MAS Updates Housing Loan Rules, Proposes Corporate Governance Guidance
MAS updated rules for new housing loans by banks and finance companies. The rules cover borrower-mortgagor and guarantor-borrower requirements, loan tenure and loan-to-value limits, and requirements for the Mortgage Servicing Ratio and the Total Debt Servicing Ratio. MAS also published a consultation paper on revisions to the guidelines on corporate governance for designated financial holding companies, banks, direct insurers, reinsurers and captive insurers incorporated in Singapore. Annex C to the paper sets out the proposed revisions, which take into account international standards and industry good practices; this consultation closes on June 18, 2021.
The guidelines on corporate governance comprise the principles and provisions of the Code of Corporate Governance and additional guidelines for locally incorporated institutions. As MAS will be updating the Corporate Governance Guidelines to replace the 2012 Corporate Governance Code with the 2018 version, consequential amendments arising from the differences in the 2018 Corporate Governance Code will be necessary to the additional guidelines within the Corporate Governance Guidelines. Tables B1 to B3 of Annex B set out these amendments. MAS will also be streamlining the additional guidelines to remove expectations that are already contained within the Corporate Governance Regulations and MAS’ Guidelines on Risk Management. The proposed amendments to the additional guidelines are set out in Table B4 of Annex B.
MAS will expect locally incorporated banks, Tier 1 insurers, and designated financial holding companies that own banks or Tier 1 insurers to fully observe the principles of the Corporate Governance Code contained within the Corporate Governance Guidelines. Deviations from Principles 11 and 12 under the sub-section “Shareholder Rights and Engagement” of the Corporate Governance Code are acceptable if they are not relevant in the context of the ownership structure of non-listed financial institutions. For instance, Principles 11 and 12 may not be relevant to financial institutions that are wholly owned by a single parent entity. Where locally incorporated banks, Tier 1 insurers, and designated financial holding companies which own banks or Tier 1 insurers do not observe Principles 11 and 12, this should be explained in their annual reports (for listed financial institutions) or company websites (for non-listed financial institutions).
Comment Due Date: June 18, 2021
Keywords: Asia Pacific, Singapore, Banking, Mortgage Servicing Ratio, Total Debt Servicing Ratio, Credit Risk, RRE, Governance, MAS
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