MAS Regulatory Entity

Internationally, the Monetary Authority of Singapore (MAS) has long been considered the gold standard of sustainable finance. MAS is more than just a bank that prints money.

It also serves as the Singapore Central Bank. FinTech (finance and technology) professionals need to be familiar with MAS. Singapore’s financial centre reputation is well-known thanks to MAS’s work and maintaining global economic growth.

What is the Monetary Authority of Singapore (MAS?)

MAS Singapore was established in 1971 to coordinate and communicate across government departments. SG MAS serves as the central authority for monetary policy in the city-state.

Since its founding, MAS has sought to achieve sustained economic growth, focusing on non-inflationary growth. The mission of Singapore Bank is to become an international financial centre that is progressive and stable.

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Role of MAS

It is often said that traditional financial institutions have failed to adapt to the needs of consumers and businesses. However, innovative FinTech companies have dramatically changed the landscape in recent years. MAS, SG continues to adapt and develop in this fast-changing world.

As a whole, MAS performs the following functions

The MAS regulates financial activities in Singapore. Moreover, it ensures complete transparency and accountability of all financial transactions.
MAS is also working as a government banker. Through MAS, the government can make deposits and transact globally.
It also controls all securities issued by the government

Policies and responsibilities of MAS

Every Singaporean and regional business relies on MAS Singapore. Despite their subtlety, their practices affect nearly every day-to-day operation. The main areas in which SG MAS operates are as follow

Printing Money

MAS is primarily responsible for printing money. Therefore, printing banknotes is under the sole control of MAS. As MAS prints money, it must factor in inflation and interest rates.

Exchange rates

The basket of currencies is used to adjust currency valuations. MAS aggregates the exchange rate among four of Singapore’s major training partners. It aggregates exchange rates rather than focusing on one partner.

Interest rate Policy

Its interest rates essentially follow the global market like those in other countries. However, a Singaporean government prefers to focus on its exchange rates rather than singly regulate its interest rate.

Working with FinTech

As FinTech continues to grow, another layer of responsibility is added to MAS Singapore. The organization dictates FinTech policies, including those relating to data sharing, data security, and privacy. To comply with an advancing global world’s new requirements, the Monetary Authority of Singapore needs to implement, enforce, and support organizations in implementing legacy system upgrades

What does this have to do with businesses?

Several major FinTech companies and startups set up shop in Singapore due to its business-friendly environment and strong global trade position. For this purpose, MAS established the FinTech Regulatory Sandbox in 2016. As a result, startups and established institutions can participate in controlled and safe environments before entering the market.

Moreover, this city-state has strong privacy, data security, and privacy policies, which entrepreneurs should know.

Innovation techniques in MAS

Singapore’s vision is to become a smart nation, and as a part of that ambition, MAS is the agency responsible for fostering FinTech innovation. For this reason, they regularly award grants to the industry. In addition, Singapore’s Central Bank has a more substantial role than other countries’ central banks in promoting innovation, which is why it is an attractive hub for thriving businesses.

Financially stressed FinTech startups might acquire financial help from MAS through the establishment of their operations in Singapore. Companies with FinTech products looking to operate in this hub of innovation must carefully examine the MAS policies.

Singapore is crucial for businesses looking to establish themselves in Asia-Pacific markets. It is, however, imperative that the investors learn all there is to know about data security if they plan to succeed in the industry

Investors can take their business to the next level with an integrated data management solution that secures data, reduces compliance risk, and enables faster innovation. Also, there is a need to find out how Delphix’s API-driven platform helps businesses accelerate their digital transformation while maintaining data compliance both in Singapore and globally.

MAS Financial regulation

Following the Monetary Authority of Singapore Act, the MAS is responsible for setting regulations and supervising the city’s banking, capital markets, insurance, and payment sectors. In addition, through legally binding instructions called Directions, the organization enforces its regulations and government laws.

A directive may apply to a specific entity or individual, while a Notice typically covers a class of asset, institutions, or person, such as loan issuers or lenders. In addition to these non-binding guidelines, MAS provides Codes that give recommendations regarding specific business activities.

Approach to AML and CTF policies

The MAS is a member of the Financial Action Task Force, i.e., a global standard-setting body, and the Asia Pacific Group on Money Laundering (APML). So, the priority of the Monetary Authority of Singapore is to regulate anti-money laundering (AML) and counterterrorism funding (CTF) policies.

Financial firms must comply with AML and CTF policies outlined in the MASs founding parliamentary Act, revised recently. The obligations are to submit suspicious transaction reports and identify and know their customers (KYC).

MAS was among the international regulators investigating the illegal siphoning of approximately $4.5 billion from Malaysian development fund 1MDB. As a result of the scandal, Najib Razak was used as Malaysian prime minister. The MAS regulatory found that the city’s financial system was used to launder some of the money.

As a result, it fined banks, including Credit Suisse and local lenders United Overseas Bank, millions of dollars for violating AML regulations.

Cybersecurity is another recent addition to the MAS oversight, along with notices on cyber hygiene and technology risk management and various guidelines.

Economic development

In recent months, the MAS has received much appreciation for its focus on financial technology. They have established a FinTech Regulatory Sandbox to offer grants and support for the production of digital financial products. While they are in development, startups can experiment with their innovations outside of the usual regulatory restrictions imposed by the MAS.

Notably, the scheme has spurred to the creation of blockchain-based services, including iSTOX, which operates in the capital market. However, MAS’s willingness to regulate cryptocurrencies has been controversial because other central banks have rejected them.

Bottom line

The Monetary Authority of Singapore (MAS) is the central bank and banker to the government of Singapore. MAS’s merger with the Board of Commissioners of Currency increases its currency issuance duties. The MAS uses a risk-based approach to supervision rather than using one rule that applies to all. The MAS actively consults market practitioners and the public to develop regulations that affect market reality and industry practices.

Categories: Global Regulatory Entities | Author: Jason Morgan | Date: 5 January 2022

Jason Morgan

Jason Morgan is an experienced forex analyst and writer with a deep understanding of the financial markets. With over 15+ years of industry experience, he has honed his skills in analyzing and forecasting currency movements, providing valuable insights to traders and investors.

Forex Content Writer | Market Analyst

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