Singapore is a well-established international financial centre. Due to its central location in Asia Pacific, it is home to many financial institutions. A number of these financial institutions have also chosen Singapore as their global or regional headquarters. The latest Global financial Centre Index shows Singapore as the 3rd most competitive financial centre in the world, behind only London and New York. More recently, Singapore has also overtaken Japan to become the largest foreign exchange centre in Asia and third largest globally. Singapore is also a growing wealth management hub.
The Monetary Authority of Singapore (“MAS”) is the sole regulator in Singapore having regulatory oversight of the financial services industry across various sectors. The MAS is also the central bank of Singapore. The Singaporean financial services industry covers the following sectors:
- merchant banks;
- finance companies;
- securities, futures and fund management;
- financial advisers;
- money brokers;
- money-changing and remittance businesses;
- business trusts;
- trust companies; and
- payment and settlement systems.
The MAS performs six distinct oversight functions to achieve its objectives, namely:
- regulation, which involves setting risk-based capital and prudential requirements;
- authorisation, which involves acting as the “gatekeeper” for institutions that wish to offer financial services in Singapore;
- supervising the conduct of business by financial institutions, including prudential and anti-money laundering and countering the financing of terrorism (“AML/CFT”) measures;
- financial surveillance;
- enforcement, which involves taking action against those institutions and individuals who breach prudential, AML/CFT and market conduct requirements; and
- exercising resolution powers over financial institutions.
This MAS publication provides further information on MAS’s objectives and principles of financial supervision in Singapore.
In addition to the MAS, other Singaporean regulators may also be generally relevant in the conduct of business in Singapore. The Accounting and Corporate Regulatory Authority (ACRA) is Singapore’s regulator of business entities (and hence, including entities carrying on financial services businesses) in Singapore. The Singapore Exchange (SGX), which is the only stock exchange in Singapore, also performs regulatory functions with respect to listings, issuer regulation, member supervision and also market surveillance.
Legislation and other non-statutory publications
Different pieces of Singaporean legislation regulate the various financial services sectors highlighted above. These include:
- the Banking Act (Cap. 19);
- the Monetary Authority of Singapore Act (Cap. 186);
- the Finance Companies Act (Cap. 108);
- the Insurance Act (Cap. 142);
- the Securities and Futures Act (Cap. 289);
- the Financial Advisers Act (Cap. 110);
- the Money-Changing and Remittance Business Act (Cap. 187);
- the Business Trust Act (Cap. 31A);
- the Trust Companies Act (Cap. 336); and
- the Payment Systems (Oversight) Act (Cap. 222A).
Subsidiary legislation is promulgated under the respective main Acts to provide specific regulation applicable to that financial services sector. For instance, the Securities and Futures (Licensing and Conduct of Business) Regulations (promulgated under the SFA) provide specific regulations on capital markets services licence related matters such as conduct of business requirements and rules relating to dealing with client moneys and assets. (See our forthcoming report on the Securities and Futures Act (Cap. 189) and the capital markets services licensing regime in Singapore.)
The MAS, being the sole financial services regulator, administers the aforementioned legislation. Guidelines, directions, codes, circulars, FAQs and notifications are published by the MAS under its general powers provided under the Monetary Authority of Singapore Act (Cap. 186)). These publications also apply to the financial services industry. Financial institutions are expected to comply and adhere to these publications.
We are very grateful to Rajah & Tann Singapore LLP for their assistance in the publication of this report.