MAS published an explanatory brief on the Banking (Amendment) Bill 2019. The brief highlights that the Minister for National Development and the Second Minister for Finance, Mr Lawrence Wong, on behalf of Mr. Tharman Shanmugaratnam, Senior Minister and Minister-in-charge of MAS, moved the Bill for First Reading in Parliament. This round of Banking Act amendments will significantly rationalize the banking regulation by removing the divide between the Domestic Banking Unit (DBU) and the Asian Currency Unit (ACU) and will consolidate the licensing and regulation of merchant banks under the Banking Act.
MAS had consulted the industry and public on the significant policy changes and draft legislative amendments for banks and merchant banks in February 2019 and May 2019, respectively. Feedback from the consultations was largely supportive. MAS has made refinements, where appropriate, in finalizing the Bill. As part of the key amendments, the Bill will:
- Remove the DBU-ACU divide and make corresponding consequential amendments to the relevant provisions in the Banking Act
- Introduce a new Part VIIB to set out the licensing regime for merchant banks, clarify their permitted scope of activities, stipulate applicable prudential requirements, and provide to MAS the regulatory and supervisory powers over merchant banks
- Expand the grounds for MAS to revoke bank licenses
- Provide MAS with new powers in the Banking Act to strengthen its supervisory oversight of relevant services such as the outsourcing arrangements of banks and merchant banks
Keywords: Asia Pacific, Singapore, Banking, Banking (Amendment) Bill 2019, Banking Act, Licensing, Merchant Banks, MAS
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