The Monetary Authority of Singapore (the “MAS”) has released a consultation paper on “Removing the DBU-ACU Divide - Implementation Issues”. The consultation closed on 30 September 2015.

All banks in Singapore currently have to maintain two accounting units - the Domestic Banking Unit (“DBU”) and the Asian Currency Unit (“ACU”). Transactions in Singapore dollars are booked in the DBU, while those in foreign currencies are typically booked in the ACU. The MAS had announced in June 2015 that it would be removing the DBU-ACU divide. Following this, banks need not continue maintaining two separate accounting units.

In the consultation paper, the MAS seeks comments on proposed amendments to the key regulatory provisions that refer to the DBU-ACU divide. These relate to:

  • Priority of specified liabilities in insolvency
  • Asset maintenance requirements
  • Anti-commingling limits
  • Equity investments limit and immovable property limit
  • Concentration limits

The draft amendments to the relevant regulatory provisions are set out in the annexes to the consultation paper.

The MAS is also working separately with the industry on proposed amendments to the returns that banks are required to submit under MAS Notice 610 “Submission of Statistics and Returns”.

Implementation timeline

Considering that the removal of the DBU-ACU divide will entail amendments to the Banking Act and other regulatory instruments and banks will need time to adjust to the changes, the MAS will give banks a period of two years after the MAS issues the revised regulatory provisions to implement these changes. During this two-year period, banks will have to comply with the prevailing rules and guidelines in force.

Reference material

To read the consultation paper from the MAS website, please click here.