee Siew Kim asked the Minister for Education (a) how many households with school-going children have a per capita income of $300 or less; (b) how many households with young school-going children have retired parents; (c) what are the current assistance schemes available to them; and (d) has there been any study to show the performance in school of such needy students compared to the performance of the Singapore students in general. 8. Prof. Ivan Png Paak Liang asked the Minister for Education if his Ministry will publish from now on all general examination results, including Primary Six, GCE "N", "O" and "A" levels, analysed by family income or, if by family income is not possible, by type of housing as well as by race.”
“I do not have the exact data on the numbers who have not been readmitted, despite coming forward and saying they want to be readmitted, but it is a very small number. I can assure Members of that. There will be such cases of people who have not genuinely turned over a new leaf, whose parents feel that they should come back to school although the student has not reformed his behaviour. Some of the cases of students who dropped out of school - for that matter, students who are expelled from school - are cases where they would pose a danger to the rest of the school community and would pose disruption to the rest of the students if they are in school. So, we have got to be very clear as to whether they are suitable for readmission to the school - have they changed, are they serious about their studies, are they willing to conform to school rules and to be a responsible member of the school community. Those are not trivial questions. Fortunately, the numbers of students who want to come back and are unable to gain readmission are very, very few. Sometimes, it is difficult to go back to their old school community because of what had happened before, but we will find them another school.”
“I would like to thank Dr Loo for his question. He is also the Chairman of SANA. Incidentally, the figures have been improving. In fact, last year, we had less than 1,100 drop-outs in total for the whole system for the first time in several years. We are recruiting counsellors and putting them through training, because we really do not want to rush this process and put untrained counsellors in schools. By 2006, we expect that every secondary school will have a full-time counsellor. By 2008, we expect that all secondary schools, Junior Colleges and Central Institutes will have a full-time counsellor. Counselling will involve, as mentioned, career guidance as well, making sure students understand that it is in their own interest if they want to work, earn a good income and keep their jobs. It is in their own interest to stay in school, in the first instance, and then go on to post-secondary education.”
“Let me, first, say that readmission to school after he has chosen to drop out is not meant to be a breeze. He has to show sincerity, he has to show a willingness to accept what it takes to be serious about his studies and wants to be a member of the school community. So, it is not intended to be entirely frictionless where he drops in and out of the system at will. The schools have reasons why they interview students and their parents, make sure that they are truly keen on coming back, and I would not want to discourage them from that process. MOE is always there to make sure that schools are taking seriously all such requests. So, I do not think there is difficulty, in practice, in coming to the Ministry, if parents find that there is particular difficulty in getting an early reply from a school. Dr Loo Choon Yong (Nominated Member): Sir, the problem of out-of-school youths (OSY) has been looked into by SANA in the last five years. Every year, there are about 1,100 to 1,400 student drop-outs. The Minister some time ago mentioned that he would want to put a counsellor in every school. The question is: when will the Minister be putting this into action? Because we believe that that is the real solution. Less than 20% of the students want to go back to school. Most of them actually want to work, take up a trade, or whatever. So if we want to keep children in schools, the counselling programme will be useful, and we hope the Minister will bring it forward as soon as possible.”
“Sir, I am afraid I do not have the exact numbers of pupils who applied for readmission. It would certainly be in the tens. Almost all cases of students who have sought readmission and show sincere interest in wanting to take schooling seriously are successful. They find a place either in their original school or in another school. The circumstances will vary. We have situations where students are offered places in a school but feel that it is too far from their home, and we try our best to find another school that is more convenient. Sometimes, if you talk about secondary school students where they have unusual subject combinations which can be catered for in one school but not in another - in fact, there are a few cases - it takes a bit of time, but we will try our best. When you have difficulty, let the Ministry know and we will try our best to facilitate. We, in fact, do that.”
“Mdm Halimah also asked about our policy on a student who wants to return to school after having dropped out. MOE has procedures in place to assist these students. The students may, in the first instance, approach their schools or any school directly to seek readmission. MOE also looks into all referrals for readmission from parents, MPs, welfare organisations and the community. We make every effort to assist students who are seeking readmission to find places in suitable schools. Generally, students who have dropped out are able to be readmitted to our schools. No student is deprived of a place in school if the student shows interest and is willing to put in the effort to learn and complete schooling to the best of his/her ability. Once the pupils are back in the school system, schools will render the necessary support to help them adjust and continue their schooling.”
“Mr Speaker, Sir, the number of pupils who dropped out of the school system up to the secondary level is small. Nevertheless, much effort is put in to ensure that pupils stay in school. These efforts include both proactive measures to reduce the likelihood of behaviour that may lead to dropping out as well as intervention measures which address problems that do arise. The proactive measures that schools adopt include the pastoral care and life-skills programmes which are aimed at helping pupils to build up confidence in school and develop purposefulness in life, and to take responsibility for their actions. The intervention measures that schools adopt include counselling of potential drop-outs. Besides teachers, schools engage the services of professional counsellors in these efforts. Schools also work closely with parents to help them to play a more active role in the education of their children and to provide the support at home that is usually critical in sustaining the pupils' interest in school. That is why schools make home visits quite often. Schools also have arrangements with external agencies such as the self-help groups and family service centres and other agencies like SANA, which has a very useful programme to prevent students from dropping out and getting involved in drug abuse. If students insist on leaving school despite all the measures taken, schools will encourage them to continue their education in other institutions such as the Institutes of Technical Education or the Vocational Training Centres. Schools also engage external agencies to work with these premature school leavers to counsel, assist and, hopefully, encourage them to return to schools. Some examples of such programmes are YMCA's Project Bridge and Fei Yue Community Services' Project 180.”
“Conclusion Sir, in conclusion, the Bill introduces changes which will enhance MAS' quality of supervision and will, over time, help to raise the level of professionalism in the financial advisory industry. The updated legislation will encourage market competition, while moving up the quality bar. It will support the evolution of better quality advice and higher service standards by financial advisers, and strengthen consumer confidence in the industry. Sir, I beg to move. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Tharman Shanmugaratnam]. Bill considered in Committee. [Mr Deputy Speaker in the Chair]”
“Clarifying aggrieved parties' right to appeal Next, right of appeal. The Bill also clarifies the right to appeal of aggrieved parties. The FAA currently provides for a right of appeal to the Minister if parties are aggrieved by MAS' administrative decisions, such as the rejection of an application for a licence or the revocation of a licence. There is ambiguity as to whether third parties may appeal to the Minister against these decisions. Clause 11 clarifies that only the applicant for the grant, renewal or variation of a licence, or a person whose licence is revoked or suspended, may appeal to the Minister. Easing the restriction on granting unsecured credit Next, unsecured credit. Sir, the Bill also introduces amendments that mirror those in the Securities and Futures (Amendment No. 2) Bill that we have just passed. The current restriction on licensed financial advisers granting unsecured credit facilities to their directors, officers, employees or representatives for trading purposes will be removed under clause 14. As with the SFA, there are sufficient existing safeguards in the FAA on loans to directors, officers and employees to mitigate the risk of licensed financial advisers being excessively exposed to such credit risks. Expanding the grounds for refusing grant or renewal of licence, or revoking a licence The grounds under which MAS may refuse an application for the grant or renewal of a licence, or revoke a licence, will be expanded under clauses 6 and 7 to include cases where the applicant or licensee furnishes false or misleading information to the MAS. Such acts call into question the integrity of the person concerned.”
“Such "generally circulated advice" may, for example, be made via marketing brochures or given at seminars and workshops. The criteria for what constitute generally circulated advice will be set out in Regulations. Extending the scope of MAS' inspection to exempt entities Second, the Bill allows the MAS to inspect exempt entities. Exemptions from licensing and business conduct requirements are currently given to entities that pose minimal risks. Limitations are imposed on the scope of financial advisory services that such entities can undertake. For instance, they are not to undertake any marketing of collective investment schemes or arrange any life insurance contract. Currently, MAS does not have explicit powers to inspect such exempt entities to ensure that they keep to the limitations imposed. To enhance its regulatory oversight and to ensure consistency with the SFA, clause 12(f) empowers MAS to inspect these exempt entities. Extending MAS' powers to issue Prohibition Orders Next, powers to issue Prohibition Orders. MAS currently has the power to issue a Prohibition Order against undesirable persons to bar them from providing financial advisory services in Singapore. The Act currently sets out certain criteria upon which MAS may issue such an Order. These include where MAS suspends or revokes the licence held by the person, where MAS has reason to believe the person is contravening the FAA, or where the person has been convicted of an offence under the FAA, or of an offence involving fraud or dishonesty in Singapore or elsewhere. Clause 20 expands the circumstances under which MAS may issue a Prohibition Order to instances where a person has been convicted of any offence in respect of financial advisory activities in a foreign country.”
“Mr Deputy Speaker, Sir, on behalf of the Senior Minister, I beg to move, "That the Bill be now read a Second time." Sir, this Bill seeks to amend the Financial Advisers Act ("FAA") concurrent with the amendments to the Securities and Futures Act ("SFA") that have been moved today. It aims to ensure that the regulation of Financial Advisers remains business friendly, while still maintaining high standards that promote the fair treatment of customers. The MAS has taken into account the feedback received from the industry and the public following public consultation on the draft Bill that was conducted in April 2004. Financial advisers play an important role in financial markets, particularly in servicing the retail markets. They are a key conduit by which a wide range of investment products - ranging from securities, to collective investment schemes like unit trusts, to life insurance policies - are introduced and marketed to investors. The FAA was introduced to provide a regulatory framework for such market intermediaries that would support high levels of professional standards across the industry. Sir, I shall now highlight the key amendments that are proposed in the Bill. Excluding generally circulated advice from reasonable basis requirement First, clause 15 allows MAS to exclude generally circulated advice from the reasonable basis requirement. Financial advisers are required under the FAA to have a reasonable basis for their recommendations. They must take into account each client's investment objectives, financial situation and particular needs when giving advice or making a recommendation on an investment product. The reasonable basis requirement should not, however, be applicable in situations where the advice provided is not targeted at any specific person.”
“Sir, there is a range of investments that are offered to the public. I remember last year in the House, we discussed ostrich eggs and some other exotic instruments. And then, of course, there are some more regular plain vanilla instruments that are offered but they are not in the category of financial market investments and are not covered by the Securities and Futures Act, which is a very exacting form of laws, rules and standards ensuring continuous disclosure to investors, standards of market conduct on the part of intermediaries, and so on and so forth. So, it is really intended for financial markets, and in particular to protect retail investors in financial markets, and we have got to ensure that intermediaries, issuers and all participants in the market preserve transparency and high standards for their benefit. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Tharman Shanmugaratnam]. Bill considered in Committee. [Mr Deputy Speaker in the Chair]”
“First, I would like to thank Mr Inderjit Singh for his points which I think are valid. We are keen to see a private equity exchange being formed, if it is commercially viable. It is important that there be OTC trading, vibrant over-the-counter markets, for this to succeed. And the market maker is an important player in ensuring effective secondary trading. So MAS shares his concerns and we will provide exemption for market makers under the small offers provision of the Act. We will do so by way of regulation. Under the exemption, the resales that are effected by the market maker will not be aggregated with the original amount that is issued by the offeror for the purpose of computing the $5 million limit. On Prof. Ivan Png's question, the Securites and Futures Act does not govern that class of activity - the offer of membership in clubs. So, it is not covered by the scope of this Act.”
“In conclusion, Sir, the market and disclosure-based regulatory approach that underpins the Securities and Futures Act and the amendments that this Bill proposes will enhance confidence in our markets and encourage continued innovation and growth. The Bill continues MAS' efforts to establish a framework of laws, rules and standards that encourage complete and clear disclosure of information, markets that operate with integrity, intermediaries who deal fairly with their customers, consumers who are empowered and educated of the risks involved in investments and the regulator able to take effective enforcement when breaches occur. Sir, I beg to move. Question proposed.”
“In Hong Kong, the Securities and Futures Commission has been reviewing various aspects of its regulatory framework, less than a year after its Securities and Futures Ordinance came into effect in April 2003. There has also been a flurry of reforms in the United States, including major reforms regarding corporate governance and conflicts of interest on the part of analysts as found in the Sarbanes-Oxley Act, and in the managed funds industry. There have also been recent moves in the US to modernise the process of securities offers and update the regulation of markets to keep pace with technological and industry developments. Capital markets regulation in Singapore as around the world will have to continue to evolve in response to new developments and concerns, while allowing for innovation, liquidity and growth of the markets. Sir, the market-driven and disclosure-based regulatory regime that we have adopted is the most effective way of governing a modern and rapidly innovating capital market, with a growing range of investment offerings and a wide spectrum of investors with differing levels of risk tolerance. Market discipline is at the heart of this approach. The responsibility for making market discipline work is shared amongst all participants in the system, not just the regulator. In particular, the onus is on issuers and their professional advisers to provide meaningful, accurate and timely information to investors. The regulator, on its part, stands ready to take effective enforcement action when laws are breached or prescribed standards of market conduct are not upheld. But market discipline also means that investors have to accept the risks of a business failing for legitimate reasons, or an investment not performing up to expectations.”
“To pre-empt such problems, the new Part III inserted by clause 4 also introduces a new designation approach for clearing facilities. Clearing facilities will have to notify MAS 60 business days before commencing their operations. MAS will only designate and regulate the clearing and settlement systems which are systemically important, so as to focus our regulatory resources where the risks are more significant. Markets (clause 4, new Part II) The Bill likewise improves the provisions relating to markets. These changes will clarify MAS' intention to classify markets as approved exchanges or recognised markets depending on their systemic importance. The more systemically important markets will be categorised as approved exchanges. Recognised markets will typically be smaller-scale trading platforms or organised exchanges which are already regulated in reputable jurisdictions. Recognised market operators will be subject to a more limited set of mandatory regulatory provisions, although MAS still retains the flexibility to tailor conditions to each specified recognised market. Conclusion Mr Deputy Speaker, Sir, the key building blocks for a market and disclosure-based regime for the capital markets are in place, and are being enhanced with this Bill. However, the SFA will remain very much work in progress. With constantly evolving capital markets, MAS will continue to engage in discussions with industry practitioners, monitor developments in regulatory practices internationally, and keep our legislation relevant to competitive captial markets. Singapore is not alone in this process of continued refinement and reform of capital markets legislation.”
“False statements to MAS Clause 12 will make it an offence for applicants for a licence under the Securities and Futures Act to submit any false statements to MAS without reasonable excuse. Currently, it is only an offence if the false statements are made knowingly and willfully. The Bill clarifies that false statements can be used as a reason for rejecting an application. For MAS to perform its regulatory role well, applicants should bear responsibility for ensuring that their submissions to MAS are accurate and truthful. Key infrastructure Clearing facilities Mr Deputy Speaker, Sir, I will now discuss the refinements to our regulatory framework concerning clearing facilities and markets. Entities engaging in clearing or settlement services are vital components in the infrastructure of the entire financial sector. Such clearing facilities currently require approval from MAS before commencing operations. However, the term "clearing or settlement" is not explicitly defined in the current SFA. Clause 106 introduces a definition for "clearing or settlement", which covers any of the activities comprising post-trade matching and confirmation, clearance and settlement. This gives greater clarity to the industry, and takes into account the broad-ranging nature of clearing and settlement activities. This is also consistent with recent practices in other developed markets where an entity may specialise in a specific aspect of clearing or settlement, but would still be subject to regulation. However, MAS anticipates that such a comprehensive definition could potentially become too inclusive over time and dilute our approach of regulating and supervising an activity in line with the risks that it poses.”