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New bill boosts MAS' supervisory, investigative powers

It will also give MAS powers to regulate FIs in the capital market space.

A new bill which will strengthen the supervisory and investigative powers of the Monetary Authority of Singapore (MAS) in the financial sector has been read at the Parliament.

In a speech at the Parliament, Minister of State Alvin Tan detailed the key changes that the Financial Institutions (Miscellaneous Amendments) Bill (FIMA Bill) will introduce.

Enhancement of investigative powers

The bill proposes to strengthen or widen some of MAS' existing programs under the  Securities and Futures Act 2001 (SFA) and  Financial Advisers Act 2001 (FAA).

It also aims to enhance and make consistent the central bank's investigative powers across all its other administered acts namely Financial Services and Markets Act 2022 (FSMA), Insurance Act 1966 (IA), Payment Services Act 2019 (PS Act) and Trust Companies Act 2005 (TCA).

"MAS is proposing to introduce in the other MAS-administered acts, the power to require persons to appear before an MAS officer for examination and statement-recording for the purpose of investigations under the relevant acts," Tan said.

"Second, the FIMA Bill will remove the requirement in the SFA and FAA for MAS to first issue orders to a suspect to produce information and show that the suspect has failed to comply with such orders before MAS can enter – without a warrant – premises believed to be occupied by the suspect. This will enable MAS to enter premises without tipping off the suspect, and hence reduce the risk of the suspect destroying evidence relevant to the investigation," Tan added.

Whilst MAs will not have powers to search premises and secure evidence on-premises when they exercise the power of entry without a warrant, they can require "any person on the premises to produce information, or state where such information can be found."

"MAS officers can also require any person on the premises to preserve evidence," Tan explained.

The FIMA Bill will also introduce provisions in the Other MAS administered acts to empower the central bank to obtain a court warrant to search premises and seize evidence, said Tan.

Enhancement of supervisory power

The bill also introduced changes to MAS's supervisory powers under the SFA, FAA and TCA, harmonising requirements across the three acts.

Tan underscored three key amendments:

  • The FIMA Bill will consolidate the grounds for removal into a single ground of not being “fit and proper”.
  • The FIMA Bill will extend the approval requirement to locally incorporated recognised market operators, recognised clearing houses, and approved trustees, which currently only applies to capital markets FIs.
  • The FIMA Bill will introduce the requirement for  Approved Exchanges, Approved Clearing Houses, Approved Holding Companies, and Licensed Trade Repositories to obtain MAS’ approval for the appointment of their external auditors annually.

"MAS will also have powers to direct these entities to remove or replace their appointed auditors, where the appointed auditors are unable to discharge their duties satisfactorily," Tan added.

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