The Monetary Authority of Singapore (MAS) issued amendments to Notice 637 on risk-based capital adequacy requirements for banks incorporated in Singapore. The document reflects amendments to implement the framework for treatment of major stake investments in financial institutions at the solo level. The amendments shall take effect from August 18, 2021. The MAS Notice 637 has been issued pursuant to Sections 10(2), 10A(1), 10B(1), and 65(2) of the Banking Act and applies to all locally incorporated banks.
Notice 637 establishes the minimum capital adequacy ratios for a reporting bank and the methodology a reporting bank shall use for calculating ratios under the Pillar 1 of Basel standards. In addition to complying with the minimum regulatory capital requirements in this notice, a reporting bank shall consider whether it has adequate capital to cover its exposure to all risks. The notice also sets out expectations in respect of the internal capital adequacy assessment process of a reporting bank under the supervisory review process, under the Pillar 2 of Basel standards. The notice also specifies the minimum disclosure requirements for a reporting bank in relation to its capital adequacy, with a view to enhancing market discipline, which is part of the Pillar 3 under Basel standards. In addition, the notice sets out the data submission and disclosure requirements for assessing global systemically important banks.
Effective Date: August 18, 2021
Keywords: Asia Pacific, Singapore, Banking, Basel, Regulatory Capital, Reporting, Notice 637, Disclosures, Credit Risk, MAS
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