MAS Updates Requirements for Related Party Transactions of Banks
MAS published amendments to Notices 643 and 639A in the context of the requirements for related party transactions of banks. Notice 643 sets out requirements for banks when engaging in transactions with their related parties while Notice 639A sets out requirements for banks for preparing statements of exposures and credit facilities to related concerns. Notices 643 and 639A, which are dated December 12, 2019, take effect on October 01, 2020. Consequently, the earlier versions of these MAS notices—Notice 643 dated November 21, 2016 and Notice 639A dated June 06, 2007—are being cancelled with effect from October 01, 2020.
These notices apply to the locally incorporated full banks and wholesale banks, in addition to the full banks (branch) and wholesale banks (branch). Notice 643 sets out the definition, scope, and general principle governing transactions with related parties. It also covers the responsibilities of banks to maintain oversight and control over their related party transactions to mitigate the risk of abuse arising from conflicts of interest. Notice 639A requires all banks to prepare quarterly statements of their exposures and credit facilities to related concerns using the attached form and explanatory notes. Both these MAS notices have been issued under the Banking Act (Cap. 19).
Effective Date: October 01, 2020
Keywords: Asia Pacific, Singapore, Banking, Credit Risk, Notice 643, Notice 639A, Related Party Transactions, Derivatives, MAS
Related Articles
EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
EP Reaches Agreement on Corporate Sustainability Reporting Directive
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
PRA Consults on Model Risk Management Principles for Banks
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
EC Regulation Amends Standards for Calculating Credit Risk Adjustments
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
BIS Hub Updates Work Program for 2022, Announces New Projects
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
EIOPA Consults on Review of Securitization Framework in Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
UK Authorities Issue Regulatory and Reporting Updates for Banks
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
BCBS Issues Climate Risk Principles while HKMA Expresses Its Support
The Basel Committee on Banking Supervision (BCBS) issued principles for the effective management and supervision of climate-related financial risks.
