The Monetary Authority of Singapore (MAS) has issued a Consultation Paper on Review of Anti-Commingling Framework for Banks (Consultation Paper). It is proposing to revise its anti-comingling framework by giving banks more flexibility to carry on businesses that are related or complementary to their core businesses.  The proposed changes are partly in response to the disruptive effects of mobile apps and digital platforms on traditional banking business.   The Consultation Paper proposes simplifying and streamlining the conditions for the exemption to the rule against commingling. The current requirements under regulation 23G will be amended to allow banks to conduct or invest in permissible non-financial businesses provided (among other things):

  • The business is related or complementary to any of the core financial businesses carried on by the bank.
  • The bank informs the MAS at least 14 days prior to
    • the commencement of the business, public announcement of the bank carrying on the business, or the signing of the agreement to acquire the business or major stake in the entity operating the business, whichever is earlier; and
    • any subsequent changes in scope, shareholding, ownership, investment or capital in the business.
  • The aggregate size of all businesses carried on by the bank under regulation 23G does not exceed 10% of the bank’s capital funds.

The MAS will relax the current prohibition against sales of consumer goods by allowing banks to engage, directly or indirectly, in the following:

  • Operation of online location or electronic platforms that match buyers and sellers of consumer goods or services;
  • Sale of consumer goods or services via location or electronic platforms; and
  • Any business which is incidental to the above.  

Banks will also be allowed to invest in the following businesses, as part of their strategy to provide integrated solutions to their customers:

  • Sale of software or systems that were originally developed or commissioned by the bank for its core financial business (e.g. sale of accounting or risk analytics software); and
  • Entering into tie-ups or referral arrangements with any person for that person to sell or provide the person’s products or services which that person will be solely responsible for delivering or performing.