Featured Product

    MAS Guidelines on Risk Management Practices and Islamic Banking Rules

    June 28, 2021

    MAS published Notices 1108 and 1001 for merchant banks, revised guidelines on the risk management practices of Board of Directors and senior management of financial institutions, and updated guidelines on the application of banking regulations to Islamic banking. Both the guidelines will take effect on July 01, 2021. The guidelines on risk management practices set out corporate governance roles of the Board of Directors and senior management of a financial institution in ensuring a sound risk management culture and environment. These guidelines cover roles and responsibilities of the Board and senior management pertaining to risk management, risk culture and risk appetite, risk management systems and framework, and reporting to MAS.

    The guidelines on corporate governance practices highlight that the Board should ensure that senior management maintains a sound system of risk management and internal controls to safeguard stakeholders’ interests and the institution’s assets, and should determine the nature and extent of the significant risks which the Board is willing to take in achieving its strategic objectives. The Board and senior management should understand the institution’s business strategy, nature of the business activities, new products, material modifications to existing products, and major management initiatives and their associated risks. Senior management should provide the Board with information on all potentially material risks facing the institution, including those relevant to the institution’s risk profile, capital and liquidity needs. The guidelines further mention that the Board and senior management should notify MAS in advance of any substantive changes in the institution’s business activities, structure and overall condition, or as soon as they become aware of any material adverse developments, including breach of legal or prudential requirements. MAS should also be notified of material information that may negatively affect the suitability of a relevant shareholder, and the fitness and propriety of a Board member or a member of the senior management.

    The guidelines on application of banking regulations to Islamic banking cover general approach of MAS to the regulation of Islamic banking, providing guidance on the admission framework for financial institutions intending to offer Islamic financial services and the regulatory treatment for Islamic banking products, including the capital treatment of such products. These guidelines only cover the application of the Banking Act (Cap 19), Banking Regulations and written directions issued pursuant to the Banking Act, and do not cover the application of other legislation, such as the Securities and Futures Act and Financial Advisers Act. These guidelines apply to all financial institutions offering Islamic banking in Singapore. 

    In addition, MAS published Notices 1108 and 1001 for merchant banks, which will take effect from July 01, 2021. MAS Notice 1108 sets out requirements for merchant banks on protecting the confidentiality of customer information in all outsourcing arrangements. This notice applies to all merchant banks. It sets out the conditions for outsourcing operational functions when such functions involve disclosure of customer information, and which will be performed outside Singapore. MAS Notice 1001 sets out definitions for the terms "capital funds" and "net head office funds" for merchant banks. MAS also announced that it will be cancelling guidelines for operation of merchant banks with effect from July 01, 2021. 

     

    Effective Date: July 01, 2021 (Guidelines)

    Keywords: Asia Pacific, Singapore, Banking, Merchant Banks, Islamic Banking, Governance, Regulatory Capital, Banking Act, ESG, MAS

    Featured Experts
    Related Articles
    News

    EBA Proposes Standards for IRRBB Reporting Under Basel Framework

    The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.

    January 31, 2023 WebPage Regulatory News
    News

    FED Issues Further Details on Pilot Climate Scenario Analysis Exercise

    The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.

    January 17, 2023 WebPage Regulatory News
    News

    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.

    January 04, 2023 WebPage Regulatory News
    News

    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.

    January 01, 2023 WebPage Regulatory News
    News

    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.

    December 30, 2022 WebPage Regulatory News
    News

    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.

    December 29, 2022 WebPage Regulatory News
    News

    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.

    December 29, 2022 WebPage Regulatory News
    News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News
    News

    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.

    December 22, 2022 WebPage Regulatory News
    News

    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.

    December 22, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8699