MAS Consults on Operational Risk and Leverage Ratio Requirements
MAS launched a consultation on the draft standards for operational risk capital and leverage ratio requirements for banks incorporated in Singapore; these standards will be covered in the MAS Notice 637 on risk-based capital adequacy requirements. Also published were the associated proposed reporting schedules for operational risk capital and leverage ratio requirements. The comment period on this consultation ends on January 21, 2021. In addition, MAS published its response to the feedback received on the May 2019 proposals on operational risk capital and leverage ratio requirements. MAS plans to consult on the draft MAS Notice 637 provisions for other areas of the Basel III reforms at a later date.
MAS seeks comments on the draft provisions of MAS Notice 637 for definitions related to operational risk capital and leverage ratio requirements (Part II), scope of application (Part III), capital adequacy ratios and leverage ratio (Part IV), credit risk (Part VII), operational risk (Part IX), and reporting schedules (Part XII). The draft provisions in MAS Notice 637 take into account final Basel III reforms published by BCBS, namely the consolidated Basel framework (published in December 2019) and the Basel framework frequently asked questions (published in June 2020). Annex B of the consultation paper contains the draft MAS Notice 637 provisions, including the reporting forms. As announced earlier, MAS will implement the revised standards for operational risk capital and leverage ratio requirements from January 01, 2023. MAS will consult on the following at a later date:
- Definition of commitments, including the exemption from the definition of commitments under a national discretion in the final Basel III reforms, which would also apply to the leverage ratio requirements. MAS will consult on the other elements of Part II for other areas of the Basel III reforms at a later date.
- Recognition of commitments, and credit conversion factors for progressive disbursal loans, which would also apply to the leverage ratio requirements. MAS will consult on certain elements of Part IV for other areas of the Basel III reforms at a later date.
Comment Due Date: January 21, 2021
Keywords: Asia Pacific, Singapore, Banking, Basel, Reporting, Operational Risk, Leverage Ratio, Regulatory Capital, MAS
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.

Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
IASB Updates IFRS Taxonomy to Reflect Benchmark Reform AmendmentsRelated Articles
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.
FCA Sets up ESG Committee, Imposes Penalties, and Issues Other Updates
The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.
FSB Reports Assess NBFI Sector and Progress on LIBOR Transition
The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.