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
ESAs Issue Multiple Regulatory Updates for Financial Sector Entities
The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.
FSB and NGFS Publish Initial Findings from Climate Scenario Analyses
The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.
FSB Issues Reports on NBFI and Liquidity in Government Bonds
The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.
ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments
The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.
IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets
The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.
EBA Finalizes Methodology for Stress Tests, Issues Other Updates
The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups
EU Finalizes Rules Under Crowdfunding Service Providers Regulation
The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.
OSFI Sets Out Work Priorities and Reporting Updates for Banks
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
APRA Finalizes Changes to Capital Framework, Issues Other Updates
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
BIS Hub and Central Banks Conduct CBDC and DeFI Pilots
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.
