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Annual Report 2015/16 B

Monetary Authority of SingaporeANNUAL REPORT 2015/16

Monetary Authority of SingaporeC

Annual Report 2015/16 D

Monetary Authority of SingaporeANNUAL REPORT 2015/16

Monetary Authority of Singapore2

CONTENTS

ROBUST, TRUSTED, DYNAMIC AND PURPOSEFUL FINANCIAL CENTRE

32 A ROBUST FINANCIAL CENTRE

32 Industry Tests

32 Enhancing the Resolution Regime

33 Banking

33 International Supervisory Cooperation

34 Securities, Futures and Over-the-Counter Derivatives

36 Enforcement

37 Sectoral Security Operations Centre

37 Insurance

37 A TRUSTED FINANCIAL CENTRE

37 Preventing Money Laundering and Terrorism Financing

38 Closure of BSI Bank Limited

39 Enhancing Exchange of Tax Information Framework

39 Box 1: Dedicated Departments to Combat Money Laundering and Strengthen Enforcement

39 A DYNAMIC AND PURPOSEFUL FINANCIAL CENTRE

39 Financial Sector Growth Remains Resilient

40 Strengthening Capital Markets and Increasing Product Diversity

41 Enhancing the RMB Ecosystem

41 Strengthening Infrastructure Financing

41 Harnessing Technology and Innovation

42 Box 2: Formation of the FinTech & Innovation Group

44 Developing Globally Competitive Talent

45 Box 3: Unlocking Long Term Financing for Infrastructure

46 Box 4: Formation of the Financial Sector Tripartite Committee

05 Chairman’s Message

08 Board of Directors

10 Management Team

11 Governance Structure

12 Board Committees

13 Organisational Structure

14 Key Economic and Financial Statistics

16 Number of Financial Institutions in Singapore

ANCHOR OF ECONOMIC AND FINANCIAL STABILITY

20 THE ECONOMY

20 Subdued Growth in the Global Economy

20 A Moderate G3 Recovery

21 Slowdown in Asia Ex-Japan

21 Heightened Financial Vulnerabilities and Risks

22 Low Global Inflation

22 Singapore’s Economic Growth Moderated in 2015

23 Inflation Fell Due To Lower Oil Prices

24 MONETARY POLICY

26 MACROPRUDENTIAL POLICY

26 MANAGEMENT OF LIQUIDITY

26 Enhancing MAS’ Standing Facility

26 Renewal of the MAS-People’s Bank of China Currency Swap

27 MANAGEMENT OF OFFICIAL FOREIGN RESERVES

27 Investment Performance

Annual Report 2015/16 3

SERVING THE PUBLIC, ENGAGING STAKEHOLDERS

50 SERVING THE PUBLIC

50 Managing Dollars and Cents

51 Box 5: SG50 Commemorative Currency

52 MoneySENSE

53 Box 6: Promoting Financial Literacy Through Island-wide Campaigns

55 Facilitating Retail Access to Simple Low-cost Investment Products

56 PROTECTING CONSUMERS

56 Financial Advisory Industry Review

56 Encouraging Prudent Borrowing and Lending Behaviour

57 Enhancing Prospectus Disclosure Rules for Securities Offers

57 PARTNERING ACADEMIA

58 Box 7: MAS Term Professorship in Economics and Finance at the National University of Singapore

VALUED PARTNER ON THE INTERNATIONAL FRONT

62 INTERNATIONAL FINANCE

62 International Financial Regulatory Reforms

63 International Cooperation

63 Promoting Global Growth and Stability

63 REGIONAL FORUMS

63 ASEAN Financial Integration

63 ASEAN+3

64 Executives’ Meeting of East Asia-Pacific Central Banks

64 TECHNICAL COOPERATION

64 Regional and Bilateral Training

64 IMF-Singapore Regional Training Institute

65 Box 8: MAS Hosts Three High-Level Conferences

66 Box 9: ASEAN Financial Regulators’ Executive Programme

ONE MAS: INTEGRATED AND COHESIVE

70 CELEBRATING 45 YEARS

70 Box 10: The MAS Gallery

72 Box 11: 45 Years in MAS: An Interview with Sapuan and Zainal

74 RISK MANAGEMENT AND BUSINESS CONTINUITY

74 Business Continuity, Disaster Recovery and MEPS+ Resiliency

74 International Operational Risk Working Group

74 Financial Industry Security Programme

74 MAS’ Whistleblowing Policy

74 CONTROLS AND OPERATIONS

74 Audit Assurance

75 Procurement Management

75 Security and Fire Safety

75 Building Services and Infrastructure

75 ENHANCING PRODUCTIVITY AND BUILDING CAPABILITIES

75 Staff Mobility and Productivity

75 Reinforcement of MAS’ IT Security Infrastructure

75 Data Governance and Analytics

76 BUILDING A STRONG MAS FAMILY

76 Employee Engagement Survey

76 Bringing Our People Closer, Celebrating SG50

78 People Development

79 Leadership Development

79 Recognition of Staff

79 Partnership with Union

81 FINANCIAL STATEMENTS

113 STATISTICAL ANNEXES

134 GLOSSARY


WHAT WE DO

Our MissionTo promote sustained non-inflationary economic growth, and

a sound and progressive financial centre

Our Functions• To act as the central bank of Singapore, conducting

monetary policy, issuing currency, overseeing the payment systems, and serving as banker to and financial agent of

the Government• To manage the official foreign reserves of Singapore

• To conduct integrated supervision of the financial sector and financial stability surveillance

• To develop Singapore as an international financial centre


CHAIRMAN’S MESSAGE

This year’s MAS Annual Report comes at a time of heightened uncertainty around the world. Global growth is generally weak. The recovery in the advanced economies is hesitant and uneven despite extraordinarily accommodative monetary policies, and hampered in several instances by a weakened political consensus on future directions. In Asia too, the momentum of growth is slowing, amid a multi-year restructuring of the Chinese economy, lacklustre demand in key export markets and the slow pace of domestic reforms in some economies. The unpredictable consequences of the UK vote to leave the European Union further dented confidence globally.

Against the weak external environment, the Singapore economy is projected to expand by 1–3% this year. Selected clusters of trade-related activities will continue to expand alongside regional growth. Among the domestically-oriented sectors, there is steady demand in infrastructure and for healthcare and education.

Inflation remains subdued. Headline inflation has been negative for some time but could turn positive towards the later part of this year. MAS Core Inflation, which excludes the costs of accommodation and private road transport, is also anticipated to rise gradually over the course of 2016. However, the increase in core inflation will be dampened by weaker external growth and reduced tightness in Singapore’s labour market.

MAS’ monetary and financial policies aim to preserve stability and confidence in the future amidst global economic fragility, and the generally soft inflation environment.

In April 2016, MAS set the rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) policy band at zero percent. The move represented the culmination of a series of measured steps MAS had taken to reduce the rate of appreciation of the policy band in January and October last year. It recognised the subdued inflation outlook over the next year, while ensuring price stability into the medium term.

Since 2009, MAS has strengthened existing rules on property financing and introduced new measures to ensure stability in the property market and to encourage financial prudence among borrowers. A full-scale property bubble has been averted, and property prices are declining at a measured pace. MAS will continue to monitor the property market, together with other government agencies.

We have continued to keep a close watch on risk management practices and culture in Singapore’s financial sector. A thematic inspection of banks’ credit underwriting standards showed that practices were generally sound. As part of ongoing efforts to strengthen the resilience of the financial system, MAS has put out proposals to enhance its powers to facilitate the orderly and efficient resolution of distressed financial institutions.

“MAS’ monetary and financial policies aim to preserve stability and confidence in the future amidst global economic fragility, and the generally soft inflation environment.”

“Against the weak external environment, the Singapore economy is projected to expand by 1–3% this year. Selected clusters of trade-related activities will continue to expand alongside regional growth.”



Singapore’s financial centre is built on a bedrock of trust and integrity. MAS requires financial institutions to have robust controls in place to prevent money laundering and terrorism financing and will not hesitate to take actions against financial institutions which fail to meet requirements. In 2015, MAS issued reprimands to several financial institutions and imposed financial penalties for deficiencies in their controls. On 24 May 2016, MAS ordered a merchant bank to be shut down for serious breaches of anti-money laundering requirements.

We have introduced several initiatives to safeguard investors’ interests while expanding their savings and investment options. MAS refined its rules to make it easier for eligible corporates to offer bonds to retail investors. Together with the Ministry of Finance, we introduced the Singapore Savings Bonds programme to provide Singaporeans with a safe, long-term savings option. More recently, MAS set out its regulatory approach to securities-based crowdfunding. It aims to facilitate access by start-ups and small and medium enterprises to alternative platforms for raising funds, while ensuring sufficient safeguards for investors.

Supporting MAS’ efforts to safeguard consumer interest are on-going financial education programmes by the national financial education programme, MoneySENSE. A series of educational campaigns carried in both traditional and new media helped to drive home important financial literacy messages, such as using credit wisely and saving and investing early.

Despite the headwinds to global growth over the past year, the Singapore financial sector continued to perform well and was a major contributor to overall economic growth. MAS is

working with the industry to facilitate the flow of long-term funds to support infrastructure development, especially in the Asian region. This includes work to facilitate the transfer of bank financing of infrastructure to institutional investors, and the creation of performance benchmarks to allow investors to better assess the risks and returns of infrastructure projects.

As part of the national SkillsFuture agenda, MAS and the National Trades Union Congress (NTUC) have led the Financial Sector Tripartite Committee (FSTC). The FSTC brings together the industry associations, government and labour movement, to foster a versatile financial sector workforce, well-equipped to embrace the opportunities and future needs of the financial industry.

We are also developing a Smart Financial Centre that leverages effectively on technology. In August 2015, MAS formed a new Financial Technology and Innovation Group to catalyse the growth of a vibrant FinTech ecosystem. Several global financial institutions have since established innovation labs in Singapore to develop and test bed new products for the region. We are also seeing progress in the adoption of electronic payments in Singapore. These efforts involve streamlining payment card acceptance infrastructure at merchants through unified Points-of-Sale (POS) terminals, and increasing the adoption of real-time payments through the Fast and Secure Transfers (FAST) system.

“Despite the headwinds to global growth over the past year, the Singapore financial sector continued to perform well and was a major contributor to overall economic growth.”



This year marks MAS’ 45th anniversary. Over the years, MAS has become highly regarded internationally, both as a central bank and an integrated financial regulator. Singapore is also ranked among the leading financial centres in the world today. In February 2016, we launched the MAS Gallery, with the aim of helping the public understand the mission and roles of the MAS. It also reflects the outcomes of the hard work and professional expertise of MAS staff over the years, in promoting the growth and stability of the Singapore economy and financial system. On behalf of the Board, I would like to thank all MAS staff, past and present, for their invaluable contributions to building a credible central bank and financial regulator.

Tharman ShanmugaratnamChairman


BOARD OFDIRECTORS

Heng Swee KeatMinister for Finance

Lawrence Wong Shyun TsaiMinister for National Development

Tharman Shanmugaratnam Chairman

Deputy Prime Minister and Coordinating Minister for Economic and Social Policies

Lim Hng KiangDeputy Chairman

Minister for Trade and Industry (Trade)

Quek See TiatChairman of Audit Committee

Deputy President, Council for Estate Agencies

Lim Chee OnnChairman of Risk Committee Senior International Advisor, Ascendas-Singbridge Group


BOARD OF DIRECTORS

Ravi MenonManaging Director,

Monetary Authority of Singapore

V K RajahAttorney-General,

Attorney-General’s Chambers

Peter Ong Boon KweeHead of Civil Service and Permanent Secretary

(Prime Minister’s Office) (Strategy)

Tan Chorh ChuanPresident,

National University of Singapore

Goh Chok TongEmeritus Senior Minister

SENIOR ADVISOR TO MAS


MANAGEMENT TEAM

A. Ravi Menon Managing Director

B. Ong Chong Tee Deputy Managing Director Financial Supervision

C. Jacqueline Loh Deputy Managing Director Monetary Policy & Investment

/ Development & International / FinTech & Innovation

D. Andrew Khoo Deputy Managing Director Corporate Development

E. Chia Der Jiun Assistant Managing Director Markets & Investment

F. Chua Kim Leng Assistant Managing Director Banking & Insurance

G. Lee Boon Ngiap Assistant Managing Director Capital Markets

H. Leong Sing Chiong Assistant Managing Director Development & International

I. Low Kwok Mun Assistant Managing Director Finance, Risk & Currency

J. Ng Nam Sin Assistant Managing Director Corporate, HR & IT Services

K. Edward Robinson Assistant Managing Director and Chief Economist Economic Policy L. Wong Nai Seng Assistant Managing Director Policy, Risk & Surveillance

A

I

B

L

CD

EF

G HJ K


GOVERNANCESTRUCTURE

The Board is responsible for the high-level governance of MAS. The Board Committees exercise broad oversight and approve major changes to policies and strategies relating to the principal functions of MAS.

The Managing Director is responsible for the day-to-day operations of MAS and is assisted by various groups and management committees. The Executive Committee is the key decision making body at the management level. Chaired by the Managing Director, it is responsible for ensuring that MAS’ policies and initiatives are aligned with its overall direction and objectives. The Executive Committee also oversees matters referred to it by other management fora.

MAS Board

Monetary and Investment

Policy Meeting

Chairman’s Meeting

Risk Committee

StaffCommittee

Audit Committee

Executive Committee

DataCommittee

IT Steering Committee

Management Committee

Financial Stability

Committee

Financial Supervision Committee

Development and

International Committee

Technology and Innovation

Steering Committee

Markets and Investment Committee

Payment and Settlement Committee

Staff Committee I

Human Resource

Committee

MAS-CAD Joint

Investigation Panel

Staff Committee II

Board and Board Committees

Management Committees

Payment Systems andTechnology

DevelopmentSteeringGroup


BOARD COMMITTEES

The MAS Act provides that the Board of Directors shall be responsible for the policy and general administration of the affairs and business of MAS. The Board is assisted by the following committees:

CHAIRMAN’S MEETING The Chairman’s Meeting approves major changes to MAS’ supervisory policies and regulatory framework. It also approves major changes to policies and strategies relating to financial centre development and international and regional relations. The Chairman’s Meeting comprises Tharman Shanmugaratnam (Chairman), Lim Hng Kiang, Heng Swee Keat, Lawrence Wong and Ravi Menon.

MONETARY AND INVESTMENT POLICY MEETINGThe Monetary and Investment Policy Meeting deliberates and decides on issues relating to the formulation and implementation of monetary policy with the objective of maintaining price stability for sustained economic growth. The Meeting also oversees the investment of MAS’ reserves. The Monetary and Investment Policy Meeting comprises Tharman Shanmugaratnam (Chairman), Lim Hng Kiang, Heng Swee Keat, Lawrence Wong and Ravi Menon.

AUDIT COMMITTEEThe Audit Committee provides an independent assessment of MAS’ internal controls and financial reporting process. The Committee also reviews the efforts of MAS’ internal and external auditors. The Audit Committee comprises Quek See Tiat (Chairman), Peter Ong and Tan Chorh Chuan.

RISK COMMITTEEThe Risk Committee provides oversight and guidance on the management of risks faced by MAS. The Committee oversees the MAS-wide risk management framework, and reviews MAS’ risk management policies and processes for reporting of risks. The Risk Committee comprises Lim Chee Onn (Chairman), Tan Chorh Chuan, V K Rajah and Ravi Menon.

STAFF COMMITTEEThe Staff Committee approves MAS’ key personnel policies, including overall remuneration policy. It also approves matters relating to the appointment, promotion and remuneration of senior management staff. The Staff Committee comprises Tharman Shanmugaratnam (Chairman), Lim Hng Kiang, Heng Swee Keat and Ravi Menon.

As at 1 July 2016


ORGANISATIONALSTRUCTURE

MONETARY POLICY & INVESTMENT / DEVELOPMENT & INTERNATIONAL / FINTECH & INNOVATIONJacqueline Loh Deputy Managing Director

ECONOMIC POLICYEdward Robinson Assistant Managing Director and Chief Economist

Economic AnalysisChoy Keen MengExecutive Director

Economic Surveillance & ForecastingCeline SiaExecutive Director

Special ProjectsLam San LingExecutive Director

MARKETS & INVESTMENTChia Der JiunAssistant Managing Director

Monetary & Domestic Markets ManagementCindy MokDirector

Reserve ManagementBenny CheyExecutive Director

DEVELOPMENT & INTERNATIONALLeong Sing Chiong Assistant Managing Director

Financial Centre DevelopmentCarolyn NeoDirector

Financial Markets DevelopmentBernard WeeExecutive Director

InternationalLuz FooExecutive Director

FINTECH & INNOVATIONSopnendu MohantyChief FinTech Officer

Ravi Menon Managing Director

MANAGING DIRECTOR’S OFFICE

FINANCIAL SUPERVISIONOng Chong TeeDeputy Managing Director

BANKING & INSURANCEChua Kim LengAssistant Managing Director

Banking ILoo Siew YeeExecutive Director

Banking IITan Keng Heng Director

Banking IIITai Boon LeongExecutive Director

InsuranceLee Keng YiDirector

Anti-Money LaunderingValerie Tay Executive Director

Chief ExaminerWan Aik Chye

CAPITAL MARKETSLee Boon NgiapAssistant Managing Director

Capital Markets Intermediaries IMerlyn EeExecutive Director

Capital Markets Intermediaries IILim Cheng KhaiDirector

Capital Markets Intermediaries IIIKoh Hong EngDirector

Corporate Finance & ConsumerPaul YuenExecutive Director

Markets Policy & InfrastructureNg Yao LoongExecutive Director

EnforcementGillian TanDirector

POLICY, RISK & SURVEILLANCEWong Nai SengAssistant Managing Director

Prudential PolicyLim Tuang Lee Executive Director

Specialist RiskHo Hern ShinExecutive Director

Macroprudential SurveillanceWong Nai SengAssistant Managing Director

LegalNg Heng FattGeneral Counsel

Corporate Planning and CommunicationsMerlyn EeExecutive Director

Internal AuditTimothy NgExecutive Director

CORPORATE DEVELOPMENTAndrew KhooDeputy Managing Director

CORPORATE, HR & IT SERVICESNg Nam SinAssistant Managing Director

Corporate ServicesBernard YeoExecutive Director

Information TechnologyLawrence AngExecutive Director

Human ResourceSusanna LeeDirector

MAS AcademyNg Nam SinAssistant Managing Director

FINANCE, RISK & CURRENCYLow Kwok MunAssistant Managing Director

FinanceTeo Kok MingExecutive Director

Risk ManagementDaniel WangExecutive Director

CurrencyChung Wei KenExecutive Director

As at 1 August 2016


KEY ECONOMIC AND FINANCIAL STATISTICS

2011 2012 2013 2014 2015

National Income AggregatesGross Domestic Product At Current Market Prices (S$m) 346,172.7 361,498.7 375,751.0 388,169.3 402,457.9 Growth Rate (% change) 7.4 4.4 3.9 3.3 3.7 At 2010 Market Prices (S$m) 342,371.8 354,937.3 371,531.5 383,643.6 391,348.5 Growth Rate (% change) 6.2 3.7 4.7 3.3 2.0 Gross National Income At Current Market Prices (S$m) 338,633.7 350,004.1 364,342.2 368,995.7 383,483.5 Growth Rate (% change) 5.6 3.4 4.1 1.3 3.9

Labour ForceUnemployment Rate (%) 2.0 2.0 1.9 2.0 1.9 Productivity Growth (% change) 2.3 -0.3 0.5 -0.5 -0.1 Changes in Employment ('000) 122.6 129.1 136.2 130.1 32.3 Average Monthly Earnings (% change) 6.0 2.3 4.3 2.3 3.5 Unit Labour Cost (% change) 1.6 3.0 1.4 3.2 2.8

Savings and Investment Gross National Savings (S$m) 172,539.4 173,055.1 181,189.2 180,088.9 185,439.1 As % of GNI 51.0 49.4 49.7 48.8 48.4 Gross Domestic Capital Formation (S$m) 93,555.8 107,638.7 113,905.7 112,281.8 105,806.6 As % of GNI 27.6 30.8 31.3 30.4 27.6

Balance of Payments (S$m)Goods Balance 93,131.5 87,931.2 94,653.4 100,891.1 113,456.7 Exports of Goods 545,991.9 546,654.2 547,265.5 554,704.5 518,377.8 Growth Rate (% change) 8.1 0.1 0.1 1.4 -6.5 Imports of Goods 452,860.4 458,723.0 452,612.1 453,813.4 404,921.1 Growth Rate (% change) 8.0 1.3 -1.3 0.3 -10.8 Services and Other Balances -14,147.9 -22,514.8 -27,369.9 -33,084.0 -33,824.2 Current Account Balance 78,983.6 65,416.4 67,283.5 67,807.1 79,632.5 As % of GNI 23.3 18.7 18.5 18.4 20.8 Capital and Financial Account Balance 58,050.1 28,869.6 46,706.6 58,576.9 77,052.4 Balancing Item -115,546.0 -61,680.1 -91,259.2 -117,766.2 -155,184.2 Overall Balance 21,487.7 32,605.9 22,730.9 8,617.8 1,500.7 Official Foreign Reserves 308,403.2 316,744.2 344,729.2 340,438.1 350,990.8

Inflation (% change)Consumer Price Index 5.2 4.6 2.4 1.0 -0.5 GDP Deflator 1.1 0.7 -0.7 0.1 1.6

Monetary Aggregates (% change)M1 16.1 7.7 9.9 3.6 0.1 M2 10.0 7.2 4.3 3.3 1.5 M3 10.1 7.6 4.3 3.4 1.7


KEY ECONOMIC AND FINANCIAL STATISTICS

2011 2012 2013 2014 2015

Interest Rates (period average, % per annum)Prime Lending Rate 5.38 5.38 5.38 5.35 5.35Banks' 3-month Fixed Deposit Rate 0.17 0.14 0.14 0.14 0.173-month S$ SIBOR 0.41 0.39 0.38 0.41 0.923-month US$ LIBOR 0.34 0.43 0.27 0.23 0.32

Exchange Rates (period average, S$ per)US Dollar 1.2579 1.2497 1.2513 1.2671 1.3748 Pound Sterling 2.0161 1.9803 1.9573 2.0873 2.1023 Euro 1.7495 1.6071 1.6621 1.6837 1.5267 100 Japanese Yen 1.5780 1.5672 1.2840 1.1996 1.1364 Malaysian Ringgit 0.4111 0.4046 0.3973 0.3873 0.3534

Banking and FinanceCommercial Banks' Assets/

Liabilities (S$m)855,811.4 911,009.0 973,226.8 1,059,642.3 1,057,520.6

Growth Rate (% change) 9.5 6.4 6.8 8.9 -0.2

Finance Companies' Assets/ Liabilities (S$m)

12,165.3 14,967.5 14,985.7 15,975.7 17,409.8

Growth Rate (% change) 5.6 23.0 0.1 6.6 9.0

Merchant Banks' Assets/ Liabilities (S$m)

87,851.1 92,411.0 84,944.9 96,256.8 106,583.2

Growth Rate (% change) -2.1 5.2 -8.1 13.3 10.7

Asian Currency Units' Assets/ Liabilities (US$m)

1,019,532.9 1,093,264.6 1,180,703.6 1,190,631.8 1,155,822.6

Growth Rate (% change) 5.0 7.2 8.0 0.8 -2.9

InsuranceLife Insurers' Assets/Liabilities (S$m) 133,905.4 148,592.5 153,208.7 168,795.7 179,188.3 Growth Rate (% change) 1.5 11.0 3.1 10.2 6.2

General Insurers' Assets/Liabilities (S$m) 27,209.4 26,267.6 26,484.0 28,606.2 30,393.1 Growth Rate (% change) 56.1 -3.5 0.8 8.0 6.2

CPFExcess of Contributions Over

Withdrawals (S$m)14,184.8 14,321.6 13,666.8 12,423.3 13,323.9

Domestic Capital Market Net Funds Raised in Domestic

Capital Market (S$m)82,763.7 78,664.9 100,252.1 96,566.1 45,565.0

Note: Domestic interbank rates have been discontinued with effect from 1 January 2014 and replaced with S$ SIBOR. US$ SIBOR rates have been also replaced with the US$ LIBOR, the most widely-used US$ interest rate benchmark, so as to align with the larger global US$ market.


NUMBER OF FINANCIAL INSTITUTIONSIN SINGAPORE

End-March 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Banks 108 113 114 120 120 123 123 124 126 124Local1 5 6 6 7 6 6 6 5 5 5 Foreign 103 107 108 113 114 117 117 119 121 119 Full banks 24 24 27 25 26 26 27 28 28 28 Wholesale banks2 36 42 41 46 50 52 53 55 56 53 Offshore banks 43 41 40 42 38 39 37 36 37 38

(Banking offices including head offices and main offices) (399) (408) (409) (421) (428) (432) (425) (428) (432) (431)

Asian Currency Units 154 158 161 162 163 165 161 159 160 155Banks 106 111 112 117 117 120 120 121 123 122Merchant banks 48 47 49 45 46 45 41 38 37 33

Finance Companies 3 3 3 3 3 3 3 3 3 3(Finance companies' offices including head offices)

(39) (39) (39) (39) (39) (39) (39)

(39) (39) (39)

Merchant Banks 49 49 50 46 47 46 42 39 38 34

Insurance Companies 153 151 158 158 157 164 168 177 181 186Direct insurers 61 59 62 64 63 70 72 79 80 79Reinsurers 27 25 27 26 28 29 28 31 31 32Authorised reinsurers 5 5 6 6 6 6 6 6 6 5Captive insurers 60 62 63 62 60 59 62 61 64 70

Insurance Brokers 62 65 66 63 64 67 69 71 74 75

Representative Offices 43 45 36 32 37 38 40 37 39 41Banks 43 45 36 30 34 36 38 36 38 40Merchant banks - - - - - - - - - -Insurance3 - - - 2 3 2 2 1 1 1

International Money Brokers 10 10 10 10 10 9 9 9 10 10

NUMBER OF FINANCIAL INSTITUTIONS IN SINGAPORE


End-March 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Banks 108 113 114 120 120 123 123 124 126 124Local1 5 6 6 7 6 6 6 5 5 5 Foreign 103 107 108 113 114 117 117 119 121 119 Full banks 24 24 27 25 26 26 27 28 28 28 Wholesale banks2 36 42 41 46 50 52 53 55 56 53 Offshore banks 43 41 40 42 38 39 37 36 37 38

(Banking offices including head offices and main offices) (399) (408) (409) (421) (428) (432) (425) (428) (432) (431)

Asian Currency Units 154 158 161 162 163 165 161 159 160 155Banks 106 111 112 117 117 120 120 121 123 122Merchant banks 48 47 49 45 46 45 41 38 37 33

Finance Companies 3 3 3 3 3 3 3 3 3 3(Finance companies' offices including head offices)

(39) (39) (39) (39) (39) (39) (39)

(39) (39) (39)

Merchant Banks 49 49 50 46 47 46 42 39 38 34

Insurance Companies 153 151 158 158 157 164 168 177 181 186Direct insurers 61 59 62 64 63 70 72 79 80 79Reinsurers 27 25 27 26 28 29 28 31 31 32Authorised reinsurers 5 5 6 6 6 6 6 6 6 5Captive insurers 60 62 63 62 60 59 62 61 64 70

Insurance Brokers 62 65 66 63 64 67 69 71 74 75

Representative Offices 43 45 36 32 37 38 40 37 39 41Banks 43 45 36 30 34 36 38 36 38 40Merchant banks - - - - - - - - - -Insurance3 - - - 2 3 2 2 1 1 1

International Money Brokers 10 10 10 10 10 9 9 9 10 10

1 Local banks comprise five full banks. 2 Previously known as restricted banks. 3 Data is unavailable for the period between 2007 and 2009. 4 Regulation of real estate investment trust management came into effect on 1 August 2008. 5 Regulation of credit rating services came into effect on 17 January 2012. 6 Registration of fund management companies commenced under an enhanced regulatory regime which came

into effect on 7 August 2012.

End-March 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Licensed Financial Advisers 67 69 73 71 67 67 62 58 60 62

Capital Markets Services Licensees

183 215 221 224 251 250 295 443 493 533

Dealing in Securities 77 93 90 99 98 94 106 118 123 137Trading in Futures Contracts

40 46 50 48 47 50 52 59 60 68

Advising on Corporate Finance

36 37 37 34 33 34 37 40 42 40

Fund Management 97 110 113 107 118 119 158 289 335 367Leveraged Foreign Exchange Trading

14 18 19 19 19 20 23 24 24 27

Securities Financing 15 16 16 17 18 17 17 17 17 17Providing Custodial Services for Securities

34 38 40 39 40 40 38 37 37 37

Real Estate Investment Trust Management4

- - 1 7 22 23 26 31 34 36

Providing Credit Rating Services5

- - - - - - 3 3 4 4

Licensed Trust Companies 31 35 38 40 48 50 51 52 54 53

Registered Fund Management Companies6

- - - - - - 74 236 275 273

NUMBER OF FINANCIAL INSTITUTIONS IN SINGAPORE


ANCHOR OF ECONOMICAND FINANCIALSTABILITY


THE ECONOMY

SUBDUED GROWTH IN THE GLOBAL ECONOMY Global economic growth slowed in 2015 to 3.9% from 4.1% in 2014. While the G3 economies remained on a moderate growth trajectory, Asia ex-Japan recorded weaker outturns.

Amid muted external demand, the United States (US) and Eurozone posted relatively firm GDP gains on the back of strong private consumption, but Japan’s recovery was more tentative. In Asia ex-Japan, China’s growth moderation and the generalised slowdown in global trade flows have weighed on the region’s economic activity, particularly in the externally-oriented economies. However, for the second consecutive year, resilient domestic demand in the ASEAN-4 economies provided some offsetting support.

Major central banks have pursued increasingly divergent monetary policies. The steady recovery in the US economy over the past few years enabled the Federal Reserve to raise rates by a notch in December 2015, though the pace of subsequent policy normalisation will likely be gradual. In comparison, sluggish growth and below-target inflation have compelled the European Central Bank (ECB) and the Bank of Japan (BOJ) to intensify monetary easing. The ECB initiated a full-fledged Quantitative Easing programme in March 2015 and subsequently lowered interest rates further into negative territory in December. In January 2016, the BOJ joined the ECB in

ANCHOR OF ECONOMICAND FINANCIAL STABILITY

implementing a negative interest rate policy while the latter expanded the size and scope of its asset purchase programme in March.

A MODERATE G3 RECOVERY

The US economy marked its sixth year of economic expansion in 2015, with total output rising by 2.4%, similar to 2014. Improved consumer confidence on the back of steady employment growth and a strong housing market spurred private consumption and anchored the recovery. The pickup in consumer spending, however, was partly offset by weaker US exports due to the stronger US dollar and tepid global demand. Gross fixed capital formation also eased considerably in the second half of 2015, on account of cutbacks in energy-related investment. The continuation of these trends, coupled with some pullback in consumer expenditure, resulted in sluggish GDP growth of 1.1% on a q-o-q seasonally adjusted annualised rate (SAAR) basis in Q1 2016.

Growth in the Eurozone picked up to 1.6% in 2015, from 0.9% in the previous year, as stronger domestic demand more than compensated for the drag from net exports. Private consumption provided the largest contribution, with household purchasing power boosted by lower energy prices. In comparison, net exports fell, reflecting anaemic demand from China and other emerging economies. Across the Eurozone, growth remained uneven: Spain posted a stellar performance, while Italy and France continued to lag behind the rest of the bloc. Nonetheless, the pace of expansion in the region quickened to 2.2% in Q1 2016 on a q-o-q SAAR basis, in an encouraging start to this year.

Japan’s GDP rose modestly by 0.5% in 2015, after staying flat in 2014, as the negative effects of the April 2014 consumption tax hike waned. Nonetheless, the recovery in domestic demand was constrained by subdued private consumption which was, in turn, held down by slower growth in nominal wages.

Global economic growth slowed in 2015 to

3.9%from 4.1% in 2014


Meanwhile, weak external demand, especially from the Asian markets, weighed further on economic activity. In Q1 2016, growth recovered to 1.9% q-o-q SAAR from −1.8% in Q4 2015, primarily due to a bounce-back in household spending after a weak showing in the previous quarter. SLOWDOWN IN ASIA EX-JAPAN

Growth in the Asia ex-Japan economies eased to 4.7% in 2015 from 5.2% in the previous year. Reflecting the transitional frictions associated with the ongoing economic rebalancing and structural reforms, the Chinese economy grew at a more moderate pace of 6.9% in 2015, compared to 7.3% in 2014. The overall expansion was underpinned by the services-producing industries, which were buoyed by strong demand for financial services. Meanwhile, the goods-producing industries registered lower growth, as segments of the manufacturing sector continued to face excess capacity. In Q1 2016, GDP growth in China slipped to 6.7% on a y-o-y basis, with fiscal and monetary policy helping to buffer the extent of the slowdown.

With growth easing in China, a hesitant recovery in the G3, and a protracted slump in global commodity markets, exports from the ASEAN-4 countries stagnated in 2015. Nevertheless, private consumption growth stayed resilient, supported by still favourable labour market conditions, while investment picked up on a surge in government capital spending in the second half of 2015. As firmer domestic demand partially offset trade weakness, ASEAN-4 GDP growth dipped only marginally from 4.7% in 2014 to 4.6% in 2015.

The Northeast Asian-3 economies (NEA-3) grew at a sluggish pace of 1.9% in 2015, down from 3.2% in 2014, due to disappointing exports amid lacklustre global demand. However, household

spending remained relatively firm, even though signs of a softening in the labour market had emerged towards the end of the year due, in part, to persistent weakness in the manufacturing and tourism sectors. HEIGHTENED FINANCIAL VULNERABILITIES AND RISKS

Global financial markets turned volatile in early 2016. Weak commodity prices and economic and financial uncertainties in China, weighed on investor sentiment. This triggered substantial selloffs in global equity markets and renewed capital outflows from emerging markets (EMs).

Commodity prices have remained depressed, and signs of stress have emerged in commodity-related firms and sovereigns. Default rates in commodity-related sectors are expected to rise, and commodity-exporting economies could face greater strains on fiscal sustainability and ensuing capital outflows.

Financial stability concerns have persisted in China as rising corporate defaults affected the asset quality of the Chinese banking system, while heightened asset market volatility has exacerbated the pace of capital outflow. Policymakers continue to face a delicate balance between near-term economic performance and asset market stability on the one hand, and longer-term structural reforms on the other. Strong intra-regional linkages could increase contagion to other Asian economies and banking systems from a China-related shock.

The US increased its interest rate for the first time in more than nine years in December 2015. While there are signs that the US economy is picking up, fragility in global financial markets continues to throw uncertainty over the pace of further rate hikes. The greater use of unconventional monetary policy is also increasing market unease. The impact of divergent monetary policies, as well as the impact of negative interest rates, will continue to be closely watched. Higher financing costs following rate normalisation by the US Federal Reserve and slower EM growth has stoked concerns over household and corporate indebtedness in the region.

Growth in the Asia ex-Japan economies eased to

4.7% in 2015, from 5.2% in the previous year




Looking ahead, uncertainty over developments in the United Kingdom (UK) and Eurozone could result in further financial market volatility, with possible knock-on effects on financial intermediation and capital flows globally, and economic growth more generally. LOW GLOBAL INFLATION

Global inflation fell to low levels in 2015, dragged down by declining energy prices and sluggish growth. Headline inflation in the G3 economies dropped sharply to 0.2%, from 1.3% in 2014. In the US and Eurozone, prices were unchanged in 2015, mainly due to the disinflationary effects of falling energy prices. Nonetheless, core inflation stayed firm at 1.8% in the US, reflecting diminishing slack in the labour market. Japan’s CPI inflation rate was 0.8%, although this was largely attributable to the residual effects of the consumption tax hike in the previous year. In Asia ex-Japan, inflation fell in 2015, as food and fuel costs eased in China and India. Inflation in the NEA-3 was similarly weighed down by declining commodity prices, which also capped ASEAN-4 price gains. In Thailand, inflation

turned negative, as underlying price pressures weakened in line with a protracted period of below-trend growth.

In the first quarter of 2016, global headline inflation, while still low, edged up slightly to 1.3% y-o-y from 1.0% in Q4 2015. Price developments were uneven among the G3 economies, with inflation picking up in the US as the effects of low energy prices dissipated, but moderating in the Eurozone and Japan due to relatively subdued growth. Meanwhile, inflation held steady in Asia ex-Japan at 3.3% y-o-y, driven mainly by food price increases. SINGAPORE’S ECONOMIC GROWTH MODERATED IN 2015

Singapore’s economic growth drifted down further in 2015, with real GDP expanding by 2.0% from 3.3% in 2014 (see Chart 1). The slower growth momentum was broad-based amid a synchronised downshift in the Chinese and regional economies. However, some production activities were more heavily affected due to higher direct exposure to sector-specific headwinds buffeting the global IT and oil & gas industries. At the same time, manpower-reliant

Chart 1: Singapore’s Real GDP Growth

Headline inflation in the G3 economies dropped sharply to

0.2% in 2015,from 1.3% in 2014

0

2

4

6

8

The Singapore economy expanded by a slower

2.0% in 2015,compared to 3.3% in 2014



sectors continued to face transitory supply-side constraints as they adjusted to ongoing efforts to boost productivity. From the domestic sectoral perspective, the moderation stemmed largely from the manufacturing sector, which saw a full-year contraction. The slowdown was particularly pronounced in the electronics and marine & offshore engineering industries, reflecting the impact of a worldwide slowdown in electronics demand and a pullback in global oil exploration and production expenditures, respectively. Financial services also turned in a more modest performance, though still stronger than the rest of the economy, as loan growth to East Asia and the domestic trade-related industries eased. Industries dependent on domestic demand likewise slowed, in part due to continued weakness in private sector construction and softer demand for real estate business services.

Growth momentum in the Singapore economy eased at the start of this year, coming in at 0.2% on a q-o-q SAAR basis in Q1 2016, after an expansion of 6.2% in Q4 2015. The subdued outturn stemmed largely from a cyclical pullback in the financial services sector, following a surge in Q4 2015 when fees and commissions were paid out for the year. Softening regional trade flows also weighed on the trade-related services. In comparison, the manufacturing sector saw a rebound on the back of a boost to output in the pharmaceutical segment. Meanwhile, a pickup in non-residential building activities shored up growth in the domestic-oriented sectors.

Looking ahead, the Singapore economy is expected to continue on a modest and uneven growth path, with further uncertainty arising from recent developments in the UK and the Eurozone. Nonetheless, domestic-oriented sectors will remain generally resilient, buttressed by steady demand for services, such as healthcare and education. For 2016 as a whole, the Singapore economy is projected to expand by 1–3%.

Over the medium term, as productivity growth gains momentum, the economy is expected to settle on a sustainable growth trend underpinned by a skilled labour force, an enhanced capital stock, and technology-intensive production processes.

INFLATION FELL DUE TO LOWER OIL PRICES

MAS Core Inflation, which excludes the costs of accommodation and private road transport, eased to 0.5% in 2015, from 1.9% in 2014. This was mainly due to the sharp decline in the cost of oil-related items amid weaker global oil prices. The disinflationary effects of budgetary1 and other one-off measures2, as well as the more modest pass-through of cost increases to consumer prices, also contributed to lower core inflation last year.

CPI-All Items inflation moderated to −0.5% in 2015, from 1.0% in the preceding year, reflecting the more gradual increase in core consumer prices as well as the dampening effects of lower accommodation and private road transport costs. Car prices and housing rentals softened alongside an expansion in Certificate of Entitlement (COE) quotas and the completion of a large number of residential units last year.

In the first quarter of 2016, core and overall inflation diverged. MAS Core Inflation picked up to 0.5% from 0.2% in Q4 2015 as temporary disinflationary influences, such as the enhanced medication subsidies introduced at the beginning of 2015, abated. CPI-All Items inflation remained on a downtrend, falling to −0.8% in Q1 2016 from −0.7% in the previous quarter, as a result of larger declines in housing rentals and car prices (see Chart 2).

MAS Core Inflation, which excludes the costs of accommodation and private road transport, eased to

0.5% in 2015,from 1.9% in 2014

1 The budgetary measures include medical subsidies under the Pioneer Generation Package, the reduction in the concessionary foreign domestic worker levy, as well as the abolition of national examination fees for Singaporeans.

2 These include SG50-related price promotions as well as temporary supermarket discounts in the second half of 2015.



Looking ahead, external sources of inflation are likely to remain subdued, given ample supply buffers in the major commodity markets and weak global demand. Notably, global oil prices are expected to average lower for the whole of 2016 compared to 2015. On the domestic front, softer employment conditions will lead to a slowdown in wage growth. In addition, the pass-through of domestic costs to consumer prices will be constrained by the subdued economic growth environment.

MAS Core Inflation is expected to pick up gradually over the course of this year, reflecting the diminishing drag from oil prices as well as from budgetary and other one-off measures. However, this increase will be milder than earlier anticipated, reflecting the weaker external price outlook and domestic growth prospects, as well as reduced tightness in the labour market.

Meanwhile, the drag to CPI-All Items inflation from non-core components of the CPI basket is expected to intensify this year, as a large supply of car COEs and residential units comes on-stream.

MONETARY POLICY

In 2015, GDP growth in the Singapore economy slowed to 2.0% from 3.3% in 2014. CPI-All Items inflation turned negative and MAS Core Inflation moderated to 0.5% from 1.9% in the previous year. The decline in core inflation was due to the

disinflationary effects of lower oil prices, as well as budgetary and other one-off measures.

Singapore’s monetary policy was eased in a calibrated manner, in line with the changing macroeconomic environment. Having already reduced the rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) policy band in an off-cycle move in January 2015, MAS maintained the policy stance in April last year. In October 2015, MAS eased policy further by reducing the rate of appreciation of the policy band slightly, in view of reduced price pressures alongside a weaker growth outlook.

Going into 2016, MAS assessed that the tightness in the labour market had eased, and MAS Core Inflation was expected to pick up more gradually than earlier anticipated. At the same time, core inflation was likely to average below 2.0% over the medium term. Singapore’s GDP growth outlook had also moderated against a less favourable external environment. Accordingly, in April 2016, MAS set the rate of appreciation of the S$NEER policy band at zero percent. There was no change to the width of the band and the level at which it was centred. This was not a policy to depreciate the domestic currency, but a measured adjustment following the policy easing undertaken last year, and will ensure price stability over the medium term. Chart 3 traces the evolution of monetary policy against the backdrop of changes in key macroeconomic variables in recent years.

Chart 2: Contribution to CPI-All Items Inflation

-2

-1

0

1

2

3



Chart 3: Key Macroeconomic Variables and the Monetary Policy Stance

-2

10

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02011 2012 20132 014 2015 2016Q1

% o

f P

ote

ntia

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%Y

OY

%Y

OY

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Modest & Gradual AppreciationNeutralPolicy

Output Gap

2016Q1:0.5%

2016Q1:1.8%

-0.8%

Real GDP Growth

-1

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PDG laitnetoP fo

%

-2

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% Y

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2010 2011 2012 2013 2014 2015 2016

YOY

%

Real GDP Growth

MAS Core Inflation

CPI-All Items Inflation

Output Gap

S$NEER

2016Q1:0.5%

Q1

96

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)001=0102 1Q( xednI

Increase Slope Slightly & Widen Band

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Neutral Policy Modest & Gradual Appreciation Neutral

Policy



MACROPRUDENTIAL POLICY

Since 2009, MAS has introduced a series of measures to ensure stability in the property market and to encourage financial prudence among borrowers. Private residential property prices have declined gradually. From the peak in Q3 2013, overall prices have declined by an average 0.9% each quarter over 10 consecutive quarters. Alongside the gradual moderation in prices, transaction volumes – across new sales, resales and subsales – have declined and remained subdued. The current transaction activity is less than half of that seen between 2010 and 2012. As a result, the growth in housing loan volumes has continued to moderate and the risk profile of housing loans has improved.

The average tenure of new loans has declined from 30 years in 2012 to 25 years in Q1 2016. The share of new private housing loans with loan-to-value ratios above 70% fell from 77% in Q2 2010 to below 60% in Q1 2016. The improvement in loan profile underpins the banking system’s resilience to risks arising from the property market. The rise in mortgage rates remains manageable for the majority of households and does not pose significant repayment risk for banks’ housing loan portfolios. Our stress test shows that the banking system would be able to withstand a stress scenario that includes a sharp correction in property prices.

The measured decline in property prices suggests a benign scenario with property prices settling at sustainable levels over time. MAS remains vigilant for signs of renewed froth in the property market on the back of still-elevated prices in certain market segments. At the same time, uncertainties in the financial markets and headwinds in the external outlook could add to risks of a sharper-than-warranted price correction. MAS will continue to monitor the

property market carefully for risks to financial stability and take appropriate measures to maintain a stable and sustainable market.

MANAGEMENT OF LIQUIDITY

ENHANCING MAS’ STANDING FACILITY

As part of ongoing efforts to enhance MAS’ liquidity facilities, the range of acceptable collateral at MAS’ Standing Facility was further expanded in May 2015 to include Singapore statutory board debt securities and Japanese Yen cash under the MAS-BOJ cross-border collateral arrangement (CBCA).

Singapore Statutory Board Debt SecuritiesWith the inclusion of SGD debt securities issued by Singapore statutory boards as eligible collateral for MAS’ Standing Facility, banks can now hold a broader pool of high quality SGD assets to meet their liquidity needs in times of stress.

Japanese Yen Cash Under MAS-BOJ CBCAMAS enhanced the MAS-BOJ CBCA to allow banks in Singapore to pledge Japanese Yen cash at MAS’ Standing Facility to obtain SGD liquidity. This is in addition to the Japanese Government Bonds and Japanese Treasury Discount Bills that are already accepted under the CBCA. This collaboration reinforces the commitment of MAS and BOJ to support the long-standing economic and financial relationship between Singapore and Japan.

RENEWAL OF THE MAS-PEOPLE’S BANK OF CHINA CURRENCY SWAP

MAS renewed the bilateral currency swap arrangement with the People’s Bank of China (PBC) in March 2016 for a further term of

From the peak in Q3 2013, overall private residential property prices have declined by an average

0.9% each quarter

2013

New private housing loanswith loan-to-value ratios above 70% fell from77% in Q2 2010 to

below 60% in Q1 2016



three years. The original arrangement was established in 2010 and first renewed in 2013. The arrangement is a key pillar of cooperation between MAS and the PBC to strengthen economic resilience and financial stability. Under the arrangement, up to RMB 300 billion is available to eligible financial institutions operating in Singapore. The arrangement enhances banks’ confidence in carrying out their business in the two markets, and enables both central banks to provide foreign currency liquidity to stabilise financial markets. The arrangement is part of the initiatives announced at the 12th Joint Council for Bilateral Cooperation in October 2015, to broaden the cross-border RMB channels between Singapore and China.

MANAGEMENT OF OFFICIAL FOREIGN RESERVES

As at 31 March 2016, MAS held S$332 billion (US$246 billion) of official foreign reserves (OFR) on its balance sheet.

MAS invests the OFR conservatively in a well-diversified portfolio of cash, bonds and equities that seeks to achieve good long-term returns. The portfolio is diversified across advanced and emerging market economies, with investment-grade bonds in the advanced economies comprising the largest allocation in the portfolio. About three-quarters of the OFR are denominated in the G4 currencies i.e. USD, EUR, JPY and GBP. Within the G4 currencies, the USD forms the bulk. Diversification across markets, assets and currencies helps to enhance the resilience of MAS’ portfolio across various market conditions.

In MAS’ financial statements, the OFR are accounted for on a lower of cost and market valuation basis. A valuation provision is made against investment gain when the market value of an OFR asset falls below cost. An unrealised gain is not recognised when the market value of an OFR asset rises above cost.

MAS’ financial results are reported in SGD. The reported value of the OFR hence depends on the exchange rate movements of the SGD vis-à-vis the foreign currencies in which the reserves are

held. Such currency movements will result in translation effects in MAS’ financial statements. These translation effects have no impact on the international purchasing power of the OFR, and hence do not affect MAS’ ability to conduct exchange rate policy or provide a buffer in the event of a sharp deterioration in Singapore’s balance of payments. Accordingly, it would not be meaningful to hedge against the SGD to mitigate currency translation effects.

INVESTMENT PERFORMANCE

Chart 4 shows the investment performance of the OFR for the last five financial years. The gains/losses of OFR, as represented by the gold bars in Chart 4, comprise two separate components – investment gains/losses (blue bars) and currency translation effects (grey bars). Holding the SGD exchange rate constant to strip out currency translation effects, the OFR recorded an investment gain of S$5.2 billion in FY 2015/16. As in previous years, the investment gain was mainly from interest income and realised capital gains from the sale of OFR assets. The investment gain was, however, lower compared to prior years due to higher valuation provisions. The increase in provisions was due mainly to the market values of some equity securities in MAS’ portfolio falling below cost, as global equity markets declined in FY 2015/16.

In FY 2015/16, the currency translation effect was negative due primarily to the strengthening of the SGD against the USD and the GBP. The exchange rate movements of the SGD against the G4 currencies for the last five financial years are shown in Table 1.

Taking the investment gains/losses together with the currency translation effects, MAS’ annual gains/losses3 from OFR over the last five financial years ranged from –S$10.1 billion to S$16.5 billion.

3 Gross of investment, interest and other expenses.



Chart 4: Gains/Losses of the OFR

Table 1: Exchange Movements of SGD against G4 Currencies (%)

SGD4 vs. FY2011/12 FY2012/13 FY2013/14 FY2014/15 FY2015/16

USD 0.3 1.4 -1.4 -8.3 1.9

EUR 6.8 5.3 -8.3 17.6 -4.0

JPY -0.4 16.0 7.9 6.7 -4.5

GBP 0.6 6.6 -10.1 3.0 5.2

0

20.0

-25.0

12.7

3.4

-9.3

-19.5

-10.1 -9.2

-3.3

9.410.6

16.5

1.2 1.9

5.9

10.4

5.2

FY2011/12

Investment Gains/Losses

Gai

ns/L

osse

s of

OFR

(S$’

b)

Currency Translation Effects Gains/Losses of OFR

FY2012/13 FY2013/14 FY2014/15 FY2015/16

4 Positive figures represent an appreciation of the SGD, while negative figures represent a depreciation of the SGD against the foreign

currency over the financial year.


ROBUST, TRUSTED, DYNAMIC ANDPURPOSEFUL FINANCIAL CENTRE

A ROBUST FINANCIAL CENTRE

INDUSTRY TESTS

Industry-Wide Stress TestsMAS conducts annual industry-wide stress tests of financial institutions in Singapore. In 2015, the macroeconomic stress scenario applied across the financial industry incorporated a weakening of the external economic environment stemming from a more aggressive than expected rise in the US policy rate, prolonged slowdown in China, and recession in core Eurozone and Japan. This in turn triggered a slowdown in Singapore’s economic growth, including a property market correction. Direct insurers were also subject to insurance-specific stress scenarios such as a flu pandemic. The stress tests showed that Singapore’s financial system would remain resilient under the stress scenario. As with previous years, MAS shared the stress test results with participating financial institutions, and engaged them on their results and actions to mitigate the effects from plausible risk events.

Cybersecurity Table-Top ExerciseCyber Security Agency and MAS jointly organised and conducted a table-top exercise (TTX) in May 2015 to assess the financial sector’s capabilities and readiness to detect, respond and recover

from cyber attacks. During the TTX, key financial institutions tested their cybersecurity measures and recovery plans across a range of cyber threat scenarios, including the sector’s ability to execute a coordinated response. MAS will continue to work with various stakeholders to further strengthen the sector’s cyber resilience.

ENHANCING THE RESOLUTION REGIME

In June 2015, MAS published a policy consultation on proposals to enhance MAS’ resolution regime to promote the orderly and efficient resolution of distressed financial institutions, taking into account the Financial Stability Board (FSB)’s Key Attributes of Effective Resolution Regimes for Financial Institutions and circumstances in Singapore. MAS proposed recovery and resolution planning requirements for financial institutions that are systemically important or that perform critical functions. These financial institutions are also required to adopt measures to address deficiencies in their recovery plans, and remove impediments to resolvability.

To facilitate orderly resolution, MAS proposed to have powers to impose temporary stays on early termination rights of financial contracts. Temporary stays can also be applied to contracts that are non-financial in nature, but that are necessary to ensure continuity of essential services and functions of Participants united in response to simulated cyber attacks

Participants sharing their cyber strategies with Dr Yaacob Ibrahim, Minister for Communications and Information and Minister-In-Charge of Cyber Security



a financial institution. We also proposed to have powers to recapitalise a financial institution by writing down its unsecured subordinated creditor claims or by converting them into equity stakes in the financial institution.

MAS also consulted on a creditor compensation framework, and proposed to fund costs relating to resolution expenses through ex-post funding arrangements.

BANKING

Strengthening ResilienceIn April 2015, MAS issued a framework for identifying and supervising domestic systemically important banks (D-SIBs) in Singapore, and the inaugural list of D-SIBs. D-SIBs are banks that can have a significant impact on the stability of the financial system and the proper functioning of the broader economy. D-SIBs are required to comply with policy measures to address the risks that they can pose. These include local incorporation of retail operations for foreign bank branches with a significant retail presence, higher loss absorbency, recovery and resolution planning, and liquidity coverage ratio requirements.

In 2015, MAS conducted a thematic inspection of several banks in Singapore to assess the credit underwriting standards and practices of their corporate lending business. Overall, we observed that the banks’ underwriting standards and practices were generally sound, though there were areas for improvement. In February 2016, we issued an information paper to share our observations from the thematic inspection with the industry.

Introducing Countercyclical Capital Buffer MAS introduced the Countercyclical Capital Buffer (CCyB) on 1 January 2016. The CCyB is a part of the Basel III capital framework, and is intended to mitigate pro-cyclicality and protect the banking sector during stress periods. MAS supports the Basel Committee on Banking Supervision’s objective to address the build-up of systemic risks from excessive broad-based credit growth, and has included the CCyB in its macroprudential toolkit. Based on prevailing economic and financial conditions, we have set a CCyB rate of 0% for Singapore.

Enhancing Regulatory and Licensing FrameworksMAS continues to review and enhance our regulatory framework for banks, benchmarking it against international standards. In 2016, MAS proposed amendments to the Banking Act to enhance depositor protection by strengthening prudential safeguards, corporate governance, and risk management controls of banks. The amendment Act was passed in Parliament in February 2016.

In June 2015, MAS also announced that we will remove the accounting divide between the Domestic Banking Unit (DBU) and the Asian Currency Unit (ACU). The DBU-ACU framework was implemented in 1968 to safeguard financial stability while facilitating growth of the Asian Dollar Market. While it has served us well, recent developments have reduced its relevance. Regulatory developments since the global financial crisis have broadly aligned the rules that govern banks’ offshore activities and those for domestic banking businesses in Singapore. We will therefore remove the DBU-ACU divide to reduce administrative burden on banks.

MAS has streamlined the bank licensing framework by phasing out the Offshore Bank licence. The revised two-tier licensing framework distinguishes between Full Banks with access to the retail market and Wholesale Banks that specialise in wholesale business. MAS has stopped issuing Offshore Bank licenses since April 2016, and we will convert all existing Offshore Banks to Wholesale Banks over time.

INTERNATIONAL SUPERVISORY COOPERATION

Consolidated Supervision and Cooperation with Foreign RegulatorsMAS continues to participate in several insurance group supervisory colleges as host supervisor. Participation in these meetings strengthens MAS’ cooperation with the home supervisors of foreign insurers. It also allows MAS to better understand the activities of the insurance groups in other jurisdictions which may have an impact on their operations in Singapore.

MAS also participates in supervisory college meetings of international and regional banks.



MAS hosted the 2015 APAC Recovery and Resolution Planning Workshop for UBS and Credit Suisse, two Global Systemically Important Banks (G-SIBs), from 13 to 14 August 2015. The workshop facilitated information exchanges between home and host supervisors to support recovery and resolution planning of these banks. In addition, MAS and the ECB Joint Supervisory Team hosted the annual Deutsche Bank APAC-Americas supervisory college in Singapore for non-EU supervisors from 23 to 25 November 2015.

MAS is also a member of the LCH supervisory college. The college, chaired by the Bank of England, discusses supervisory issues pertaining to LCH’s operations in the various jurisdictions.

Crisis Management Group MeetingsMAS is a member of the Crisis Management Group (CMG) of six of the G-SIBs that have significant operations in Singapore and participates in their CMG meetings. The meetings facilitate information exchanges between home and host authorities and the establishment of institution-specific cross-border cooperation agreements to support recovery and resolution planning. They enhance preparedness and cross-border coordination for crisis management, including recovery and resolution planning, for these institutions.

MAS is also a member of the CMG of one Global Systemically Important Insurer (G-SII) and a member of the sub-CMG of one G-SII.

SECURITIES, FUTURES AND OVER-THE-COUNTER DERIVATIVES

Crowdfunding for Small and Medium EnterprisesIn June 2016, MAS published its responses to the feedback received from a public consultation on facilitating securities-based crowdfunding (SCF). MAS’ responses seek to help start-ups, and small and medium enterprises access alternative methods of raising funds through SCF, while ensuring that there are sufficient safeguards for investors.

Amendments to the Singapore Code on Take-overs and Mergers In February 2016, on the advice of the Securities

Industry Council (SIC), MAS revised the Singapore Code on Take-overs and Mergers to keep pace with market developments and evolving international practices. The key amendments included providing greater clarity on the applicable procedures and timelines for competing offers and the conduct of a company’s board of directors when faced with an offer. SIC will continue to review take-over rules and practices to ensure the regime is in line with international best practices.

Market Structure and PracticesThe minimum trading price requirement of 20 cents for Mainboard listed issuers was introduced on 1 March 2015. The Singapore Exchange (SGX) continued to work closely with affected Mainboard companies to explore options to meet the minimum trading price of 20 cents. The objective of the requirement is to improve the overall quality of the securities market and address risks of low-priced securities being more susceptible to excessive speculation and potential market manipulation.

Other securities market initiatives, which were extensively consulted in 2014, will be introduced in phases, with intervals of at least six to 12 months between major initiatives. Short position reporting will be introduced in 2017, followed by collateralised trading in 2018. This will provide market participants with adequate time to adjust to the changes, and also allow MAS and SGX to work closely with the industry to educate the investing public of the upcoming initiatives.

MAS has completed a review of the self-regulatory roles performed by exchanges. Starting from 2016, MAS will be primarily responsible for supervision and inspection of exchange members’ compliance with statutory requirements. Exchanges will continue to supervise their members for risk management and operational requirements. This arrangement will lead to greater supervisory efficiency and effective oversight of risks posed by intermediaries.

MAS will also enhance our surveillance capabilities to monitor trading activities within and across exchanges to detect potential misconduct and market abuse. The new surveillance capabilities will facilitate early detection of misconduct, and support more expedient investigations and tough enforcement actions.



As the sole securities exchange operator, SGX will retain its role as listing authority. This role has been enhanced with the 15 September 2015 establishment of the SGX Listings Advisory Committee, Listings Disciplinary Committee and Listings Appeals Committee to strengthen the listing policymaking and review process, and enhance how Listing Rules are enforced.

Over-The-Counter Derivatives ReformsMAS remains fully committed to meeting the Group of 20/FSB over-the-counter (OTC) derivative reforms. We have made good progress in implementing the reforms in Singapore.

MAS expects to complete the mandatory trade reporting requirement by 1H 2017. Following the commencement of the reporting regime for interest rate and credit derivatives contracts in 2014, banks started the mandatory reporting of foreign exchange (FX) derivatives in May 2015. In January 2016, MAS consulted on proposals to implement the reporting of the remaining asset classes, namely commodity and equity derivatives contracts. The consultation also included proposed revisions to fine-tune the reporting obligations for certain non-bank financial institutions, while maintaining effective data coverage of OTC derivative activities in Singapore.

MAS issued a public consultation in June 2015 setting out proposed requirements for the regulation of OTC derivative intermediaries. In July 2015, MAS also consulted on mandatory clearing requirements for OTC derivatives. The consultation proposed to start the clearing mandate with SGD and USD interest rate swaps, as these are the most widely traded interest rate derivatives in Singapore. Proposals to implement margin requirements for non-centrally cleared OTC derivatives followed in October 2015. Margin requirements would complement MAS’ mandatory clearing requirements for OTC derivatives to better manage potential systemic risks posed by the OTC derivatives sector.

MAS has also focused on ensuring that the financial market infrastructure is in place to support the OTC derivatives reforms. To ensure that clearing infrastructures are in place for mandatory clearing, central counterparties (CCPs) in Singapore have

gained the requisite recognition from both EU and US authorities. In addition to the Singapore Exchange Derivatives Clearing Limited (SGX-DC) being registered with the US Commodities Futures Trading Commission as a Derivatives Clearing Organisation since December 2013, SGX-DC and ICE Clear Singapore were also recognised by the European Securities and Markets Authority as eligible third-country CCPs in 2015. In Singapore, MAS recognised CCPs from the UK (LCH.Clearnet Limited) and US (Chicago Mercantile Exchange Inc.) as Recognised Clearing Houses in February 2016 and May 2016 respectively. MAS expects to recognise more CCPs, which will strengthen accessibility to clearing infrastructure from Singapore.

MAS continues to review other aspects of our OTC derivatives regulatory regime, including conducting an in-depth study on the conditions that would be appropriate for a trading mandate to be implemented in Singapore.

Financial Market InfrastructureMAS issued the Notice on Financial Market Infrastructure (FMI) Standards in August 2015, setting out the principles in the Committee on Payments and Market Infrastructures (CPMI)-International Organisation of Securities Commissions (IOSCO) Principles for Financial Market Infrastructures (PFMI) for which licensed trade repositories and approved clearing houses regulated by MAS are required to comply.

With the transfer of provisions governing the Central Depository System (CDS) from the Companies Act to the Securities and Futures Act (SFA), MAS issued the Notice on FMI Standards for Central Securities Depositories which sets out the PFMI standards for CDS in June 2016.

Supervisory ActionOn 24 June 2015, MAS reprimanded SGX for lapses related to SGX’s market outages on 5 November 2014 and 3 December 2014. MAS also directed SGX to improve its recovery capabilities and processes, including:

• Strengthening its monitoring system capabilities to allow timely and accurate problem identification when incidents occur;



• Strengthening its business continuity management and disaster recovery procedures to improve crisis preparedness; and

• Improving its crisis communications processes to provide prompt information to all stakeholders.

MAS is reviewing SGX’s implementation of the remedial measures, which have been verified by an independent expert. Until MAS is satisfied with the completion of these measures, SGX will not increase fees for the securities and derivatives markets. SGX also contributed S$1 million to its Investor Education Fund.

Review of Regulatory Safeguards for Investors To enhance regulatory safeguards for investors investing in capital markets products, MAS announced in September 2015 that we will proceed with proposals to:

• Extend capital market regulatory safeguards to investors in certain non-conventional investment products that are in substance capital raising products; and

• Give investors who meet certain wealth thresholds the choice whether to be treated as an accredited investor with the consequent reduction of regulatory safeguards.

MAS is finalising the legislative amendments to implement these proposals, following a public consultation and further engagement with key stakeholders, for tabling in Parliament in 2H 2016.

ENFORCEMENT

Enforcement ActionsIn April 2015, the highest civil penalty quantum ever imposed by MAS in a single case was announced. Civil penalty action was taken against an individual and his niece for committing insider trading while they were in possession of price-sensitive and non-public information relating to a share acquisition and a mandatory general offer. The individual had also admitted to false trading contraventions. The total civil penalty imposed was S$11,838,000.

In another case, MAS took civil penalty action against a former Managing Director of a foreign

bank for insider trading after he traded on price-sensitive and non-public information relating to a proposed acquisition. The defendant had acquired this information in the course of his work. He paid a civil penalty of S$434,912. This case was significant as the defendant, who also headed the foreign bank’s investment banking operations at the time of the contravention, was based overseas and had committed the offence of insider trading by trading through his wife’s bank account in Singapore.

MAS also took action against two remisiers. The first case was a civil penalty action against a remisier for insider trading after he traded on price-sensitive and non-public information regarding a proposed delisting and cash offer. He paid a civil penalty of S$110,000 and was also prohibited from engaging in regulated activities for a period of two years. In the second case, MAS had reason to believe that a remisier had engaged in a deceptive act when he traded in a client’s securities accounts for his own benefit. To prevent possible further misconduct, MAS prohibited the remisier from engaging in regulated activities for a period of two years.

Between April 2015 and March 2016, MAS took a total of 368 regulatory and enforcement actions against companies and individuals for breaches under the SFA and the Financial Advisers Act (FAA). These actions included reprimands, composition fines, civil penalties and prohibition orders. Where they involve significant breaches of law and regulations in relation to conduct issues, MAS publishes details of our market conduct regulatory actions. In this regard, MAS published a total of eight formal regulatory and enforcement actions against companies and individuals under the SFA and FAA.

Between April 2015 and March 2016, MAS took a total of

368 regulatory andenforcement actionsagainst companies andindividuals breachingthe Securities and Futures Act and the Financial Advisers Act



SECTORAL SECURITY OPERATIONS CENTRE

To enhance the overall cyber security situation awareness of the financial sector, MAS has embarked on the implementation of a Sectoral Security Operations Centre (SOC). The SOC will actively monitor and analyse logs from Critical Infocomm Infrastructure Operators (CIIOs) for early warnings of cyber threats targeting the CIIOs.

INSURANCE

Accident and Health Regulatory FrameworkFollowing the MediShield Life Review Committee’s recommendation to enhance the regulatory and accountability framework for Integrated Shield Plans (IPs), MAS worked with the Ministry of Health and life insurance industry to enhance disclosure requirements for insurance policies, strengthen protection for policyholders and improve the conduct of intermediaries for IPs. MAS also reviewed the disclosure requirements for other accident and health policies, including short term policies.

MAS has refined the proposals based on the feedback received from its public consultation on the proposed accident and health regulatory framework. With effect from 1 November 2015:

• Only Medisave-approved policies may have the word “Shield” in their product names to avoid confusion with non Medisave-approved policies;

• Insurance intermediaries are required to understand their clients’ financial commitments and affordability concerns (including their clients’ hospital ward preferences) to help their clients identify the appropriate coverage;

• Insurance intermediaries are required to highlight free-look periods, exclusions and disclaimers as part of their disclosures; and

• Insurance intermediaries who provide advice on IPs need to undergo specific training.

Certain disclosure requirements for non Medisave-approved policies took effect on 30 June 2016 to give insurers sufficient time for implementation.

Risk Based Capital FrameworkFollowing the second consultation and first comprehensive quantitative impact study (QIS) for the Risk Based Capital (RBC) 2 framework in 2014, MAS has engaged various stakeholders such as insurers, industry associations, external auditors and actuaries to exchange views on RBC 2.

MAS has further refined the proposed RBC 2 framework after reviewing the results of the first QIS and the extensive feedback received. Although the results showed that insurers were well-capitalised, some adjustments were needed to avoid any unintended consequences.

In particular, asset and operational risk charges have been recalibrated and more diversification benefits recognised. MAS has also widened the criteria for the application of a matching adjustment for life business. For cases where a matching adjustment cannot be used, other broader adjustments that similarly recognise the illiquid nature of long-term liabilities have been introduced. These changes will allow insurers to better carry out their important roles in the economy and society on a sustainable basis.

MAS is conducting the third consultation setting out the revised enhancements and second QIS in Q3 2016. Overall, MAS does not expect the insurance industry on the whole to hold higher levels of capital under RBC 2.

A TRUSTED FINANCIAL CENTRE

PREVENTING MONEY LAUNDERING AND TERRORISM FINANCING

Singapore is committed to the global effort to combat transnational crime. Singapore is a member of the Financial Action Task Force (FATF) and a founding member of the Asia-Pacific Group on Money Laundering.

In April 2015, MAS issued a revised set of Notices and Guidelines to financial institutions on anti-money laundering and countering the financing of terrorism (AML/CFT). These enhancements reflect MAS’ prevailing supervisory expectations and are benchmarked to global best practices and standards.



In June 2015, the MAS Act was amended to enhance the effectiveness of Singapore’s AML/CFT regime, particularly in relation to international cooperation. The amendments are aligned with the standards set by FATF and the Core Principles for Effective Banking Supervision issued by the Basel Committee on Banking Supervision.

In October 2015, MAS issued the “Guidance on AML/CFT Controls in Trade Finance and Correspondent Banking” to help financial institutions improve their risk management practices in these areas.

MAS has dedicated significant resources towards AML/CFT supervision and enforcement. In 2015, MAS conducted 54 AML/CFT inspections covering banks, insurance companies, money-changers, remittance agents, capital markets services licensees, licensed trust companies, stored value facility holders and non-bank credit card issuers. MAS also engaged external auditors to conduct AML/CFT inspections on 100 money-changers and remittance agents.

From these inspections, we found that AML/CFT controls were generally in place for most financial institutions. There was also greater industry awareness of money laundering, terrorism financing and proliferation financing risks in trade finance and correspondent banking, and controls in these areas had been enhanced. Financial institutions had also incorporated “high tax risk” indicators in their customer due diligence policies, procedures and controls.

However, there were several areas for improvement. MAS has asked financial institutions to continue to strengthen their transaction monitoring systems to ensure that they are able to detect unusual and suspicious trends, patterns and activities over time. These systems should also be enhanced to monitor activities in multiple accounts belonging to the same beneficial owner. Where there is suspicion of

money laundering or terrorism financing, suspicious transaction reports should be filed promptly.

In addition, a few financial institutions did not conduct customer due diligence measures commensurate with the risks presented by higher risk businesses or customers. Some financial institutions, particularly money-changers and remittance agents, were required to strengthen their customer due diligence processes, including the documentation of the due diligence done. MAS had required the relevant financial institutions to promptly address all deficiencies noted and take steps to strengthen their controls and risk management framework.

MAS takes a serious view of breaches of AML/CFT regulations and failure by financial institutions to institute a robust AML/CFT control framework. Sanctions are imposed on financial institutions for regulatory contraventions and deficiencies in AML/CFT measures. These include formal warnings, reprimands, restrictions on operations, financial penalties and revocation of licences. In 2015, MAS issued 19 warnings and reprimands to financial institutions. MAS also imposed financial penalties on 16 financial institutions with amounts up to S$800,000.

CLOSURE OF BSI BANK LIMITED In June 2016, MAS withdrew its approval for BSI Bank to operate as a merchant bank in Singapore due to serious breaches of AML requirements, extensive control failures, ineffective senior management oversight, and acts of gross misconduct by certain bank staff. The last time MAS shut down a merchant bank was in 1984, 32 years ago. In addition, MAS imposed a financial penalty of S$13.3 million for 41 breaches of AML regulations. MAS also referred six members of the bank’s senior management and staff to the Public Prosecutor to evaluate if there were

MAS engaged external auditors to conduct AML/ CFT inspections on

100 money-changers and remittance agents

In 2015, MAS issued 19 warnings and reprimands to financial institutions. MAS also imposed financial penalties on 16 financial institutions with amounts up to

S$800,000 .



criminal offences committed by these individuals. In taking these actions, MAS reminded financial institutions to take their AML responsibilities seriously, and that MAS is resolved to ensure that Singapore remains a clean and trusted financial centre.

ENHANCING EXCHANGE OF TAX INFORMATION FRAMEWORK

Singapore continued its efforts to promote international tax transparency to combat cross-border tax offences. The first transmission of information under the Foreign Account Tax Compliance Act Model 1 Intergovernmental Agreement between Singapore and the US took place in September 2015.

In January 2016, Singapore ratified the Convention on Mutual Administrative Assistance in Tax Matters. The multilateral agreement expands Singapore’s network of partners for exchange of information on request to over 100.

Singapore also endorsed the new global standard of Automatic Exchange of Information (AEOI)

and committed to implementing AEOI by 2018. Legislative amendments will be made by the end of 2016. Singapore will explore entering into bilateral AEOI arrangements with appropriate partners, subject to:

• Partners having a robust framework of law to maintain the confidentiality of information exchanged and confine its use for tax purposes;

• AEOI being implemented among all key financial centres to create a level playing field; and

• Reciprocity in terms of the scope of information exchanged between jurisdictions.

A DYNAMIC AND PURPOSEFUL FINANCIAL CENTRE

FINANCIAL SECTOR GROWTH REMAINS RESILIENT

The Singapore financial sector remained resilient in 2015, growing 5.3% compared to GDP growth of 2% for the overall economy.

DEDICATED DEPARTMENTS TO COMBAT MONEY LAUNDERING AND STRENGTHEN ENFORCEMENT

On 13 June 2016, MAS announced that it would set up dedicated departments to combat money laundering and strengthen enforcement. The Anti-Money Laundering Department will streamline the existing responsibilities for regulatory policies relating to money laundering and other illicit financing risks. A dedicated supervisory team will also be set up to monitor these risks and carry out onsite supervision of how financial institutions manage these risks. These functions used to be carried out by different departments in MAS; the new structures will enhance supervisory focus. The Enforcement department will continue to jointly investigate capital markets misconduct offences with the Commercial Affairs Department. It will also be responsible for enforcement actions arising from regulatory breaches of MAS’ banking, insurance and capital markets regulations. The changes will take effect on 1 August 2016.

BOX1

In June 2016, MAS withdrew its approval for BSI Bank Limited to operate as a merchant bank in Singapore. The last time MAS shut down a merchant bank was in 1984, 32 years ago.

The Singapore financial sector remained resilient in 2015, growing

5.3%



Some key highlights include:

BankingTotal assets in the banking sector held steady at S$2.3 trillion, while trade financing declined on the back of a slowdown in the Chinese economy and a moderation in trade flows.

Asset ManagementSingapore’s asset management industry posed 9% growth in 2015, with assets under management reaching S$2.6 trillion. Approximately 80% of these assets were sourced from investors outside of Singapore, while two-thirds were invested into the Asia Pacific, reflecting Singapore’s role as a regional investment gateway.

InsuranceDespite the challenging market conditions posed by excess capacity and low investment returns, total non-life gross written premiums grew by 10.4% y-o-y in 2015 to reach S$13.4 billion. This was driven by good growth in the offshore business, which grew by 13.8% and raised the share of offshore non-life insurance to 68% in 2015.

STRENGTHENING CAPITAL MARKETS AND INCREASING PRODUCT DIVERSITY

Capital Markets In 2015, SGD outstanding debt volumes remained resilient with a growth rate of 8.5% while non-SGD outstanding debt volumes saw a modest fall of 2.4%. The bond market continued to grow in diversity. DBS issued the first covered bond in Singapore in USD, while UOB became the first bank in Asia to issue a EUR covered bond in March 2016. UOB was also the first global issuer to publish its Harmonised Transparency Template under the Global Covered Bond Label Initiative5.

Real Estate Investment Trust MarketIn July 2015, MAS refined its proposals to strengthen Singapore’s real estate investment trust (REIT) market, in response to industry feedback. The enhancements aim to accord REIT unitholders better protection and greater accountability, while providing REIT Managers increased operational flexibility. The enhancements will be phased in to facilitate smooth implementation by the industry. As of December 2015, there were a total of 39 REITs and property trusts listed on SGX, with a market capitalisation of more than S$65 billion.

Foreign Exchange, Commodities and Derivatives Singapore continued to grow as a trading hub for FX, commodities and derivatives.

Average daily OTC turnover of FX reached US$401 billion in October 20156. This was a 5% increase from US$381 billion in April 2015, led by growth in FX and cross currency swaps. In response to greater demands for risk management and market transparency, total volume of listed FX, commodity and equity derivatives in Singapore increased by 53% y-o-y to reach 180 million contracts in 2015.

Total non-life gross written premium grew by 10.4% y-o-y in 2015 to reach

S$13.4 billion,driven by good growth in the offshore business

Average daily over-the-counter turnover of foreign exchange reached

US$401 billionin October 2015

5 The Covered Bond Label is a market benchmark enhancing transparency of covered bonds by establishing core standards for covered bonds (https://coveredbondlabel.com/).

6 Singapore Foreign Exchange Market Committee Survey on over-the-counter market activity.

Singapore’s asset management industry grew 9% in 2015, with assets under management reaching

S$2.6 trillion



• Growth in listed FX derivatives was driven by the Indian Rupee (INR) futures contract, which grew six times in 2015 to over four million contracts being traded.

• In commodity derivatives, the volume of cleared iron ore derivatives doubled to six million contracts, while the volume of benchmark rubber futures traded grew 34% to 650,000 contracts over the year. SGX launched Liquefied Natural Gas (LNG) derivatives in January 2016 to facilitate risk management of physical LNG trading.

In November 2015, ICE Futures Singapore and ICE Clear Singapore commenced operations, broadening the suite of listed derivatives products in Singapore and strengthening Singapore’s value proposition as a risk management hub.

Bond Trading PlatformMAS recognised SGX Bond Trading Pte Ltd (SGX-BT) as a Recognised Market Operator in November 2015. The electronic bond trading platform facilitates price discovery and trade matching for dealers and clients. SGX-BT aims to improve liquidity in the trading of Asian bonds by aggregating liquidity providers on its platform.

ENHANCING THE RMB ECOSYSTEM

At the occasions of the 12th Joint Council for Bilateral Cooperation in October 2015 and President Xi Jinping’s visit to Singapore in November 2015, MAS announced key RMB initiatives to further strengthen RMB cooperation with China. These initiatives include:

• Extending existing cross-border RMB initiatives7 to the cities of Chongqing, Suzhou and Tianjin;

• Allowing companies in the three cities that issue RMB bonds in Singapore to fully repatriate the proceeds raised; and

• Doubling Singapore’s quota under the RMB Qualified Foreign Institutional Investor (RQFII) scheme from RMB 50 billion to RMB 100 billion.

At the same time, Singapore and China also agreed to enhance capital market cooperation, which adds a new dimension to bilateral financial cooperation. Specifically, there was agreement to institute a regular high-level dialogue between MAS and the China Securities Regulatory Commission (CSRC). MAS and CSRC also agreed to explore product collaboration to broaden capital market offerings. The first MAS-CSRC Regulatory Roundtable was held on 28 April 2016.

STRENGTHENING INFRASTRUCTURE FINANCING

While the pace of growth has moderated, population growth in ASEAN will still require about US$60 billion worth of investment into basic infrastructure each year. To meet the growing need for infrastructure financing, MAS is actively consulting the industry on the setup of an infrastructure debt takeout facility to improve institutional investors’ access to infrastructure debt investment opportunities. We will also seek to create usable infrastructure asset performance benchmarks to encourage greater investment allocation into infrastructure, and enhance project bankability through promulgating consistent project documentation (see Box 3).

HARNESSING TECHNOLOGY AND INNOVATION Financial Sector Technology and Innovation SchemeIn June 2015, MAS launched the Financial Sector Technology & Innovation (FSTI) scheme, which would commit S$225 million over five years to support the creation of a vibrant ecosystem for innovation. FSTI funds can be used for three purposes:

• Innovation centres: To attract financial institutions to set up their R&D and innovation labs in Singapore

• Institution-level projects: To catalyse the development by financial institutions of innovative solutions that have the potential to promote growth, efficiency, or competitiveness

7 The existing cross-border RMB initiatives include allowing: (i) banks in Singapore to lend RMB to corporates in Suzhou, Tianjin and Chongqing; (ii) corporates in Suzhou, Tianjin and Chongqing to issue RMB bonds in Singapore and to repatriate the proceeds onshore; (iii) equity investment funds in Suzhou, Tianjin and Chongqing to make direct investment in Singapore and the ASEAN region; and (iv) individuals in Suzhou, Tianjin and Chongqing to conduct RMB remittances to settle current account transactions and direct

investment in corporates in Singapore.


• Industry-wide projects: To support the building of industry-wide technology infrastructure that is required for the delivery of new, integrated services

Several financial institutions have already set up their innovation centres or labs in Singapore, some under the FSTI, including DBS, OCBC, UOB, Allianz, Aviva, Citibank, Credit Suisse, Metlife, and UBS.

Development of the FinTech Ecosystem MAS commissioned a study to identify the conditions needed to support a thriving FinTech

ecosystem in Singapore, and to develop strategic projects to accelerate technology adoption and performance in established players within the financial sector.

The study found that Singapore has the resources and capabilities to become a Smart Financial Centre, based on benchmarking interviews with the industry and secondary research.

To strengthen Singapore’s proposition as a hub for the development, deployment and export of FinTech solutions, MAS will focus on opportunities in know-your-customer solutions, greater use of Application Programming Interface (API) gateways in financial systems, and establishing innovation laboratories with industry partners and other government agencies. New incentive schemes will be made available to encourage more experimentation such as proof-of-concept projects and to recognise innovative solutions to industry challenges. As the FinTech ecosystem in Singapore grows and attracts venture capital, there will be more funding options available for start-ups.

MAS intends to make Singapore the destination of choice for innovative FinTech companies by easing


FORMATION OF THE FINTECH & INNOVATION GROUP

On 1 August 2015, MAS formed the FinTech & Innovation Group (FTIG). FTIG is responsible for regulatory policies and development strategies to facilitate the use of technology and innovation to better manage risks, enhance efficiency, and strengthen competitiveness in the financial sector.

FTIG comprises:

BOX2

Payments and Technology Solutions Office, which formulates regulatory pol icies and develops strategies for simple, swift and secure payments and other technology solutions for financial services.

Technology Infrastructure Office, which is responsible for regulatory policies and strategies for developing safe and efficient technology enabled infrastructures for the financial sector, in areas such as cloud computing, big data, and distributed ledgers.

Technology Innovation Lab, which scans the horizon for cutting-edge technologies with potential application to the financial industry and works with the industry and relevant parties to test-bed innovative new solutions.

In June 2015, MAS launched the Financial Sector Technology & Innovation scheme, which would commit

S$225 million over five years to support the creation of a vibrant ecosystem for innovation



the process of starting an innovative financial business. These firms will need a ready pool of skilled FinTech professionals as they grow. MAS will work in conjunction with the industry and academic community to design new curricula and introduce opportunities for internships and attachments to meet this demand.

Enhancing Payments EfficiencyMAS’ vision for Singapore is for a retail payment landscape that is swift, simple, and secure – where interoperable electronic payment options are accessible to and acceptable by all in Singapore. In 2016, MAS commissioned a study to take stock of Singapore’s payments framework and landscape and create a roadmap to achieve our vision. The findings of this study will guide MAS’ payments strategy in the years to come.

MAS, together with the Ministry of Finance (MOF), is co-leading a government-wide effort to increase the adoption of electronic payments in Singapore. In 2015, MAS and MOF identified two core thrusts: streamlining payment card acceptance infrastructure at merchants through unified Points-of-Sale (POS), and enhancing access to real-time payments through the Fast and Secure Transfers (FAST) system.

A unified POS would enhance merchant efficiency by simplifying front-to-back process integration and enhance customer experience. Separately, FAST membership has grown from 14 to 19 banks since its launch in 2014, and the limit on FAST transfers has been raised from S$10,000 to S$50,000. This has allowed more people to pay for more transactions in real-time.

MAS is also working with the Association of Banks in Singapore (ABS) to develop a Centralised Addressing Scheme that will allow anyone in Singapore to pay someone else via FAST using only his or her mobile number as a proxy.

Cooperation Agreements with the Financial Conduct Authority and Australian Securities and Investments CommissionMAS signed co-operation agreements on FinTech with the Financial Conduct Authority (FCA) and the Australian Securities and Investments Commission (ASIC) on 11 May 2016 and 16 June

2016 respectively. The agreements will enable MAS and its counterparts in the UK and Australia to refer to one another innovative FinTech businesses that would like to enter each other’s market. Following the referral, the regulators will support the businesses through the initial discussion phase and provide advice on required licences, thus helping to reduce regulatory uncertainty and time to market. The agreements also set out how regulators plan to share and use information on emerging market trends on FinTech. In addition, the MAS-ASIC agreement includes a commitment by both regulators to explore joint innovation projects. Singapore FinTech FestivalMr Tharman Shanmugaratnam, Deputy Prime Minister and Chairman of MAS, launched the inaugural Singapore FinTech Festival, to be held in Singapore from 14 to 18 November 2016, at a Singapore FinTech roadshow in New York City on 12 April 2016. MAS also announced the 100 problem statements submitted by the industry for the Global FinTech Hackcelerator at a FinTech event in Singapore on 31 May 2016. The event was attended by more than 1,000 members of the FinTech community, including bank

The audience at the announcement of the industry problem statements for the Global FinTech Hackcelerator

Mr Tharman Shanmugaratnam, Deputy Prime Minister and Chairman of MAS, launches the inaugural Singapore FinTech Festival in New York City on 12 April 2016. Also in photo: Mr Ravi Menon, Managing Director of MAS, and Mr Sopnendu Mohanty, Chief FinTech Officer



and investment executives, FinTech start-ups, technology experts, and innovation practitioners.

DEVELOPING GLOBALLY COMPETITIVE TALENT

MAS has embarked on several initiatives to develop a strong pool of future-ready talent under the SkillsFuture framework for the financial sector.

First, to build a pipeline of job-ready graduates, we are strengthening the linkages with tertiary institutions to enhance the relevance of curriculum and create greater internship opportunities. We will be piloting an Earn and Learn Programme in the area of retail banking to provide polytechnic graduates an opportunity to learn the ropes within key retail banks and at the same time gain recognised qualifications.

Second, we have also put in place initiatives to deepen skills and increase the versatility of our financial sector workforce. To build a deeply skilled workforce, we have launched the Financial Sector Study Awards to support a wider range of specialist

skills and programmes. In February 2016, we announced the formation of the Financial Sector Tripartite Committee (FSTC), bringing together the industry associations, labour movement and government to help the financial workforce address the changing needs of the industry (see Box 4). The FSTC has also set up the Financial Industry Career Advisory Centre (FiCAC) to facilitate intra and cross-sector mobility.

Third, we continue our efforts to build a strong pipeline of Singaporean leaders in finance. In May 2015, the Asian Financial Leaders Programme was launched by the Singapore Management University (SMU) and Temasek Management Services. The Programme will equip finance professionals aspiring to take on C-suite roles in Asian financial institutions with the knowledge to navigate the diverse business, regulatory, and legal environment in the region. The National University of Singapore (NUS) had also launched its Asia Leaders in Financial Institutions programme in September 2015 to contribute towards building a strong network of future financial leaders with global perspective for Asia.



UNLOCKING LONG TERM FINANCING FOR INFRASTRUCTURE

Asia’s infrastructure needs are set to rise rapidly over the next decade, nearing US$5.3 trillion by 20258 . To keep up with this immense demand, Asia must unlock new sources of financing and diversify beyond government funding and bank lending.

Institutional investors can be deep sources of long term financing. While infrastructure assets can offer long-dated and inflation-protected returns, many investors have held back due to information asymmetry and lack of access to bankable opportunities.

To develop infrastructure as an investible asset class for institutional investors, Singapore has launched three partnerships to address the key bottlenecks:

BOX2

Consistent project documentation and proper risk allocation to improve bankabilityInvestors have shied away from infrastructure projects due to poorly-structured contracts that leave them exposed to unnecessary non-commercial risks. In partnership with the World Bank Group and the G20’s Global Infrastructure Hub, Singapore is promoting the adoption of essential contractual clauses and risk allocation matrices for projects in Asia to improve the qual i ty of project documentation and enhance bankability.

Creating infrastructure asset benchmarks To allow institutional investors to objectively evaluate infrastructure investment opportunities, MAS supported the establishment of the EDHEC Infrastructure Institute-Singapore (EDHECinfra). EDHECinfra will create usable performance benchmarks for privately held infrastructure debt and equity investments. These benchmarks aim to provide investors with enhanced data on the return and risk characteristics, as well as facilitate performance comparisons of privately held infrastructure debt and equity against other asset classes.

Developing infrastructure debt as a significant asset class for institutional investorsTo improve institutional i nves to rs ’ access to infrastructure debt in Asia, MAS is actively consulting the industry on the setup of an infrastructure debt takeout facility, which will facilitate the transfer of infrastructure debt from banks to institutional investors beyond the greenfield stage. This will also help banks to recycle capital for new greenfield investments.

BOX3

8 Source: PwC, July 2015.


FORMATION OF THE FINANCIAL SECTOR TRIPARTITE COMMITTEE

In February 2016, MAS and the National Trades Union Congress (NTUC) announced the formation of the Financial Sector Tripartite Committee (FSTC). The FSTC is co-chaired by Ms Jacqueline Loh, Deputy Managing Director, MAS, and Mr Patrick Tay, Assistant Secretary-General, NTUC.

SkillsFuture was first announced by Deputy Prime Minister Tharman Shanmugaratnam in Budget 2015, and it aims to provide Singaporeans with opportunities to develop their fullest potential throughout life, regardless of their starting points. To achieve the SkillsFuture objective, tripartism is key. The FSTC brings together the industry associations, government and labour movement, to build a financial sector workforce that is versatile and well-equipped to embrace the opportunities and changing needs of the financial industry. For a start, the FSTC aims to achieve the following:

BOX4

Enhance versatility The FSTC will collaborate with the Institute of Banking and Finance (IBF) to continually review the IBF Standards and identify new cross-functional competencies needed, such as in data analytics and risk management. Structured progression pathways will also be developed for evolving job segments including Consumer Banking, to encourage continuous learning and upskilling.

Facilitate mobility In April 2016, the FSTC set up a financial sector-specific one-stop career advisory facility known as the Financial Industry Career Advisory Centre (FiCAC). Supported by various agencies, including MAS, IBF and Workforce Development Agency, FiCAC will provide guidance to professionals who are keen to join the financial industry, as well as those looking to move to new jobs within the industry.

Build resilience In March 2016, the FSTC p a r t n e re d N T U C e 2 i (Employment & Employability Institute) to pilot a change management programme that will help the financial sector workforce embrace new mindsets towards skills upgrading. This will strengthen workers’ motivations to reskill, upskill and acquire new skills, thereby helping to build a more resilient workforce that can adapt quickly as the job roles and technology in the financial services sector evolve.

Top row (L-R): Ong Puay See (IBF), Julia Ng (WDA), Sylvia Choo (NTUC), Ong-Ang Ai-Boon (ABS), Leong Sing Chiong (MAS), Vicky Wong (e2i), Carolyn Neo (MAS)Bottom row (L-R): Max Lim (NTUC), Michael Zink (Citi), Wee Ee Cheong (ABS, UOB), Jacqueline Loh (MAS), Patrick Tay (NTUC), Piyush Gupta (DBS), Lim Cheng Teck (SCB), Nora Kang (NTUC)Absent with apologies: Samuel Tsien (OCBC)



SERVING THE PUBLIC,ENGAGINGSTAKEHOLDERS


SERVING THE PUBLIC,ENGAGING STAKEHOLDERS

SERVING THE PUBLIC

MANAGING DOLLARS AND CENTS

As at 31 March 2016, the total currency in circulation was S$39.3 billion (see Chart 5). This was an increase of 6.4% from a year ago, with S$56.9 billion worth of notes and coins issued to banks and S$54.5 billion returned for the financial year.

MAS continued with the “good-as-new” S$2 notes initiative for the fourth year. With this

initiative, the quantity of brand new S$2 notes issued for the 2016 Lunar New Year fell further by another 6.2 million pieces (7.4%) from last year.

In June 2016, MAS issued the Splendour of Native Orchids Series coin set as a finale to the popular Native Orchids of Singapore coin series issued from 2011 to 2015. The set, which has a limited mintage of 4,000, comprises 10 miniature S$1 silver proof coins, each featuring the same species of orchids from the Native Orchids of Singapore coin series in full colour.

Total Currency in Circulation (S$Billion)

2012 2013 2014 2015 2016

Notes 27.58 30.27 32.52 35.59 37.89

Coins 1.25 1.29 1.34 1.39 1.45

Total 28.83 31.56 33.86 36.98 39.34

2012 2013 2014 2015 2016

S$28.83 Billion

S$31.56 Billion

S$33.86 Billion

S$36.98 BillionS$39.34 Billion

Chart 5: Total Currency in Circulation

The Splendour of Native Orchids Series Coin Set



SG50 COMMEMORATIVE CURRENCY

To celebrate Singapore’s 50th year of independence, MAS issued a set of three commemorative coins in May 2015 followed by a set of commemorative currency notes in August 2015. The commemorative coins consisted of a S$2 cupro-nickel proof-like coin, a S$5 silver proof coin and a S$50 gold proof coin, while the commemorative notes comprised a S$50 polymer note and five S$10 polymer notes. To meet collectors’ demand, a collection of seven limited edition numismatic currency sets was also available for sale.

The coins were themed “Education, Building our Nation Together”, reflecting the fundamental role that education played in the transformation of a young nation. The S$50 note highlights Singapore’s history, transformation and future. The five S$10 notes have a common front design and different back designs, each reflecting a value or an aspiration that depicts the theme “Vibrant Nation, Endearing Home”. Both the S$50 and S$10 notes have security features that are the first of their kind in the world to be used in a currency note. MAS won the “Best New Currency Feature or Product” award for the lens-based wide security stripes on the S$50 and S$10 notes at the 2016 Excellence in Currency Technical Awards by the International Association of Currency Affairs.

BOX5

Commemorative Coins

S$50 Commemorative Note

S$10 Commemorative Notes


MONEYSENSE

MoneySENSE, the national financial education programme, equips Singaporeans with the knowledge and capabilities to make informed financial decisions. The programme reaches out to people from all walks of life through different channels and strategies.

Educating the General PublicMoneySENSE continued to engage members of the public directly through talks, seminars, workshops and community events. We also ran advertorials in the newspapers, and worked with partners to deliver content through television and radio.

The MoneySENSE-Singapore Polytechnic Institute for Financial Literacy (IFL) conducted 840 talks and workshops in 2015, educating more than 26,000 participants on topics ranging from basic money management to retirement planning. Since its launch in 2012, the IFL has conducted over 2,400 talks and workshops that have benefitted close to 76,000 people.

MoneySENSE engaged residents of Moulmein-Kallang and Whampoa at the PAssionArts Festival in July 2015, and reached out to the public at the Council for Third Age’s 50plus Expo in May 2015. Through such community events, we educated Singaporeans on issues such as prudent investing and retirement planning.

Empowering the YouthAs we continue to focus on the youth segment, we started the My Money @ Campus seminar series to reach out to tertiary students. The inaugural seminar was held at SMU on 21 October 2015 and attracted about 340 undergraduates. Mr Piyush Gupta, CEO of DBS Group Holdings Ltd, shared his personal investment journey while other industry experts and academics shared tips on how to build an affordable portfolio.

The second My Money @ Campus seminar was held at NUS on 17 March 2016. About 380 students learned the importance of planning


An IFL workshop conducted in September 2015 for staff of the Health Sciences Authority, on how to manage CPF money for retirement

MoneySENSE reached out to members of the public at the PAssionArts Festival in July 2015

My Money @ Campus seminar at SMU in October 2015. A dialogue with Mr Piyush Gupta, CEO of DBS Group Holdings Ltd (right), moderated by Assistant Professor Aurobindo Ghosh from SMU (left)

The MoneySENSE-Singapore Polytechnic Institute for Financial Literacy (IFL) conducted 840 talks and workshops in 2015, educating more than

26,000 participants


ahead and managing investment risks from Mr Michael Zink, Citi’s Head of ASEAN and Country Officer for Singapore. Given the success of My Money @ Campus seminars, we intend to hold more editions at other universities and institutes of higher learning (IHLs) in the upcoming months.


My Money @ Campus seminar at NUS in March 2016. Mr Michael Zink, Citi’s Head of ASEAN and Country Officer for Singapore, addressing the crowd

MoneySENSE also participated in several events organised by IHLs to educate their students on money management. We reached out to undergraduates at a financial literacy carnival organised by the NUS Students’ Union in March 2015, and supported the MoneySENSE-Central Provident Fund Board Financial Literacy Week organised for Ngee Ann Polytechnic students in November 2015.

MoneySENSE utilised a gamification strategy to educate the young about personal finance in a fun and interactive way:

• We worked with Nanyang Polytechnic and the National Council for Problem Gambling to organise the Singapore Games Creation Competition. More than 500 students from 50 secondary schools as well as the Institute of Technical Education created web-based games and mobile applications with important messages on spending money wisely and the dangers of gambling.

• MoneySENSE partnered with Wellington Primary School to organise the National Primary Games Creation Competition. The theme of the competition was “A Community of Savvy Savers” and key messages in the games included identifying needs and wants. More than 400 pupils from 40 primary schools took part in the competition.

The inaugural My Money @ Campus seminar was held at the Singapore Management University on 21 October 2015 and attracted about

340 undergraduates

PROMOTING FINANCIAL LITERACY THROUGH ISLAND-WIDE CAMPAIGNS

MoneySENSE conducted three large-scale educational campaigns in 2015. The goals of the campaigns were to:

• Raise awareness of two key initiatives resulting from the Financial Advisory Industry Review (FAIR) – compareFIRST and Direct Purchase Insurance (DPI)

• Encourage consumers to adopt sensible spending and borrowing habits and use unsecured credit responsibly

• Highlight the importance of regular and long term saving and investing, and educate the public on low-cost investment products

To maximise outreach, educational messages were featured on various media platforms, including newspapers, public transport, television, radio, and mobile and online platforms such as Facebook, Google and YouTube. To help the public recall as many of the messages as possible, each campaign featured a distinct theme.

BOX6

(continued on next page)



Educational message about DPI at a bus shelter

Message about compareFIRST on a taxi

PROMOTING FINANCIAL LITERACY THROUGH ISLAND-WIDE CAMPAIGNS continued

BOX6

“You Can Now Buy Direct” and “Compare First” CampaigncompareFIRST is an interactive online portal that enables consumers to compare the premiums, features and benefits of life insurance products. This helps them make more informed decisions about which life insurance policy to buy. DPI offers consumers access to a distinct class of term life and whole life insurance products sold directly by life insurers without financial advice and commissions.

The “You Can Now Buy Direct” and “Compare First” campaign ran from April 2015 to August 2015. It encouraged members of the public to visit compareFIRST before making a life insurance purchase and highlighted the key features and benefits of DPI to consumers.

The educational campaign helped register healthy interest in compareFIRST and DPI. As of 31 March 2016, more than 300,000 visitors have used compareFIRST and about 223,000 product summaries have been downloaded through the portal. In addition, more than 850 DPI policies have been sold.

“Spend Within Your Means” CampaignThe “Spend Within Your Means” campaign ran from July 2015 to October 2015 and featured baits modelled after luxury items placed on mousetraps resembling credit cards. The aim was to encourage consumers to watch their spending and use unsecured credit prudently.

The campaign tied in with regulatory changes to help consumers avoid debt problems by limiting the amount of unsecured credit they can take out.

“I Save and Invest for Our Future” CampaignThe “I Save and Invest for Our Future” campaign encouraged the public to take a life cycle approach to investing, and highlighted the benefits of saving and investing from young. The campaign, which ran from August 2015 to February 2016, also educated consumers on simple, low-cost investment products such as Singapore Savings Bonds, retail corporate bonds and exchange-traded funds.

The campaign included a television commercial showing a man going through different life stages and reaching his goals in life thanks to planning ahead from young.

Advertisements in the newspapers, encouraging consumers to use unsecured credit responsibly

Educational message on a bus showing an individual going through the different stages of life, and eventually reaping the benefits of saving and investing from young



FACILITATING RETAIL ACCESS TO SIMPLE LOW-COST INVESTMENT PRODUCTS

Singapore Savings BondsMAS launched the Singapore Savings Bonds programme in the second half of 2015. The first Savings Bond was open for public application on 1 September 2015, and issued on 1 October 2015. The public reception has been encouraging, with 32,000 individuals investing S$810 million in Savings Bonds over the first six issuances from October 2015 to March 2016. This represented a significant increase in retail investors’ participation in the Singapore Government Securities (SGS) market.

Singapore Savings Bonds are a new type of SGS that offer individual investors a safe, long-term and flexible product to meet their savings and investment needs.

• Safe: Savings Bonds are fully backed by the Singapore Government. Investors can always get their investment amount back in full with no capital losses.

• Long-term: Savings Bonds have a term of up to 10 years, and pay interest that increases over time. The longer the savings period, the higher the return.

• Flexible: Investors may choose to exit their investment in any given month, with no penalties. There is no need to commit to a specific investment period at the start.

MAS will continue with public outreach efforts to generate greater awareness of Savings Bonds.

Facilitating Bond Offerings to Retail InvestorsFollowing public consultations, MAS issued two new regulations on 19 May 2016 to facilitate retail investors’ greater access to corporate bonds through the Seasoning Framework and Exempt Bond Issuer Framework:

• Under the Seasoning Framework, wholesale bonds issued by corporates that satisfy specified eligibility criteria (such as size, listing track record and credit profile) may be re-denominated into smaller lot sizes after the bonds have been listed for six months. Eligible corporates will also be exempted from providing a prospectus for additional offers to retail investors of new bonds with the same terms as the re-denominated bonds.

• Under the Exempt Bond Issuer Framework, bonds issued by corporates that satisfy even stricter eligibility criteria can be offered directly to retail investors without a prospectus.

• Issuers using these frameworks would still be required to provide to investors a summary of the key information on the risks and features of the bonds.

These frameworks are part of MAS’ overall efforts to give retail investors better access to simple investment products that can be used to build their investment portfolio.

Improve Retail Access to Exchange Traded FundsIn April 2015, MAS made changes to its regulatory framework to allow fund managers to re-classify relatively less complex Exchange Traded Funds (ETFs) which make limited use of derivatives as Excluded Investment Products (EIP). These previously had to be classified as Specified Investment Products and sold to retail investors with enhanced regulatory safeguards, including requirements for intermediaries to first assess their investment knowledge or experience in derivatives. As at April 2016, 85% of the total assets under management of SGX-listed ETFs were classified as EIP-ETFs, which investors can purchase as easily as individual shares.

S$810 million in Savings Bonds allotted to

32,000 individuals from October 2015 to March 2016



PROTECTING CONSUMERS

FINANCIAL ADVISORY INDUSTRY REVIEW

On 11 May 2015, MAS completed the policy and legislative consultations on recommendations under the Financial Advisory Industry Review (FAIR). The objective of FAIR is to raise the standards of the financial advisory (FA) industry and improve efficiency in the distribution of life insurance and investment products in Singapore.

Key changes were made to the FAA, Insurance Act and subsidiary legislation in 2015. The following initiatives were implemented on 1 January 2016: Balanced Scorecard Remuneration Framework for Representatives and SupervisorsThis framework seeks to promote a culture of fair dealing by subjecting a significant proportion of a representative’s remuneration to non-sales key performance indicators. Under the Balanced Scorecard (BSC) framework, the representative is assessed based on whether he has understood the customer’s needs, recommended suitable products, made adequate disclosures and conducted himself professionally and ethically. There was a one year transition period from January 2015 for FA firms to familiarise themselves with the BSC requirements, before the framework was legally effected on 1 January 2016. Restrictions on Non-Financial Advisory Activities for Representatives and Standalone Financial Advisory FirmsMAS implemented legislation restricting the types of non-FA activities which representatives and standalone FA firms may conduct to maintain a high level of professionalism and competence in the FA industry. Any non-FA activities conducted by these persons should not be in conflict with their FA roles, result in a neglect of their FA duties or bring disrepute to the FA industry. Representatives are also prohibited from conducting moneylending businesses, promoting junkets for casinos, acting as real estate agents and marketing products that are not regulated under the FAA as investments.

Banning of Short-Term IncentivesMAS banned the payment and receipt of short-term incentives in the FA industry. This will better align the interests of FA firms and their representatives with those of their customers and ensure that FA firms and their representatives are not influenced by such incentives when recommending investment products to their customers. Continuing Professional DevelopmentMAS prescribed Continuing Professional Development (CPD) training requirements for FA representatives to ensure that they remain current and up-to-date in their knowledge of market and regulatory developments. FA representatives are required to fulfil a minimum of 30 CPD training hours annually, of which 12 hours are to be in Ethics, and Rules and Regulations. MAS will monitor the effectiveness of these initiatives in meeting the objectives of FAIR. ENCOURAGING PRUDENT BORROWING AND LENDING BEHAVIOUR

Implementation of Unsecured Credit Measures To encourage prudent borrowing, MAS announced in 2013 that financial institutions would be disallowed from granting further unsecured credit to a borrower if the borrower’s total interest bearing unsecured debt exceeds an industry-wide borrowing limit for three consecutive months. The borrowing limit was to be set at the borrower’s annual income, and was to take effect on 1 June 2015. To allow borrowers more time to adjust to the borrowing limit, MAS announced in April 2015 that it would be phased-in over four years. The limit was set at an initial level of 24 times a borrower’s monthly income from June 2015. This will be lowered progressively to 18 times from June 2017 and 12 times from June 2019.

To help borrowers affected by MAS’ unsecured credit measures, we worked closely with ABS, credit card issuers and Credit Counselling Singapore to develop coordinated repayment solutions for these borrowers. MAS accompanied the introduction of the new measures with an educational campaign to help borrowers understand the phasing in of the borrowing limit and repayment solutions, and to educate the public on the consequences of overspending.



Enhancement of Credit Information in the Credit BureausMAS has been working closely with the consumer credit bureaus to enhance information residing with them. With effect from April 2015, a borrower’s unsecured debt balances are broken down into interest bearing and non-interest bearing components. The enhanced information empowers borrowers and financial institutions to make more prudent borrowing and lending decisions respectively.

Resetting of Motor Vehicle Financing RestrictionsIn 2013, MAS had re-introduced motor vehicle financing restrictions as a cyclical response to the strong demand for cars and the consequent pressures on inflation. In addition, they serve as a structural measure to foster financial prudence among borrowers. As at Q1 2016, premiums on COEs have fallen significantly and inflationary pressures have receded. The contribution of private road transport (excluding petrol) to CPI-All Items inflation eased from +1.3% points in 2011-2012 to -0.5% point in Q1 2016. Outstanding motor vehicle loans have moderated alongside the fall in demand, declining by 32% from S$14.13 billion in Q1 2013 to S$9.55 billion in Q1 2016. In view of these developments, MAS reset the financing restrictions in May 2016 by raising the maximum loan-to-value limit and tenure to 70% and seven years respectively. The recalibrated rules will continue to limit excessive borrowing and support the move towards a car-lite society over the long term.

ENHANCING PROSPECTUS DISCLOSURE RULES FOR SECURITIES OFFERS

Improving the Readability of ProspectusesOn 7 July 2015, MAS published a set of guidelines on good drafting practices for prospectuses. The guidelines encourage and provide guidance to issuers and their professional advisers on the use of plain English and the presentation of information in prospectuses in a clear, concise and logical manner. The guidelines apply to all prospectuses and profile statements lodged with MAS from 1 February 2016. Issuers and their advisers are also encouraged to follow the guidelines’ principles for other types of offer disclosure documents.

PARTNERING ACADEMIA

Every year, MAS hosts distinguished academics and former senior policymakers under its Eminent Visitor Programme and through other platforms. As part of their engagement, these visitors meet with MAS’ senior management, deliver lectures, and conduct in-house seminars and discussion sessions with MAS staff.

In FY 2015/16, MAS welcomed Professor Paul Romer (New York University) and Dr Claudio Borio (Bank for International Settlements). In their lectures, both visitors challenged the conventional frameworks used in macroeconomic analysis. Professor Romer argued that academic researchers have increasingly invoked mathematical concepts with no observable analogues in the real world, and that such “mathiness” was impeding the progress of macroeconomics as a science. Dr Borio’s lecture explored how prevailing macroeconomic frameworks needed to be adjusted to account for the interactions between financial and business cycles. Professor Romer’s lecture was moderated by Professor Lawrence Christiano (Northwestern University), who also served as MAS Term Professor in Economics and Finance in FY 2015/16 (see Box 7).

MAS, together with the NUS Business School and the University of Chicago’s Booth School of Business, also invited Professors Barry Eichengreen (University of California at Berkeley) and Hélène Rey (London Business School) to participate in the 2015 Asian Monetary Policy Forum (see Box 8). Professor Eichengreen is the George C. Pardee and Helen N. Pardee Professor of Economics and Political Science, and an eminent authority on economic history and international economics. Professor Rey is

Prof Paul Romer (right) delivers his lecture, moderated by Prof Lawrence Christiano (left)



well-known for her work on financial imbalances and the international monetary system.

Following past practice, MAS invited the Eminent Visitors, Term Professors, and other academics to contribute articles to its Macroeconomic Review. In 2015, Dr Donald Kohn (Brookings Institution), former Vice-Chair of the Board of Governors of the US Federal Reserve System,

wrote about the nexus between monetary and macroprudential policies. Professor Ichiro Sugimoto (Soka University of Japan) presented newly constructed estimates of Singapore’s GDP and its components for the period 1900–60 in a Special Feature for the Review, and analysed the broad trends in the colonial economic data. Professor Anthony Tay (SMU) also contributed an article on density forecasting in macroeconomics.

MAS TERM PROFESSORSHIP IN ECONOMICS AND FINANCE AT THE NATIONAL UNIVERSITY OF SINGAPORE

Since 2009, MAS has sponsored a Term Professorship in Economics and Finance at NUS. The professorship programme, which was extended for another five years in 2014, appoints top scholars from prestigious universities to teach and conduct research at NUS. It aims to strengthen Singapore’s financial and economic research infrastructure and contribute to a vibrant research community and culture at local universities. Term Professors also meet with MAS’ senior management and conduct discussions with MAS staff. In 2015, Professors Andrew Rose (Haas School of Business, University of California at Berkeley) and Lawrence Christiano (Northwestern University) were appointed Term Professors.

Professor Rose is the Bernard T. Rocca, Jr. Chair in International Business & Trade at Berkeley, and is a world-renowned researcher on open economy macroeconomics. During his appointment, he met with faculty members and taught students through seminars and workshops at NUS. He also engaged senior management at MAS on recent developments in international macroeconomics and finance. In addition, he delivered a public lecture titled “Domestic Bond Markets and Inflation”, which focused on his latest findings on the relationship between inflation and domestic bond markets. Professor Rose also participated in the activities of the Annual Conference of the Asian Bureau of Finance and Economics Research (ABFER), as well as the Asian Monetary Policy Forum (AMPF), which were held in May 2015.

Professor Christiano is the Alfred W. Chase Chair in Business Institutions and Professor of Economics at Northwestern University, and is highly regarded for his ground-breaking work on economic modelling and policy analysis. During his tenure as MAS Term Professor, he interacted with faculty and students at NUS and also delivered a public lecture titled “The Great Recession: Earthquake for Macroeconomics”. The lecture shed light on how the field of macroeconomics has been profoundly affected by the Global Financial Crisis.

BOX7

Prof Andrew Rose (left) interacts with Prof Deng Yongheng (right) from NUS during his public lecture at NUS


VALUED PARTNERON THE INTERNATIONALFRONT


VALUED PARTNERON THE INTERNATIONAL FRONT

INTERNATIONAL FINANCE

INTERNATIONAL FINANCIAL REGULATORY REFORMS

MAS continues to contribute to international work on regulatory reforms as an active member of various committees and standard setting bodies.

Financial Reforms and Implementation MonitoringMAS has chaired the FSB’s Standing Committee on Standards Implementation (SCSI) since 2013. In 2015, the key initiatives for SCSI are as follows:

• Developed the implementation monitoring ‘dashboard’ for the first annual report to the G20 on the implementation and effects of financial regulatory reforms;

• Launched the thematic peer review on the implementation of the FSB policy framework for shadow banking entities other than money market funds; and

• Completed reviews on supervisory frameworks and approaches for G-SIBs, OTC derivatives trade reporting, and resolution regimes.

BankingMAS contributes to the work of the Basel Committee on Banking Supervision (BCBS) through the following:

• Task Force on the Standardised Approach for Credit Risk – MAS has co-chaired this task force since 2015. The task force reviews the standardised approach for credit risk for internationally-active banks that are not using the advanced approaches to ensure that credit risk is appropriately captured in the capital framework;

• Working Group on Supervisory Colleges – MAS co-chairs this working group, which seeks to strengthen the co-operation of home and host regulators in the supervision of internationally active banks;

• Coherence and Calibration Task Force – This task force assesses the coherence of banking sector regulatory reforms and helps inform the BCBS’ measures to address excessive variability in risk-weighted assets, as well as the design and calibration of the leverage ratio; and

• Task Force for Interest Rate Risk in the Banking Book – The task force developed and published the finalised capital framework and enhanced supervisory guidance for interest rate risk in the banking book in April 2016.

• Task Force on Sovereign Exposures – MAS also participates in the review of the regulatory treatment of sovereign risk, which seeks to address the risks posed by sovereign exposures and is being conducted in a careful, holistic and gradual manner.

InsuranceMAS is actively involved in key committees and working groups of the International Association of Insurance Supervisors, including the working group tasked with developing the global Insurance Capital Standards, as well as the FSB’s Insurance Cross-Border Crisis Management Group.

SecuritiesAt the IOSCO, MAS participates in the standards-setting work of various Policy Committees, Task Forces and Working Groups. In 2015, we also joined the Policy Committee on Enforcement and the Exchange of Information, and the newly formed Task Force on Market Conduct.



Financial Market InfrastructuresMAS actively participates in the CPMI and is involved in working groups such as the Working Group on Retail Payments and Working Group on Digital Innovations. As a member of the CPMI-IOSCO Steering Committee, MAS also participates in the various CPMI-IOSCO initiatives, including:

• Co-chairing of the Working Group on Cyber Resilience, which published a set of cyber resilience guidelines for FMIs for public consultation in November 2015

• Implementation Monitoring Standing Group, which assesses the timely, complete and consistent implementation of the CPMI-IOSCO Principles for FMIs

• Policy Standing Group, which develops policies relating to FMIs

MAS also takes part in the joint Study Group on Central Clearing Interdependencies (comprising members from BCBS, CPMI, FSB and IOSCO), to identify and analyse interdependencies between CCPs and financial institutions. The Study Group aims to support other international streams of work to enhance resilience, recovery and resolvability of CCPs.

INTERNATIONAL COOPERATION MAS participated in the peer review among 28 jurisdictions with authorities that are members of the FSB, CPMI and/or IOSCO. The peer review assessment in 2015 covered authorities’ implementation of five responsibilities for authorities set out in the CPMI-IOSCO PFMI, across all FMI types. MAS was assessed to have observed all responsibilities across all FMI types. MAS also participated in the BCBS’ Regulatory Consistency Assessment Programme as an assessor for Mexico and South Korea’s implementation of the Basel liquidity coverage ratio. PROMOTING GLOBAL GROWTH AND STABILITY

At the invitation of the G20 Chairs, Singapore

has continued to participate in the G20 Finance Ministers and Central Bank Governors meetings where we contributed to discussions on the global economy, financial regulation and stability. MAS is also an active member of the G20 Green Finance Study Group and G20 International Financial Architecture Working Group.

REGIONAL FORUMS

ASEAN FINANCIAL INTEGRATION

MAS actively supports financial integration within ASEAN.

ASEAN Senior Level CommitteeUnder MAS and the Bank of Thailand’s co-chairmanship of the ASEAN Senior Level Committee, ASEAN central banks and monetary authorities developed Strategic Action Plans for ASEAN financial integration from 2016 to 2025. These covered banking integration, financial services liberalisation, capital account liberalisation, capital market development, financial inclusion, payment and settlement systems, and capacity building.

ASEAN Working Committee on Capital Markets DevelopmentMAS chaired the ASEAN Working Committee on Capital Market Development, which seeks to promote the development of regional bond markets. This is complemented by the work of the ASEAN Capital Markets Forum, where MAS works closely with fellow securities regulators and the private sector to promote the strengthening and greater integration of regional capital markets.

ASEAN+3

The ASEAN+3 Macroeconomic Research Office (AMRO) held its official opening ceremony in the MAS Building on 19 February 2016.

AMRO is the independent macroeconomic surveillance unit of the Chiang Mai Initiative Multilateralisation (CMIM) Agreement, which is a US$240 billion currency swap arrangement among the Finance Ministries and Central Banks of the


ASEAN+3 Member States to provide financial support in times of liquidity need. AMRO provides economic and financial surveillance and analysis of the region to support effective decision-making for the CMIM.

EXECUTIVES’ MEETING OF EAST ASIA-PACIFIC CENTRAL BANKS MAS hosted the 20th Executives’ Meeting of East Asia-Pacific Central Banks (EMEAP) Governors’ and 4th EMEAP Governors-Heads of Supervisory Authorities meeting in Singapore from 29 to 30 May 2015. From 2014 to 2016, MAS was co-vice chair of the Working Group on Financial Markets, and spearheaded work on issues related to recovery and cross-border resolution of financial institutions for the Working Group on Banking Supervision.

TECHNICAL COOPERATION

REGIONAL AND BILATERAL TRAINING

MAS contributes to the capacity building of regional central banks and regulatory authorities through structured training and technical cooperation programmes.

In July 2015, the Central Bank of Myanmar (CBM) and MAS entered into an MOU that includes technical cooperation and training. MAS hosted CBM Governor U Kyaw Kyaw Maung to a study visit in August 2015. In February 2016, MAS conducted a three-day workshop on interbank markets and banking supervision for over 30 CBM participants in Yangon.

MAS was invited to share its enterprise risk management practices at Bank Indonesia’s Annual Risk Management Conference in Bali in September 2015 and with the Autoriti Monetari Brunei Darussalam in Brunei in January 2016.

In 2015, over 100 participants from 29 countries attended the 21st and 22nd MAS Banking Supervisors’ Training Programme, the 6th MAS Information Technology Supervision Workshop and the 9th MAS-Toronto Centre Regional Leadership Programme for Securities Regulators. Close to 100 participants from countries such as Brunei, China, Korea, Myanmar and Vietnam took part in MAS’ in-country training programmes and study visits.

In other technical cooperation programmes, MAS collaborated with partners such as the Lee Kuan Yew School of Public Policy, Civil Service College and South East Asian Central Banks (SEACEN) Research and Training Centre. For instance, in April 2015, MAS hosted the 10th SEACEN-BOJ Payments and Settlements System Course in Singapore. MAS also contributed resource speakers to various programmes organised by the SEACEN Centre, IMF-Singapore Regional Training Institute and Financial Stability Institute.

IMF-SINGAPORE REGIONAL TRAINING INSTITUTE MAS contributes to the funding of the International Monetary Fund-Singapore Regional Training Institute (IMF-STI), which is the IMF’s training centre in the Asia-Pacific region. The STI furthers the work of the Singapore Cooperation Programme, which coordinates the resources available in Singapore for technical cooperation with other countries. The Institute contributes to regional growth and stability by providing high-quality training on macroeconomic and financial management, and related legal and statistical issues to government officials from the region. In 2015, the STI provided training to more than 800 officials. Over the 18 years since it was established, the Institute has provided training to more than 10,000 officials from over 40 countries.


Regional participants and trainers at the 6th MAS Information Technology Supervision Workshop, 16-20 November 2015, Singapore

AMRO Official Opening Ceremony


MAS HOSTS THREE HIGH-LEVEL CONFERENCES

MAS hosted three high-level events in May 2015, which were attended by distinguished academics, central bank governors and heads of supervisory authorities from the Asia-Pacific region. The forums discussed financial and regulatory issues critical to Asia, economic and monetary issues faced in the region, and provided a platform to facilitate research collaboration.

2015 Symposium on Asian Banking and Finance This symposium, co-hosted by the Federal Reserve Bank of San Francisco and MAS for the first time, brought together notable academics and Asia-Pacific CEOs of major financial institutions. Held on 28 May 2015, the discussions covered three main themes:

• Looking back at the global financial crisis and assessing measures taken to strengthen the financial sector

• Examining emerging financial system risks and policy responses in the current macro-financial environment

• Looking ahead to analyse long-term developments which will shape the opportunities and risks in Asian finance, and how supervisors and central banks should respond

Asian Monetary Policy ForumThe Asian Monetary Policy Forum (AMPF)convened for a second year in Singapore on 29 May 2015, in conjunction with the Annual Conference of ABFER. It was co-organised by the NUS Business School, the University of Chicago’s Booth School of Business and MAS.

The conference line-up included prominent speakers such as Mr Tharman Shanmugaratnam, Deputy Prime Minister and Chairman of MAS, Professor Carmen Reinhart (Harvard Kennedy School of Government), Professor Barry

Eichengreen (University of California at Berkeley) and Dr Jacob Frenkel (Chairman of JP Morgan Chase International). Professor Eichengreen presented the commissioned paper on “Financial Development in Asia: The Role of Policy and Institutions, with Special Reference to China”. The forum also included a panel discussion on the latest economic developments and policy issues confronting Asia, chaired by Mr Ravi Menon, MAS’ Managing Director.

20th Executives’ Meeting of East Asia-Pacific Central Banks Governors’ MeetingMAS hosted the 20th EMEAP Governors’ Meetingon 30 May 2015. Governors from the 11 EMEAP member central banks and monetary authorities exchanged views on the global economy, and growth prospects for the EMEAP region. They also discussed updates from the Monetary and Financial Stability Committee on its surveillance outcomes and research activities, and progress made on EMEAP projects in banking supervision, financial markets, payment and settlement systems, and information technology. MAS prepared several research pieces for the Meeting,

including a special paper on “Medium-Term Growth in EMEAP Economies and Some Implications for Monetary Policy” (MAS Staff Paper No. 53).

BOX8


Prof Barry Eichengreen delivers his lecture at the Asian Monetary Policy Forum

20th EMEAP Governors’ Meeting and 4th Informal Meeting of EMEAP Governors and Heads of Supervisory Authorities


ASEAN FINANCIAL REGULATORS’ EXECUTIVE PROGRAMME

The inaugural ASEAN Financial Regulators’ Executive Programme was held from 24 to 27 January 2016.

Jointly organised by MAS and the Lee Kuan Yew School of Public Policy, with funding from the Temasek Foundation, the three-and-a-half-day executive programme brought together senior officials of the central banking and financial regulatory authorities from the ASEAN countries, to discuss and provide insights to governance and leadership challenges in financial regulation.

It was attended by 23 high level officials from 10 ASEAN countries, and featured a list of distinguished speakers including:

• Lord Adair Turner, former Chair of the UK Financial Services Authority;• Andrew Sheng, Distinguished Fellow at Asia Global Institute, University of Hong Kong and

Chief Adviser to the China Banking Regulatory Commission;• Teo Swee Lian, former Deputy Managing Director of MAS; and• Anoop Singh, former director of the IMF’s Asia-Pacific Department.

The next run of the programme will take place in 2017.

BOX9

Faculty and participants at the inaugural ASEAN Financial Regulators’ Executive Programme



Faculty and participants at the inaugural ASEAN Financial Regulators’ Executive Programme



ONE MAS:INTEGRATEDANDCOHESIVE


ONE MAS:INTEGRATED AND COHESIVE

THE MAS GALLERY

The MAS Gallery was officially launched by Mr Tharman Shanmugaratnam, Deputy Prime Minister and Chairman of MAS on 16 February 2016. The opening of the Gallery this year takes on added significance as MAS celebrates its 45th anniversary. The 480-sqm Gallery was conceived to help visitors better understand MAS’ mission, values and functions. It comprises two sections – Insights@MAS and Reflections@MAS.

Insights@MAS offers visitors an overview of MAS’ functions. Through interactive games, videos, and stylised displays, visitors will learn how MAS conducts monetary policy to manage inflation, manages the official foreign reserves, issues currency notes and coins, regulates and supervises the financial sector, and promotes Singapore as a sound and progressive financial centre. Insights@MAS also highlights MAS’ efforts in raising financial literacy among Singaporeans, and offers a glimpse into how technology and innovation might transform future financial services and everyday life.

BOX10

(L-R): Mr Lee Ek Tieng (past MD, November 1989 - December 1997), Mr Michael Wong Pakshong (past MD, December 1970 - February 1981), Mr Tharman Shanmugaratnam (Deputy Prime Minister and Chairman of MAS), Mr Goh Chok Tong (past Chairman, August 2004 - May 2011), Mr J.Y. Pillay (past MD, April 1985 - October 1989), Mr Ravi Menon (MD of MAS), at the MAS Gallery launch

CELEBRATING 45 YEARS

MAS celebrated our 45th anniversary this year with the opening of the MAS Gallery in February 2016 (see Box 10). The Gallery is open to the public and showcases MAS’ role in maintaining price stability and developing a trusted, safe and progressive financial centre. The 45th anniversary theme will be featured in key MAS events such as our Annual Dinner and National Day celebrations. We also took the occasion to pay tribute to veteran MAS staff such as Zainal Abidin B Abni and Sapuan B Basari for their invaluable service over the years (see Box 11).




THE MAS GALLERY continued

Reflections@MAS highlights MAS’ mission and values, its leaders and people through a compilation of videos and photographs.

Admission to the MAS Gallery is free and self-guided. The Gallery is open on weekdays from 9.30am to 5.30pm, and on Saturdays from 9.30am to 1.30pm (only for group visits). For more information on the MAS Gallery, please visit: www.mas.gov.sg/insights.

BOX10

Tour of the MAS Gallery


45 YEARS IN MAS: AN INTERVIEW WITH SAPUAN AND ZAINAL

At 16, he was looking for work to support his parents, when his uncle informed him of a job opening as a messenger at the soon-to-be-formed Monetary Authority of Singapore (MAS) and encouraged him to apply. Sapuan B Basari did just that, as did Zainal Abidin B Abni, who was also 16 years old.

Little did they realise that they would embark on careers that would eventually span 45 years in MAS.

After passing their interviews at the Board of Commissioners of Currency Singapore Building at Empress Place, where MAS’ administration office was originally located, they immediately started work the next day as messengers, joining the first batch of staff to serve in MAS in 1971, when it was first formed. Sapuan was posted to the Economic Intelligence Department, and Zainal to the Investment and Exchange Control Department (IEC), formerly the Department of Overseas Investments in the Ministry of

Finance. Both departments were located at Fullerton Building then.

They rose through the ranks in MAS and have been tasked with increased responsibilities over the years. Sapuan is now an administrative officer with the Specialist Risk Department, while Zainal is a finance executive with the Finance Department.

In Sapuan’s current role, he takes charge of preparing and submitting his department’s annual budget proposal, monitoring the usage of funds and processing the department’s payments. He also manages the office operations and logistical requirements. Prior to this appointment, he was a research officer in the then Supervisory Policy Department, where he undertook research and daily monitoring of the developments in foreign jurisdictions. Beyond his official duties, Sapuan is also Chairperson of the MAS Staff Branch – a union under the Amalgamated Union of Public Employees. His committee

BOX11

Zainal Abidin B Abni (left) and Sapuan B Basari (right)




45 YEARS IN MAS: AN INTERVIEW WITH SAPUAN AND ZAINAL continued

BOX11 of nine looks after the welfare of more

than 200 members, and they hold regular meetings to discuss plans on expanding its membership base and maintaining good union-management rapport. As for Zainal, he takes charge of accounts processing in his current role. He is also responsible for monitoring receipt of income and payment of expenses. Aside from his official duties, Zainal was also the Sports secretary of the MAS Recreation Club where he organised fun sporting activities for MAS staff.

The two men, who will turn 62 this year, recalled the days when they used to make deliveries on foot to the various departments in MAS that were located in City Hall, Empress Place, OUE Building and Colombo Court. Sapuan said: “We were young and fit, so we could deliver letters from City Hall up to Shenton Way.”

They also had to contend with travelling to distant locations to deliver mail, added Zainal. He used to deliver the daily financial report and the Financial Times to the late Dr Goh Keng Swee, who was then stationed at the Ministry of Defence, near the Botanic Gardens.

It was in 1972 that Sapuan saw an opening for a clerk in another department and applied for the post. Meanwhile, Zainal followed suit in 1973 by applying for a clerical position in IEC, which later became the International Department when exchange control was

abolished. It is now called the Finance Department.

“In those days, from ‘71 to the ‘80s, we were like a family. Because most of us who came in were really young, we clicked really well. We were even invited to many birthday parties back then.”

Over the years, the two have also become close friends; having lunch together or with friends from other departments before performing the afternoon prayers at a mosque near MAS. When asked about their happy memories in MAS, both men speak of the relationships with friends and colleagues that have kept them going.

Sapuan said: “In those days, from ‘71 to the ‘80s, we were like a family. Because most of us who came in were really young, we clicked really well. We were even invited to many birthday parties back then.”

“There were no barriers and everyone was very easy-going with each other,” Zainal added with a smile.

They still keep in touch with former colleagues, with whom they used to watch movies and play soccer with after work.

“It’s like another family, maybe even closer than our own family,” said Sapuan with a laugh.



RISK MANAGEMENT AND BUSINESS CONTINUITY

BUSINESS CONTINUITY, DISASTER RECOVERY AND MEPS+ RESILIENCY

MAS conducts several exercises a year to ensure the operational readiness of staff and resiliency of its infrastructure under its Business Continuity and Disaster Recovery plans. In March 2015, an enterprise-wide mobilisation exercise to test the organisation’s business continuity plan was successfully conducted with MAS management and over 300 staff. MAS also conducts regular contingency exercises with the participants of MAS Electronic Payment System (MEPS+), CLS Bank and Society for Worldwide Interbank Financial Telecommunication (SWIFT) to ensure that the national payment system remains stable and resilient to minimise market disruption. MAS also reviewed its crisis management structure to strengthen our analytical capabilities to support crisis decision making and to facilitate a more seamless transition to crisis management.

INTERNATIONAL OPERATIONAL RISK WORKING GROUP

On the international front, MAS joined the International Operational Risk Working Group that discusses risk management approaches to address operational risks faced by central banks. MAS’ participation provided opportunities to benchmark its practices against our counterparts, and to exchange good risk management practices.

FINANCIAL INDUSTRY SECURITY PROGRAMME

At the industry level, MAS continued to work with the Singapore Police Force, and representatives from the financial industry under the Financial Industry Security Programme to enhance physical security (prevent crime and counter terrorism) and contingency preparedness within the industry.

MAS’ WHISTLEBLOWING POLICY

MAS has zero tolerance towards fraud. We encourage the public to report any fraud, unethical behaviour or breaches in our Code of Conduct by our staff. MAS will look into all feedback received

(www.mas.gov.sg/Contact-Information.aspx), and will treat any feedback provided with strict confidence.

Key Principles of MAS’ Code of Conduct

• Personal and professional behaviour: We uphold the highest standards of conduct and behaviour in and outside MAS to safeguard MAS’ reputation and interests. In all our dealings, we are guided by the principles of fairness, integrity, and professionalism.

• Duty of confidentiality: We safeguard, at all times, the confidentiality of documents and information obtained during the course of our employment with MAS and even after we leave MAS.

• Conflicts of interest: We avoid situations that may give rise to actual, potential, or perceived conflicts of interest. We take appropriate steps to mitigate potential conflicts of interest where such conflicts are unavoidable.

• Use of MAS’ resources: We use all MAS’ resources, including financial, intellectual and electronic assets, in a responsible and appropriate manner.

CONTROLS AND OPERATIONS

AUDIT ASSURANCE

The Internal Audit Department (IAD) conducts an extensive programme of risk-focused audits to provide audit assurance and ascertain the efficacy of operational processes and controls. During the year, IAD embarked on a review of our audit rating framework to give greater clarity to stakeholders on the state of control environment of the audited activity. Our internal quality assurance review concluded that our audit practices continue to be in line with established standards. We will continue to step up efforts to seek technology solutions to enhance audit processes and strengthen data analytics capabilities to attain a wider audit coverage and more in-depth analysis.



PROCUREMENT MANAGEMENT

Ensuring a transparent, open and fair procurement process is of paramount importance. MAS has reviewed its procurement practices and put in place new controls to further enhance its procedures.

SECURITY AND FIRE SAFETY

We have enhanced our security surveillance capability by doubling our CCTV coverage. We have also introduced video analytics to identify breaches more effectively.

BUILDING SERVICES AND INFRASTRUCTURE

MAS is in the process of compacting offices to optimise space usage and enhance work synergies between functional work units. The project is expected to be completed by Q3 2016.

As part of whole-of-government environmental susta inabi l i ty e ffor ts , other bu i ld ing infrastructures and services will be progressively upgraded by 2017 to meet new building requirements and energy standards.

MAS was one of the top performing Government offices in the 2014 Building and Construction Authority (BCA) Building Energy Benchmarking exercise (notified in 2015). MAS also achieved the BCA Green Mark Award (Platinum) in 2015.

ENHANCING PRODUCTIVITY AND BUILDING CAPABILITIES

STAFF MOBILITY AND PRODUCTIVITY

Improving staff and organisational productivity continues to be an important focus in MAS. To achieve this, we introduced the following initiatives:

• The Document Management Solution (DMS), which allows staff to create, manage, find and share information easily. The DMS brings together corporate documents previously stored in various locations into a central repository, enhancing knowledge sharing capabilities in MAS. It is also an integrated

collaboration platform where staff can share and co-author documents, as well as initiate document approval workflows from one location.

• Personal Mobility and Protection Suite, comprising OneDrive, a collaboration and mobility tool that allows staff to share documents and collaborate with colleagues, or to work with documents offline, and be able to synchronise them to the corporate network when back in office; MyBackUp, a data protection tool with self-help recovery functions to protect staff from accidental data loss.

REINFORCEMENT OF MAS’ IT SECURITY INFRASTRUCTURE

As part of MAS’ continuous efforts to strengthen its cyber defences and protect valuable information assets, MAS’ IT security infrastructure was reinforced with capabilities to detect anomalies and improve resilience against advanced cyber attacks. These defences will be enhanced to safeguard MAS against emerging cyber threats.

DATA GOVERNANCE AND ANALYTICS

Strengthening Data Governance ProcessesMAS believes that a sound data governance framework provides the foundation for consistent, reliable and useful data, and expands the potential for analytics within and beyond MAS. With the setting up of the Data Governance and Analytics Unit in April 2015, we have been focused on strengthening our internal data governance processes. We are fine-tuning our data management policies, which will lay out clear processes to aid the access, collection and quality of data.


DMS homepage



Growing Analytics Capabilities MAS’ roles as an economic policy maker, integrated supervisor overseeing financial institutions and operator of Singapore’s national payment system require it to collect, store and analyse massive and varied data from many different sources. With an increasing demand to derive quicker and deeper insights from this wealth of data, we have embarked on several analytics-related projects to facilitate cross-functional analysis of data, enable new insights and enhance surveillance through better data visualisation and discovery tools.

MAS is also continuously growing our data analytics capabilities. We started a sponsorship programme for Massive Open Online Courses in data science to give staff good grounding in data science concepts and tools for their daily work.

Engaging Public AgenciesMAS collaborates actively with other public agencies on various whole-of-government initiatives. We are working with the Infocomm Development Authority (IDA) on the provision of MAS’ datasets on the revamped data.gov.sg, with the aim of making our data more relevant and accessible to both the industry and general public. We have also collaborated with IDA on the Personal Data Protection Challenge, where a total of 13 teams submitted their solutions to MAS’ challenge statement.

BUILDING A STRONG MAS FAMILY

EMPLOYEE ENGAGEMENT SURVEY

MAS conducted an Employee Engagement Survey (EES) in October 2015, to gauge the level of staff engagement and identify areas for improvement within the organisation. The survey, the fourth since 2008, drew a strong participation rate of 95%. The EES was followed by a series of town halls, with discussions involving all MAS staff and management.

The EES process highlighted several areas of strengths in the organisation, in particular staff’s strong connection to the values of MAS and a spirit of collaboration across departments. MAS is taking

steps to address key issues arising from the EES, such as improving productivity and streamlining work processes, in our continuing efforts to make MAS a better workplace for all staff.

BRINGING OUR PEOPLE CLOSER, CELEBRATING SG50

The 43rd and 44th MAS Recreation Club Committees continued to create opportunities for staff to come together and bond meaningfully. These included special events organised in 2015 as part of Singapore’s Golden Jubilee celebrations. We saw greater staff participation in performances, sports events and support for our adopted beneficiaries. This allowed staff to build connections outside of the office while celebrating Singapore’s 50th year of independence.

MAS Carnival & Community Service Day 2015The inaugural MAS Carnival was held on 9 June 2015 at Toa Payoh Stadium and Sports Hall. About 900 staff attended the Carnival to cheer on over 250 colleagues competing against each other

Staff at the EES Town Hall sessions



in multiple sporting activities and tele-matches. These included track and field, tug-of-war, netball, dodgeball and flag football. Community Service Day 2015 was also held in conjunction with the Carnival, with participating departments organising innovative activities (e.g. a Cold Splash challenge) alongside sales of delicious food and beverages to raise funds for MAS’ adopted beneficiaries.

Community Service MAS continued to organise activities in support of our adopted beneficiaries – Lions Befrienders, Grace Orchard School and the New Horizon Centre. Our volunteers held block parties and excursion trips for elderly folks to events such as the ASEAN Para Games, and helped spring clean their homes over Chinese New Year. We also conducted mock interviews for special needs children, as well as organised a special outing to Jurong Bird Park for them and their families which incorporated staff-run games stations.

Our thanks go out to all staff who participated in MAS fundraising events. Through Community Service Day, Heartstrings Walk and the Care & Share pledge cards, staff contributed more than $30,000 to ComChest in 2014. In recognition of the funds raised, MAS was awarded the Corporate Bronze Award by ComChest in 2015, one of two government agencies to receive the award since its inception in 2011. MAS also continued to support other initiatives such as the annual Share-A-Gift initiative by Boys’ Brigade, and Red Cross disaster relief for the victims of the 2015 Nepal earthquake.

Annual Dinner 2015On 24 July 2015, MAS staff gathered at the Raffles City Convention Centre for an unforgettable evening, reminiscing local television classics and celebrating Singaporean icons through the years. Themed “Spectacular, Spectacular!”, the event involved everyone through costume competitions, staff emcees and performances, and even a surprise management performance.

SG50 National Day CelebrationsMAS staff were treated to a special National Day Celebration on 6 August 2015. The Golden Jubilee commemoration event was themed “It All Started With A Dream”, to celebrate how far we have come as a nation in the last 50 years. Staff were moved by the “Resilience” video which reviewed some of the key events of the organisation through staff interviews. They also enjoyed the games and performances by the newest officers, and a buffet lunch. The contributions of long-serving colleagues were also recognised and celebrated in an awards ceremony.

Inter-Central Bank Games 2015The 39th Inter-Central Bank Games (ICBG) took place from 18 to 21 September 2015 in Kota Kinabalu, Malaysia. MAS’ representatives competed with our regional counterparts in Vertical Run, Basketball, Flag Football, Darts, Virtual Games and the ICBG-Got-Talent competition. MAS finished in 4th place overall.



Kidz@Work 2015On 24 December 2015, over 100 children of MAS staff enjoyed themselves at the annual MAS Kidz@Work event. The party kicked off with a magic show and a staff-choreographed musical performance. The children were then treated to a carnival with free-flow popcorn and candy floss, a photo booth, balloon sculpting, and a wide range of games stations.

Family Day 2016MAS’ annual Family Day took place at the Jurong Bird Park on 12 March 2016. Themed “It’s gonna be Birdy Good!”, the event attracted over 500 staff and their families for a morning of fun and bonding amid our feathered friends. The entertainment included an interactive bird show, snack stalls, variety games, a magic show and a lucky draw.

PEOPLE DEVELOPMENT

Building Technical CompetenciesTo keep up with growing complexities of the industry, improve productivity, and maximise our potential, MAS encourages staff to continually develop and deepen their skills. Development opportunities include on-the-job and classroom training, scholarships for post-graduate studies, educational sponsorships, postings to complementary functions within MAS, and external secondments and attachments. The external secondments and attachments to supranational organisations, foreign central banks and supervisory authorities, as well as leading financial institutions provide our officers with valuable opportunities to acquire technical expertise, industry knowledge and best practices.

General Development TrainingA broad suite of general development training programmes based on the Capacity, Leadership, Interpersonal skills, and Personal attributes (CLIP) framework are also offered to staff. These include a good range of courses that equip staff with written and verbal communication skills, personal effectiveness, and tools for effective engagement and leadership.

Functional Training The MAS Academy offers technical programmes to build and strengthen functional competencies required across the organisation, as guided by MAS’ Professional Requisites and Outcomes Framework (PROF). The types of training include classroom programmes, as well as talks by experienced professionals, industry experts and academics on emerging trends and areas of specialisation relevant to MAS.

MAS DiplomaThe MAS Academy offers the MAS Diploma – a three-year flagship programme, which gives a broad-based education on MAS’ key functions. The compulsory modules cover the foundations



of central banking, financial regulation, supervision and development. Participants also choose elective modules covering a wide range of specialised topics depending on their interests. To attain the Diploma, they are also required to complete a final year project to contribute to the knowledge building and sharing culture within MAS. In FY 2015/16, there were 39 graduates from the programme.

LEADERSHIP DEVELOPMENT

MAS Leadership ProgrammesThe MAS Leader Development Programme is designed for Division Heads and Specialist Leaders, and focuses on areas such as leadership development, policy formulation and stakeholder engagement. The MAS Manager Development Programme comprises programmes that are targeted at staff who are newly appointed into a managerial role, and those who are experienced managers respectively.

RECOGNITION OF STAFF

Service Appreciation AwardsThe Service Appreciation Award (SAA) recognises and celebrates the loyalty and contributions of our dedicated staff. The awards ceremony was held on 6 August 2015. In all, 189 staff received the SAA for service in MAS ranging from five years to 40 years. Thirteen staff received the 40-year award.

National Day AwardsIn 2015, 15 MAS staff were honoured for their contributions and service to the nation. Among the recipients were Assistant Managing Director Chia Der Jiun and Assistant Managing Director Wong Nai Seng who were conferred the Public Administration (Silver) Medal. We extend our heartiest congratulations to all our National Day Award recipients.

PARTNERSHIP WITH UNION

MAS was conferred the Plaque of Commendation Award at the NTUC May Day Awards 2015, under the nomination of our union, the Amalgamated Union of Public Employees. The honour is given to companies that have made significant contributions to the Labour Movement and signifies our strong partnership with the union developed over the years through mutual trust and respect.

Guest of Honour, Mr Tharman Shanmugaratnam, Deputy Prime Minister and Chairman of MAS at the NTUC May Day Dinner 2015 and representatives from MAS at the NTUC May Day Awards 2015, with MAS’ Plaque of Commendation Award


82 FinancialStatementHighlights

83 StatementbyDirectors

84 Auditor’sReport

86 ConsolidatedStatementofComprehensiveIncome

87 ConsolidatedBalanceSheet

88 ConsolidatedStatementofChangesinEquity

89 ConsolidatedCashFlowStatement

90 StatementofBackingofCurrencyinCirculation

91 NotestotheConsolidatedFinancialStatements

FINANCIAL STATEMENTS


MAS FY2015/2016 FINANCIAL STATEMENT HIGHLIGHTS

The Authority’s total assets, including the Currency Fund’s assets, decreased by 0.6% over the financial year ended March 2016, to $385.1 billion, as foreign financial assets translated to stronger Singapore dollar terms, contracted. Total liabilities also declined, by 0.7% to $344.3 billion, mainly due to the $19.3 billion reduction in outstanding MAS bills issued, offset partially by the $9.2 billion increase in the Singapore Government’s balances with the Authority and other smaller increases in liabilities. The currency-in-circulation grew by 6.4%.

The Currency Fund’s net external assets grew by 5.6% to $48.8 billion, backing the higher currency-in-circulation by 124%, compared to 125% a year ago.

The Authority recorded a net profit of $0.2 billion in the financial year ended March 2016 (FY15), as total income increased by 27.6% to $1.9 billion whilst total expenditure rose by 44.4% to $1.7 billion. The SGD translation effect was negative due mainly to the strengthening of the SGD against the USD and GBP by 1.9% and 5.2% respectively which was offset partly by the weakening of the SGD against the Euro and Yen by 4.0% and 4.5% respectively.

The Authority’s total expenditure increase was attributable to higher investment and interest expenditure. Whilst the Authority’s borrowings were reduced significantly during the year, Singapore dollar interest rates averaged higher, compared to the previous year. General and administrative expenditure was higher, arising mainly from costs related to the SG50 commemorative note issuance.

Based on the framework for Contributions to Consolidated Fund, no contribution to the Consolidated Fund is required for this financial year as the net profit for the year was offset by carried forward losses from previous financial years. The net profit for the year will be added to the Authority’s reserves, in accordance with the Monetary Authority of Singapore Act.


STATEMENT BY DIRECTORSFOR THE FINANCIAL YEAR ENDED 31 MARCH 2016

In the opinion of the directors,

(a) the consolidated financial statements of the Authority and its wholly-owned subsidiary, Singapore Sukuk Pte Ltd, as set out on pages 86 to 110 are drawn up so as to present fairly the state of affairs of the Authority as at 31 March 2016, the results and changes in equity of the Authority for the financial year ended on that date, and of the cash flows of the Authority for the financial year then ended; and

(b) at the date of this statement, there are reasonable grounds to believe that the Authority will be able to pay its debts as and when they fall due.

On behalf of the Board of Directors,

THARMANSHANMUGARATNAMChairman

RAVIMENONManaging Director

24 June 2016


INDEPENDENT AUDITOR’S REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS OF THE MONETARY AUTHORITY OF SINGAPOREFOR THE FINANCIAL YEAR ENDED 31 MARCH 2016

The accompanying financial statements of the Monetary Authority of Singapore (the “Authority”), its subsidiary and Currency Fund, set out on pages 86 to 110, have been audited under my direction. These financial statements comprise the consolidated balance sheet as at 31 March 2016, the consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated cash flow statement and statement of backing of currency in circulation for the financial year then ended, and a summary of significant accounting policies and other explanatory information.

MANAGEMENT’SRESPONSIBILITYFORTHEFINANCIALSTATEMENTS

The management is responsible for the preparation and fair presentation of these financial statements in accordance with the provisions of the Monetary Authority of Singapore Act (Cap. 186, 1999 Revised Edition) and Currency Act (Cap. 69, 2002 Revised Edition) and applicable Singapore Financial Reporting Standards as explained in Note 3.1(a) to the consolidated financial statements, and for such internal controls as management determines are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

AUDITOR’SRESPONSIBILITY

My responsibility is to express an opinion on these financial statements based on the audit. The audit was conducted in accordance with the provisions of the Monetary Authority of Singapore Act and Currency Act and having regard to Singapore Standards on Auditing. Those standards require that ethical requirements be complied with, and that the audit be planned and performed to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating, within the context of applicable laws, the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my audit opinion.


OPINION

As disclosed in Note 3.1(a) to the consolidated financial statements, the Authority, in preparing these financial statements, is allowed under section 34(3) of the Monetary Authority of Singapore Act and section 21(10) of the Currency Act to comply with accounting standards to the extent that it is, in the opinion of the Authority, appropriate to do so, having regard to its objects and functions. As also disclosed in Note 3.1(a), the Authority has considered its responsibilities for managing the Singapore dollar exchange rate and the Official Foreign Reserves and is of the view that, for effective management of Singapore’s monetary policy, it would be appropriate not to meet, in some respects, the Singapore Financial Reporting Standards. The financial statements accordingly disclose less information than would be required under those Standards.

Having regard to the power given to the Authority under section 34(3) of the Monetary Authority of Singapore Act and section 21(10) of the Currency Act, in my opinion, the consolidated financial statements present fairly, based on the framework of accounting standards adopted by the Authority, the state of affairs of the Authority and its subsidiary as at 31 March 2016 and the financial transactions of the Authority and its subsidiary for the financial year ended on that date.

TANYOKEMENGWILLIEAUDITOR-GENERALSINGAPORE

24 June 2016


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

GeneralReserveFund

CurrencyFund Total

Fortheyearended31Marchin$millions

2016 2015 2016 2015 2016 2015

Income/(Loss) from Foreign Operations [after transfers to/from provisions] 4 433 (1,877) 1,451 3,072 1,884 1,195

Income/(Loss) from Domestic and Other Operations 5 (5) 266 3 11 (2) 277

Non-operating Income 6 10 11 1 – 11 11

TotalIncome/(Loss)[aftertransfersto/fromprovisions] 438 (1,600) 1,455 3,083 1,893 1,483

Less:

Investment, Interest and Other Expenses 7 1,302 798 106 102 1,408 900

Personnel Expenditure 8 224 220 – – 224 220

General and Administrative Expenditure 9 81 60 – – 81 60

Depreciation/Amortisation 16 23 22 – – 23 22

TotalExpenditure 1,630 1,100 106 102 1,736 1,202

Profit/(Loss)fortheYear[aftertransfersto/fromprovisions] (1,192) (2,700) 1,349 2,981 157 281

Less:

Contribution to Consolidated Fund 19.2 – – – – – –

NetProfit/(Loss)andTotalComprehensiveIncome/(Loss)fortheYear[aftertransfersto/fromprovisions] (1,192) (2,700) 1,349 2,981 157 281

The accompanying notes form an integral part of these financial statements.

Note


CONSOLIDATED BALANCE SHEET


Asat31Marchin$millions

Note 2016 2015

CAPITALANDRESERVES

Issued and Paid-up Capital 10 25,000 25,000

General Reserve Fund 11 6,396 6,455

Currency Fund Reserves 12 9,418 9,202

40,814 40,657

Represented by:

ASSETS

Cash and Bank Balances 861 876

Singapore Dollar Securities 13 8,661 7,723

Foreign Financial Assets 14 361,150 363,644

Gold 285 290

Other Assets 15 13,974 14,668

Property and Other Fixed Assets 16 190 184

385,121 387,385

Less:

LIABILITIES

Currency in Circulation 39,339 36,979

Deposits of Financial Institutions 17 26,823 25,783

MAS Bills 18 77,982 97,281

Foreign Financial Liabilities 14 19,972 17,841

Provisions and Other Liabilities 18 54,892 52,729

Amounts Due to Singapore Government 19 125,299 116,115

344,307 346,728

NETASSETSOFTHEAUTHORITY 40,814 40,657


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

in$millions

IssuedandPaid-upCapital

GeneralReserve

Fund

CurrencyFund

Reserves Total

Balanceasat1April2014 25,000 6,115 9,261 40,376

Total Comprehensive Income/(Loss) for the Year (after transfers to/from provisions) – (2,700) 2,981 281

Transfer of Reserves from Currency Fund – 3,040 (3,040) –

Balanceasat31March2015 25,000 6,455 9,202 40,657

Total Comprehensive Income/(Loss) for the Year (after transfers to/from provisions) – (1,192) 1,349 157

Transfer of Reserves from Currency Fund – 1,133 (1,133) –

Balanceasat31March2016 25,000 6,396 9,418 40,814



CONSOLIDATED CASH FLOW STATEMENT

Fortheyearended31Marchin$millions

2016 2015

CashFlowsfromOperatingActivities

Profit for the Year (after transfers to/from provisions) 157 281

Adjustments for: Depreciation/Amortisation of Fixed Assets and Other Assets 23 22

Profit before Working Capital Changes 180 303

(Increase)/Decrease in Singapore Dollar Securities (938) (716) Foreign Financial Assets 2,494 (3,618) Gold 5 (24) Other Assets 694 (2,575)

Increase/(Decrease) in Deposits of Financial Institutions 1,040 (8,574) MAS Bills (19,299) 20,944 Foreign Financial Liabilities 2,131 908 Provisions and Other Liabilities 2,169 (10,131) Amounts due to Singapore Government

(excluding Contribution to Consolidated Fund and Return of Profit to Singapore Government) 9,184 384

NetCashusedinOperatingActivities (2,340) (3,099)

CashFlowsfromInvestingActivitiesPurchase of Fixed Assets (35) (27)

NetCashusedinInvestingActivities (35) (27)

CashFlowsfromFinancingActivitiesIncrease in Currency in Circulation 2,360 3,120

NetCashfromFinancingActivities 2,360 3,120

NetDecreaseinCashandBankBalances (15) (6)

CashandBankBalancesasatbeginningoftheyear 876 882

CashandBankBalancesasatendoftheyear 861 876



The Currency Fund is established under Section 21 of the Currency Act (Cap. 69, 2002 Revised Edition). Section 22 of the Act states that the external assets of the Currency Fund shall not be less than 100% of the face value of the Currency in Circulation.

Asat31Marchin$millions

Note 2016 2015

The value of External Assets and the Currency in Circulation are:

Currency in Circulation 12.2 39,339 36,979

External Assets 12.2 52,153 48,039

Less:

Foreign Financial Liabilities 12.2 2,925 1,668

Provisions and Other Liabilities 12.2 471 190

3,396 1,858

Net External Assets 48,757 46,181

STATEMENT OF BACKING OF CURRENCY IN CIRCULATION



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2016

These notes form an integral part of and should be read in conjunction with the accompanying consolidated financial statements.

1 GENERAL

1.1 The Monetary Authority of Singapore (the “Authority”) is a statutory board established in Singapore under the Monetary Authority of Singapore Act (Cap. 186, 1999 Revised Edition) on 1 January 1971 and is located at 10 Shenton Way, MAS Building, Singapore 079117.

1.2 The consolidated financial statements presented relate to those of the Authority and its wholly-owned subsidiary, Singapore Sukuk Pte Ltd (SSPL). The financial statements of the Authority are not materially different from the consolidated financial statements and have not been presented separately.

1.3 The Authority, subject to the directions of the Minister, controls and administers the Financial Sector Development Fund (the “Fund”), a fund established under Section 30A of the Monetary Authority of Singapore Act (Cap. 186, 1999 Revised Edition) for the objects and purposes set out in Section 30B of the Monetary Authority of Singapore Act. The audited financial statements of the Fund, prepared in accordance with the provisions of the Monetary Authority of Singapore Act (Cap. 186, 1999 Revised Edition) and the Singapore Financial Reporting Standards, are available on the Authority’s website at http://www.mas.gov.sg.

2 PRINCIPALACTIVITIES

2.1 The principal activities of the Authority are:

a) the conduct of monetary policy, issuance of currency, management of the official foreign reserves and acting as the banker to and financial agent of the Government; and

b) the supervision of the banking, insurance, securities and futures industries, and development of strategies in partnership with the private sector to promote Singapore as an international financial centre.

2.2 The Authority’s subsidiary, SSPL, is a special purpose entity incorporated in Singapore, to issue Sukuk certificates as Shariah-compliant assets to Islamic financial institutions to meet regulatory requirements.


3 SIGNIFICANTACCOUNTINGPOLICIES

3.1 CompliancewiththeMonetaryAuthorityofSingaporeAct,CurrencyActandSingaporeFinancialReportingStandards

a) The consolidated financial statements of the Authority, are prepared in accordance with the Monetary Authority of Singapore Act (Cap. 186, 1999 Revised Edition), Currency Act (Cap. 69, 2002 Revised Edition) and applicable Singapore Financial Reporting Standards (FRS). Section 34(3) of the Monetary Authority of Singapore Act and Section 21(10) of the Currency Act provide that the Authority, in preparing its consolidated financial statements, may comply with accounting standards to the extent that it is, in the opinion of the Authority, appropriate to do so, having regard to the objects and functions of the Authority. The Authority, having considered its responsibilities for managing the Singapore dollar exchange rate and the official foreign reserves, is of the opinion that, for effective management of Singapore’s monetary policy, it is appropriate not to meet, in some respects, the Singapore Financial Reporting Standards. The consolidated financial statements accordingly disclose less information than would be required under those Standards.

b) The new or revised FRSs applicable in the current financial year do not have a significant impact on the Authority’s consolidated financial statements.

c) The preparation of consolidated financial statements in conformity with FRS requires

management to exercise its judgement in the process of applying the Authority’s accounting policies, having regard to the objects and functions of the Authority. It also requires the use of accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of income and expenditure during the financial year. Although these estimates are based on management’s best knowledge of current events and actions, actual results may ultimately differ from these estimates.

3.2 BasisofAccounting

The consolidated financial statements have been prepared under the historical cost convention and on an accrual basis, except as otherwise disclosed.

3.3 BasisofConsolidation

a) Subsidiaries are entities (including structured entities) over which the Authority has control. The Authority controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.




b) A subsidiary is consolidated from the date control is established, acquired or transferred to the Authority to the date control ceases. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange.

c) Balances and transactions between the Authority and its subsidiary, together with any unrealised profits and losses arising from these transactions are eliminated, in preparing the consolidated financial statements.

3.4 ForeignCurrencyTranslation

a) The consolidated financial statements are presented in Singapore dollars, the Authority’s functional currency, and rounded to the nearest million, unless otherwise stated.

b) Transactions in foreign currency are measured at the exchange rate prevailing at the date of transaction. Foreign currency gains or losses resulting from the settlement of such transactions are recognised in the consolidated statement of comprehensive income.

c) Assets and liabilities denominated in foreign currencies are translated into Singapore dollars, at the exchange rate prevailing on the balance sheet date, except for shareholdings in Bank for International Settlements (BIS) and Society for Worldwide Interbank Financial Telecommunication (SWIFT) which are converted at the rates of exchange prevailing on the acquisition dates. Exchange differences arising from the translation are recognised in the consolidated statement of comprehensive income.

3.5 RecognitionandDerecognition

Purchases and sales of investments are recognised on the trade date when the Authority commits to purchase or sell the asset. Investments are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Authority has transferred substantially all risks and rewards of ownership.

3.6 IncomeRecognition

a) Dividend income is recognised when the right to receive payment is established.

b) Interest income is recognised on a time-proportionate basis using the effective interest method. The effective interest rate is the rate that discounts estimated future cash payments or receipts through the expected life of the financial instrument or, where appropriate, a shorter period to the net carrying amount.


c) Profits/losses on disposal of investments are taken to the consolidated statement of comprehensive income.

d) Licence fee income is recognised on a straight-line basis over the period of the licence.

3.7 SingaporeDollarSecurities

Singapore Government Treasury bills and bonds and corporate bonds held are stated at cost. Provision has been made for diminution in value, if any, based on the lower of cost and market value on an individual investment basis.

3.8 Gold

Gold is a long-term investment stated at cost. Provision for diminution in value would be made in the event of a decline other than temporary in its value.

3.9 ForeignFinancialAssetsandLiabilities

Foreign financial assets and liabilities represent the Authority’s investments in a global diversified portfolio and are stated at cost. Provision has been made for diminution in value, if any, based on the lower of cost and market value on an individual investment basis.

3.10 FinancialDerivatives

Financial derivatives include forwards, swaps, futures and options and are included in foreign financial assets and foreign financial liabilities. Other than financial instruments that are subject to margin requirements or central clearing which are fair valued, provision has been made for diminution in value, if any, of other financial derivatives based on the lower of cost and market value on an individual investment basis.

3.11 RepurchaseandReverseRepurchaseAgreements(“Repos”and“ReverseRepos”)

Reverse repos are treated as collateralised borrowings and the amounts borrowed are included in “Provisions and Other Liabilities”. The securities sold under reverse repos are treated as pledged assets and remain on the consolidated balance sheet. Repos are treated as collateralised lending and the amounts lent are included in “Other Assets”. The difference between the amount received and the amount paid under repos and reverse repos is recognised as interest income and interest expense respectively.

3.12 Property,OtherFixedAssetsandDepreciation

a) Property and other fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. The cost includes expenditure that is directly attributable to the acquisition of the items. Depreciation is calculated on a straight-line basis to write off the cost less residual value of the fixed assets over their estimated useful lives as follows:



Usefullives

Leasehold Land Period of lease

Buildings 50 years or period of lease whichever is lower

Building Improvements 10 years

Computer Hardware and Software 3 to 5 years

Furniture, Fixtures, Motor Vehicles and Other Equipment

3 to 5 years

The residual values and useful lives are reviewed and adjusted as appropriate, at each

balance sheet date.

b) Computer software costs of less than $100,000 and other assets costing $1,000 and below are expensed off in the year of purchase. Any computer software costs not written off, are included in fixed assets.

c) Property and other fixed assets are reviewed for impairment whenever there is any indication that these assets may be impaired. If such indication exists, the recoverable amount of the asset is estimated to determine the amount of impairment loss. The impairment loss is recognised in the consolidated statement of comprehensive income for the period.

Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased. The reversal, if any, is recognised in the consolidated statement of comprehensive income. However, the increased carrying amount of an asset due to a reversal of an impairment is recognised to the extent that it does not exceed the carrying amount that would have been determined (net of depreciation or amortisation) had no impairment losses been recognised for the asset in prior years.

d) On disposal of fixed assets, the difference between the net disposal proceeds and its carrying amount is taken to the consolidated statement of comprehensive income.

3.13 OperatingLeases

a) Leases where substantially all the rewards and risks of ownership remain with the lessors are accounted for as operating leases. Rental receipts or payments under operating leases are accounted for in the consolidated statement of comprehensive income on an accrual basis according to the terms of the agreements.

b) When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an income or expense in the period in which termination takes place.



3.14 EmployeeBenefits

a) Defined contribution plans

Defined contribution plans are post-employment benefit plans under which the Authority pays fixed contributions into entities such as the Central Provident Fund, and will have no legal or constructive obligation to pay further contributions. The Authority’s contributions to defined contribution plans are recognised in the financial year to which they relate.

b) Employee leave entitlement

Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for annual leave as a result of services rendered by employees up to the balance sheet date.

4 INCOME/(LOSS)FROMFOREIGNOPERATIONS

Income/(Loss) from foreign operations includes interest, dividends, profit/loss on disposal of investments, foreign exchange gain/loss and write-back of/additional provision for diminution in value of investments.

5 INCOME/(LOSS)FROMDOMESTICANDOTHEROPERATIONS

Income/(loss) from domestic and other operations includes mainly interest, write-back of/additional provision for diminution in value of Singapore Dollar Securities and other income/(loss) from Singapore dollar money market transactions, licence and inspection fees, revenue from currency-related operations, custody fee and revenue from services rendered to banks and financial institutions on MAS Network and MAS Electronic Payment System which provides real-time gross settlement of payments.

Income/(loss) from Singapore dollar currency swaps has been reclassified from “Income/(Loss) from Foreign Operations” to “Income/(Loss) from Domestic and Other Operations” in the financial year ended 31 March 2016 to better reflect its function. The comparative amount in the preceding year has also been reclassified to be consistent with the presentation in the current financial year.

6 NON-OPERATINGINCOME

Non-operating income includes rental and carpark income, liquidated damages and management service fees.



7 INVESTMENT,INTERESTANDOTHEREXPENSES

Investment and interest expenses include management fees, futures/options commissions, bank, custody and other charges arising from foreign operations, and interest paid on borrowings and reverse repurchase agreements arising from domestic and other operations. Other expenses include costs of printing of currency notes and coin operations.

8 PERSONNELEXPENDITURE

8.1 This includes the following:

in$millions 2016 2015

Salaries 190 187

Employer’s Contribution to the Central Provident Fund 20 18

Staff Benefits and Training 10 10

The Minister-in-charge of the Authority is not paid a salary by the Authority. Directors’ fees for the year totalled $0.14 million (2015: $0.12 million). All Ministers serving on the Authority’s Board of Directors do not receive directors’ fees.

8.2 The key management personnel compensation is as follows:


Salaries and Other Short-term Employee Benefits 21 20

Other Long-term Employee Benefits 4 4

Post-employment benefits of $0.7 million (2015: $0.6 million) were also provided to key management personnel.

Executive Directors, Department Heads and above, are considered as key management

personnel for this purpose.



9 GENERALANDADMINISTRATIVEEXPENDITURE

This includes the following:


Information Technology 15 12

Publishing and Printing 13 –

Consultancy, Legal and Other Fees 8 4

Information Resources 6 6

Rental and Maintenance 6 5

Subscription to Organisations 5 4

Travel and Accommodation 5 5

IT Operating Lease 2 5

Audit Fee 1 1

10 CAPITALANDRESERVES

10.1 The issued and paid-up capital is wholly-owned by the Government of the Republic of Singapore.

10.2 The Authority manages its capital and reserves at an appropriate and adequate level, in pursuit of the Authority’s principal objects, as set out in Section 4 of the Monetary Authority of Singapore Act (Cap. 186, 1999 Revised Edition) that is, to maintain price stability conducive to sustainable economic growth, foster a sound and reputable financial centre, grow Singapore as an internationally competitive financial centre and ensure prudent and effective management of the official foreign reserves of Singapore. As required by the Constitution of the Republic of Singapore, the Authority has to determine and safeguard the past reserves of the Authority which were not accumulated during the current term of office of the Government.

10.3 Taking into consideration the Authority’s capital and reserves needs for its principal objects, the Authority conducts capital and reserves adequacy assessment regularly. It includes a comprehensive assessment of risks that the Authority is exposed to, the measurement, monitoring and stress testing of these risks and an evaluation of the adequacy of the Authority’s capital and reserves in relation to these risks.

10.4 The return of profit to the Singapore Government, from the General Reserve Fund and/or from the net profit for each financial year, is determined by the Authority and the remainder of the net profit, if any, is credited to the General Reserve Fund, in accordance with Section 6 of the Monetary Authority of Singapore Act (Cap. 186, 1999 Revised Edition).



11 GENERALRESERVEFUND

The General Reserve Fund is established under Section 6(1) of the Monetary Authority of Singapore Act (Cap. 186, 1999 Revised Edition).

12 CURRENCYFUNDRESERVES

12.1 The Currency Fund, established under Section 21 of the Currency Act (Cap. 69, 2002 Revised Edition), is maintained and managed by the Authority in the manner prescribed by the Act.

12.2 The assets and liabilities of the Currency Fund as at 31 March are as follows:

in$millions Note 2016 2015

ExternalAssets

Gold 223 227

Foreign Investments 14.1(a) 51,930 47,812

52,153 48,039

Less:

Liabilities

Active Currency in Circulation 38,506 36,130

Currency Held by the Authority 833 849

Currency in Circulation 39,339 36,979

Foreign Financial Liabilities 14.1(a) 2,925 1,668

Provisions and Other Liabilities 471 190

3,396 1,858

42,735 38,837

CurrencyFundReserves 9,418 9,202

13 SINGAPOREDOLLARSECURITIES

Singapore Dollar Securities comprise:


Singapore Government Bonds 8,609 7,713

Singapore Dollar Corporate Bonds 52 10

8,661 7,723



14 FOREIGNFINANCIALASSETSANDLIABILITIES

14.1(a) These comprise the following:

Note

GeneralReserveFund CurrencyFund Total

in$millions 2016 2015 2016 2015 2016 2015

ForeignInvestments

Bank Balances and Deposits 47,311 48,305 5,864 5,079 53,175 53,384

Securities (including Treasury Bills, Bonds and Equities) 251,221 257,089 44,390 40,981 295,611 298,070

Other Foreign Investments 6,773 7,375 1,676 1,752 8,449 9,127

InternationalMonetaryFund(IMF)Assets 14.2

Reserve Tranche 2,175 1,058 – – 2,175 1,058

Special Drawing Rights (SDRs) 1,412 1,654 – – 1,412 1,654

Loans under New Arrangements to

Borrow 224 247 – – 224 247

Poverty Reduction and Growth Facility – Heavily Indebted Poor Countries 8 8 – – 8 8

ShareholdinginBankforInternationalSettlements(BIS) 14.3 96 96 – – 96 96

ForeignFinancialAssets 309,220 315,832 51,930 47,812 361,150 363,644

ForeignBorrowingsandOtherLiabilities 15,635 14,765 2,925 1,668 18,560 16,433

IMFSDRAllocations 1,412 1,408 – – 1,412 1,408

ForeignFinancialLiabilities 17,047 16,173 2,925 1,668 19,972 17,841

21.1(c)

14.1(b)



14.1(b) The Authority’s allocations of Special Drawings Rights in IMF has been reclassified more appropriately from “Provision and Other Liabilities” to “Foreign Financial Liabilities” in the financial year ended 31 March 2016 and its comparative has also been reclassified accordingly to be consistent with the presentation in the current financial year.

14.2 InternationalMonetaryFund(IMF)Assets

The Reserve Tranche represents the amount of the paid-up portion of the Singapore quota. Special Drawing Rights (SDRs) are interest-yielding balances with IMF that can be exchanged for convertible currencies. Singapore participates in the Poverty Reduction and Growth Facility-Heavily Indebted Poor Countries (PRGF-HIPC). The PRGF-HIPC outstanding balance as at 31 March 2016 is SDR4.0 million [$7.7 million] (31 March 2015: SDR4.0 million [$7.7 million]), being the balance in Post-Special Contingent Account-2 with IMF which was transferred to the PRGF-HIPC on 24 April 2001 as an interest-free deposit maturing at the end of 2018.

14.3 BankforInternationalSettlements(BIS)

The Authority’s shareholding in the BIS comprises the 25% paid-up value of 4,285 (31 March 2015: 4,285) shares with a nominal value of SDR5,000 ($9,488) (31 March 2015: SDR5,000 [$9,462]) each.

15 OTHERASSETS

These comprise the following:


Loans, Deposits and Other Receivables 6,630 6,484

Receivable from MAS Bills Issued 4,293 5,387

Repurchase Agreements with Singapore Government 3,051 2,797

13,974 14,668



16 PROPERTYANDOTHERFIXEDASSETS

in$millionsLeasehold

Land Buildings

BuildingImprove-

ments

ComputerHardware

andSoftware

Furniture,Fixtures,Motor

VehiclesandOtherEquipment

Work-in-Progress Total

COST

As at 1.4.2014 48 171 94 117 29 24 483

Additions – – – 4 1 26 31

Disposals – – – (6) (2) – (8)

Transfers – – 13 13 – (26) –

As at 31.3.2015 48 171 107 128 28 24 506

ACCUMULATEDDEPRECIATION

As at 1.4.2014 17 88 91 85 26 – 307

Disposals – – – (6) (1) – (7)

Depreciation Charge 1 4 3 12 2 – 22

As at 31.3.2015 18 92 94 91 27 – 322

NETBOOKVALUEASAT31.3.2015 30 79 13 37 1 24 184

COST

As at 1.4.2015 48 171 107 128 28 24 506

Additions – – – 1 – 28 29

Disposals – – (1) (2) (4) – (7)

Transfers – – 14 11 4 (29) –

As at 31.3.2016 48 171 120 138 28 23 528

ACCUMULATEDDEPRECIATION

As at 1.4.2015 18 92 94 91 27 – 322

Disposals – – (1) (2) (4) – (7)

Depreciation Charge 1 4 2 14 2 – 23

As at 31.3.2016 19 96 95 103 25 – 338

NETBOOKVALUEASAT31.3.2016 29 75 25 35 3 23 190



17 DEPOSITSOFFINANCIALINSTITUTIONS


Banks 23,303 22,635

Finance Companies 381 359

Securities Companies 10 9

23,694 23,003

International Financial Institutions 960 459

Foreign Central Banks and Others 2,169 2,321

26,823 25,783

Deposits from banks and finance companies in Singapore include the minimum cash balances maintained by banks and finance companies with the Authority as required under the Banking Act (Cap. 19, 2008 Revised Edition) and the Finance Companies Act (Cap. 108, 2011 Revised Edition) respectively. Deposits from securities companies represent statutory deposits from holders of capital markets services licences required under the Securities and Futures (Licensing and Conduct of Business) Regulations.

18 MASBILLS,PROVISIONSANDOTHERLIABILITIES

18.1 As part of the Authority’s money market operations to manage the liquidity in the banking system, the Authority issues its own short-term bills.

18.2 Provisions have been made for contingencies under Section 6(2) of the Monetary Authority of Singapore Act (Cap. 186, 1999 Revised Edition). Other liabilities include borrowings from banks, borrowings under reverse repurchase agreements, creditors, Sukuk payable, accounts payable and accruals.

18.3 During the financial year ended 31 March 2016, SSPL, a wholly-owned subsidiary of the Authority, issued $140 million (2015: $140 million) Sukuk trust certificates with one year maturity and an income distribution rate of 1.28% (2015: 0.39%) per annum. The Sukuk issuance by SSPL is structured on the sale-and-leaseback or Al Ijarah of property assets of the Authority. Under agreements with SSPL, the Authority will sell, leaseback, provide a purchase undertaking of the property assets and receive from and make periodic payments to SSPL.



19 AMOUNTSDUETOSINGAPOREGOVERNMENT

19.1 The amounts due to the Singapore Government comprise the following:


Amounts due to Singapore Government, arising from Repurchase Agreements 3,051 2,797

Balances and Deposits of Singapore Government 122,248 113,318

125,299 116,115

19.2 Contribution to the Consolidated Fund is in accordance with the Statutory Corporations (Contributions to Consolidated Fund) Act (Cap. 319A, 2004 Revised Edition) and is based on 17% (2015: 17%) of the net profit for the year. In the financial year ended 31 March 2016, no contribution to the Consolidated Fund (2015: $nil) is payable as the cumulative loss from previous financial years is brought forward and offset against the net profit for the year.

20 STATUTORYDEPOSITSOFINSURANCECOMPANIES,REMITTANCELICENSEESANDCAPITALMARKETSSERVICESLICENSEES

Statutory bank deposits, guarantees and Singapore Government bonds of insurance companies, remittance licensees and capital markets services licensees, are retained by the Authority under the Insurance Act (Cap. 142, 2002 Revised Edition), the Money-changing and Remittance Businesses Act (Cap. 187, 2008 Revised Edition) and the Securities and Futures Act (Cap. 289, 2006 Revised Edition) respectively, and in the events specified, dealt with accordingly under the respective Acts.

21 COMMITMENTS

21.1 InternationalMonetaryFund(IMF)

a) On 15 December 2010, the IMF’s Board of Governors passed a resolution that would double the Fund’s total quotas and result in a major realignment of quota shares among members. In February 2016, Singapore paid up 25% of its full quota increase. As at 31 March 2016, the unpaid portion of the Singapore quota due to IMF under Section 4 of Article III of the Articles of Agreement is $5,328 million (31 March 2015: $1,669 million).

b) On 20 April 2012, the Authority announced that Singapore would make a bilateral contingent loan of US$4.0 billion ($5.4 billion) (31 March 2015: US$4.0 billion [$5.5 billion]) to the IMF as part of the broader international effort to boost IMF’s resources and strengthen global economic and financial stability.



c) As a participant in the IMF’s ‘New Arrangements to Borrow’ (NAB), the Authority undertakes to provide a credit line in the event of a financial emergency as specified by the NAB. With the quota increase paid in February 2016, Singapore’s NAB commitment decreased from SDR1,277 million to SDR649 million. As at 31 March 2016, the loans granted by the Authority under the NAB totalled SDR118 million ($224 million) (31 March 2015: SDR131 million [$247 million]). The remaining undrawn credit is SDR531 million ($1,007 million) as at 31 March 2016 (31 March 2015: SDR1,146 million [$2,169 million]).

d) During the financial year ended 31 March 2014, the Authority received SDR10.3 million ($20.1 million) being Singapore’s share of the second distribution of SDR1,750 million ($3,402 million) by IMF arising from the profits made in the IMF’s gold sales. Together with the Authority’s share of SDR4.1 million ($8 million) from the first distribution received during the financial year ended 31 March 2013, Singapore pledged to contribute its share of both distributions to the Poverty Reduction and Growth Trust (“PRGT”) subsidy account, subject to legislative amendments.

21.2 BankforInternationalSettlements(BIS)

The Authority has a commitment, amounting to SDR16.1 million ($30.6 million) as at 31 March 2016 (31 March 2015: SDR16.1 million [$30.5 million]), in respect of the uncalled portion of its shareholding in the BIS.

21.3 RepurchaseAgreementswithCentralBanksandMonetaryAuthority

The Authority entered into bilateral repurchase agreements totalling US$5,500 million ($7,406 million) (31 March 2015: US$5,500 million [$7,545 million]) with various Asian central banks and a monetary authority to provide liquidity assistance in times of emergency. For the financial year ended 31 March 2016, there was no request for liquidity assistance from any counterpart.

21.4 CurrencySwapArrangementswithCentralBanksandMonetaryAuthority

a) The Authority renewed the bilateral currency swap arrangement of CNY300 billion ($64 billion) with the People’s Bank of China for a further term of three years with effect from 7 March 2016. The arrangement allows the Authority to provide Chinese Yuan liquidity to financial institutions in Singapore for trade and financial stability purposes. As at 31 March 2016, the Authority has a currency swap of CNY10 billion ($2.1 billion) (31 March 2015: CNY10 billion [$2.2 billion]) with the People’s Bank of China.

b) The Authority is Singapore’s Swap Providing / Requesting Party in the Chiang Mai Initiative Multilateralisation (CMIM) Agreement involving the ASEAN member states, China (including the Hong Kong Monetary Authority, China), Japan and Korea. The CMIM Agreement, effective from 24 March 2010, provides financial support through



currency swap transactions, to address balance of payments and short-term liquidity difficulties in the region, and supplements existing international financial arrangements. In May 2012, the Chiang Mai Initiative Multilateralisation (CMIM) members agreed to strengthen the regional financial safety net and double the total size of the currency swap transactions with members to US$240 billion. The Authority’s commitment is US$9,104 million ($12,259 million) (31 March 2015: US$9,104 million [$12,489 million]) and the Authority can swap Singapore dollars for US dollars up to 2.5 times Singapore’s commitment.

c) The Authority and the Bank of Japan, acting as the agent for the Minister of Finance of Japan, signed the third Bilateral Swap Arrangement (BSA) on 21 May 2015. Under the agreement, the Authority can swap Singapore dollars for US dollars up to US$3,000 million ($4,040 million) while the Bank of Japan can swap Japanese Yen for up to US$1,000 million ($1,347 million).

d) The Authority is a participant in the multilateral ASEAN Swap Arrangement (ASA) together with other ASEAN central banks and a monetary authority to provide short-term foreign exchange liquidity support for member countries that may experience balance of payments difficulties. In November 2015, the ASA was renewed for an additional two years up to 16 November 2017. Under this agreement, the Authority’s commitment is US$300 million ($404 million) (31 March 2015: US$300 million [$412 million]).

e) Aside from the CNY swap with the People’s Bank of China, there was no other drawdown of any of the currency swap arrangements, in note 21.4, in financial years ended 31 March 2015 and 31 March 2016.

21.5 LiquidityLoanFacility The Authority entered into an agreement with the Singapore Deposit Insurance Corporation

Limited (SDIC) on 9 February 2012 where the Authority may provide the SDIC a contingent liquidity facility of up to $20 billion (31 March 2015: $20 billion), in the event a Deposit Insurance Scheme member fails and liquidity is needed for compensation payments to insured depositors. There was no request and drawdown on the facility in financial years ended 31 March 2015 and 31 March 2016.

21.6 CapitalExpenditureCommitments

Capital expenditure relating to fixed assets not provided for in the consolidated financial statements is as follows:


Amount contracted for 21 19



21.7 Leases

a) Future minimum lease payments under non-cancellable operating leases are as follows:


Less than 1 year 2 1

1 to 5 years 2 2

4 3 b) Future minimum lease rental receipts under non-cancellable operating leases are as

follows:


Less than 1 year 7 8

1 to 5 years 7 6

14 14

22 FINANCIALRISKMANAGEMENT

22.1 The Risk Committee, chaired by an independent Board Director, assists the Board of Directors in providing oversight and guidance over the management of risks assumed by the Authority. This encompasses the management of financial risks inherent in the Authority’s investment portfolios, amongst other organisational risks faced by the Authority.

22.2 The Risk Management Department provides senior management and the Risk Committee with regular reports of the risk profiles of the Authority’s investments. These reports cover risk measurement and analysis of the Authority’s investment portfolios. The department also formulates risk policies and controls, and performs independent risk monitoring of the portfolios in accordance with the stipulated investment guidelines.

22.3 MarketRisk

a) Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices and includes currency, interest rate and other price risks.

i) Currency risk is the risk of loss on foreign assets and liabilities arising from changes in foreign exchange rates.

ii) Interest rate risk is the risk of loss arising from changes in market interest rates.



iii) Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market.

b) Market risk is managed through regular monitoring of the market risk exposure of the Authority’s investments, the diversification of the Authority’s investments across different markets, and the establishment of investment risk tolerance and controls at both the aggregate and individual portfolio levels.

22.4 CreditRisk

a) Credit risk is the risk of loss arising from a party’s failure to discharge an obligation under a financial contract and includes counterparty and issuer credit risk.

b) The Authority’s credit risks are managed by transacting with entities of acceptable creditworthiness within assigned limits. Credit risks are also mitigated by diversifying credit exposures across counterparties and issuers and through collateral arrangements with counterparties whom the Authority has signed the International Swaps and Derivatives Association (ISDA) Credit Support Annex.

c) The Authority manages issuer credit risk by imposing minimum credit rating requirements on the investment of fixed income securities. Single issuer limits are placed to control the credit exposure to any one issuer and to mitigate the extent of loss resulting from a default.

22.5 CountryRisk

The Authority’s foreign assets are exposed to country credit risk arising from political, economic and financial events in the country of investment. Country limits are established to control the Authority’s credit risk exposure to individual countries.

22.6 LiquidityRisk

Liquidity risk is the risk arising from the inability to sell a financial asset at close to its fair value at short notice due to inadequate market depth or market disruptions. The Authority manages liquidity risk by investing mostly in liquid financial instruments and markets, and imposing limits on investments to ensure sufficient diversification and through regular monitoring of the liquidity profile of the Authority’s investments.



23 RELATEDPARTYTRANSACTIONS

23.1 The Financial Sector Development Fund (the “Fund”) maintains a non-interest bearing current account with the Authority to facilitate grant disbursements. The Fund’s current account balance with the Authority as at 31 March 2016 was $0.7 million (31 March 2015: $0.4 million).

23.2 The Authority also accepted deposits from the Fund, in the ordinary course of business and at arm’s length, incurring interest expense disclosed below:

in$thousands 2016 2015

Interest Expense 557 282

The Fund’s deposit balance with the Authority as at 31 March 2016 was $nil million (31 March 2015: $126 million).

24 SEGMENTREPORTING

Owing to their integrated nature, the Authority’s operations, including those of its subsidiary, SSPL, comprise one main operating segment only, i.e. the conduct of monetary policy, issuance of currency, management of the official foreign reserves and acting as the banker to and financial agent of the Government, for segment reporting purposes. In addition, the Authority’s operations are mainly in one geographical area, Singapore. All other segment information are below the quantitative thresholds for separate disclosure.

25 NEWORREVISEDACCOUNTINGSTANDARDSANDINTERPRETATIONS

New or revised accounting standards and interpretations to existing standards have been issued that are relevant for the Authority’s accounting periods beginning after 1 April 2015 or later periods and which the Authority has not early adopted. The Authority does not expect the following revised accounting standards that are applicable, to have a significant impact on the Authority’s consolidated financial statements.

Effective for annual periods beginning on or after 1 January 2016

Amendments to FRS 1 Presentation of Financial Statements: Disclosure Initiative

The amendments to FRS 1 clarify guidance on materiality and aggregation, the presentation of subtotals, the structure of financial statements and the disclosure of accounting policies.



Amendments to FRS 16 Property, Plant and Equipment

The amendments to FRS 16 explicitly state that revenue-based methods of depreciation are not appropriate for property, plant and equipment as they may reflect factors other than the diminution of economic benefits of the asset such as technical or commercial obsolescence or wear and tear while an asset remains idle.

Effective for annual periods beginning on or after 1 January 2017

Amendments to FRS 7 Statement of Cash Flows: Disclosure Initiative The amendments to FRS 7 require additional disclosures to enable the user of financial statements

to evaluate changes in liabilities arising from financing activities, such as providing a reconciliation between opening and closing balances in the balance sheet for liabilities arising from financing activities, and its link to the statement of cash flows.

26 AUTHORISATIONOFCONSOLIDATEDFINANCIALSTATEMENTS

The consolidated financial statements for the year ended 31 March 2016 were authorised by the Board of Directors for issuance and signed by Chairman and Managing Director on 24 June 2016.


A. MONETARY STATISTICS114 A1. Money Supply115 A2. Official Foreign Reserves116 A3. Exchange Rates117 A4. Domestic Interest Rates

B. COMMERCIAL BANKS118 B1. Assets And Liabilities119 B2. Loans And Advances By

Industrial Classification120 B3. Types Of Loans And Advances To

Non-Bank Customers121 B4. Types Of Deposits Including

S$NCDS122 B5. Liquidity Position

C. FINANCE COMPANIES123 C1. Assets And Liabilities

D. MERCHANT BANKS124 D1. Consolidated Assets And Liabilities125 D2. Assets And Liabilities Of Domestic

Unit Operations

E. INSURANCE INDUSTRY126 E1. Assets And Premiums

F. NON-BANK FINANCIAL INSTITUTIONS127 F1. Central Provident Fund Board

G. DOMESTIC CAPITAL MARKET128 G1. Net Funds Raised In The Domestic

Capital Market

H. ASIAN DOLLAR MARKET129 H1. Assets And Liabilities130 H2. Maturity Transformation By Asian

Currency Units

STATISTICAL ANNEXES


A.1

MO

NET

AR

Y S

TATI

STI

CS

:

MO

NEY

SU

PP

LYS

$ M

illio

nM

arch

End

of P

erio

d20

0720

0820

0920

1020

1120

1220

1320

1420

1520

16

Mon

ey S

uppl

y (M

1)63

,938

.675

,703

.893

,472

.111

2,48

7.0

130,

591.

914

0,70

9.1

154,

597.

316

0,21

7.7

160,

445.

815

9,73

3.9

C

urre

ncy

in a

ctiv

e ci

rcul

atio

n 116

,668

.518

,997

.420

,216

.522

,299

.524

,690

.326

,361

.328

,851

.631

,506

.934

,042

.334

,609

.6

Dem

and

depo

sits

47,2

70.1

56,7

06.4

73,2

55.6

90,1

87.5

105,

901.

611

4,34

7.8

125,

745.

712

8,71

0.8

126,

403.

512

5,12

4.3

Q

uasi

-mon

ey23

3,62

0.3

257,

707.

327

7,73

5.8

290,

609.

131

2,76

6.2

334,

683.

434

1,31

0.5

352,

213.

135

9,79

3.9

373,

310.

3

Fi

xed

depo

sits

151,

731.

715

5,12

1.9

156,

731.

115

4,41

7.3

160,

699.

617

5,27

0.8

171,

989.

317

2,71

2.0

174,

465.

418

6,09

8.4

Sav

ings

and

oth

er d

epos

its81

,822

.910

2,56

7.4

121,

004.

713

6,17

1.8

151,

901.

615

9,32

2.4

168,

838.

417

9,11

0.3

184,

606.

518

6,62

0.2

S$N

CD

s65

.718

.00.

020

.016

5.0

90.2

482.

839

0.8

722.

059

1.7

Mon

ey S

uppl

y (M

2)29

7,55

8.9

333,

411.

137

1,20

7.9

403,

096.

144

3,35

8.1

475,

392.

549

5,90

7.8

512,

430.

852

0,23

9.7

533,

044.

2

Net

dep

osits

with

fina

nce

com

pani

es9,

196.

08,

976.

47,

318.

17,

013.

28,

308.

210

,522

.910

,992

.211

,735

.612

,704

.812

,480

.8

Mon

ey S

uppl

y (M

3)30

6,75

4.9

342,

387.

537

8,52

6.0

410,

109.

345

1,66

6.3

485,

915.

450

6,90

0.0

524,

166.

453

2,94

4.5

545,

525.

0

1 F

igur

es e

xclu

de

com

mem

orat

ive,

num

ism

atic

and

bul

lion

coin

s is

sued

by

the

Mon

etar

y A

utho

rity

of S

inga

por

e an

d c

ash

held

by

com

mer

cial

ban

ks a

nd o

ther

fina

ncia

l ins

titut

ions

.

The

Boa

rd o

f Com

mis

sion

ers

of C

urre

ncy,

Sin

gap

ore,

mer

ged

with

the

Mon

etar

y A

utho

rity

of S

inga

por

e in

Oct

ober

200

2.


S$

Mill

ion

Mar

chE

nd o

f Per

iod

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Tota

l For

eign

Res

erve

s23

4,54

5.6

250,

346.

026

3,95

5.4

288,

954.

130

8,40

3.2

316,

744.

234

4,72

9.2

340,

438.

135

0,99

0.8

331,

526.

1

G

old

& F

orei

gn E

xcha

nge

233,

913.

124

9,54

6.1

261,

374.

628

6,56

3.3

305,

589.

531

3,98

7.3

341,

734.

833

7,67

6.1

348,

420.

532

8,69

4.3

R

eser

ve P

ositi

on in

the

IMF

128.

625

5.8

375.

542

1.0

1,08

0.8

1,11

5.8

1,29

6.7

1,08

4.1

852.

61,

419.

5

S

peci

al D

raw

ing

Rig

hts

(SD

Rs)

503.

954

4.1

2,20

5.3

1,96

9.8

1,73

2.9

1,64

1.1

1,69

7.7

1,67

7.9

1,71

7.7

1,41

2.3

Tota

l For

eign

Res

erve

s (U

S$

mill

ion)

162,

956.

817

4,19

6.3

187,

809.

122

5,75

4.2

237,

737.

025

9,30

7.1

273,

065.

125

6,86

0.4

247,

747.

424

6,19

5.8

1 W

ith e

ffect

from

May

199

9, t

he b

ook

valu

e of

fore

ign

rese

rve

asse

ts a

re t

rans

late

d a

t m

arke

t ex

chan

ge r

ates

pre

vaili

ng a

t th

e en

d o

f eac

h re

por

ting

mon

th.

A.2

MO

NET

AR

Y S

TATI

STI

CS

:

OFF

ICIA

L FO

REI

GN

RES

ERVE

S 1


S

$ P

er F

orei

gn C

urre

ncy

1st Q

trP

erio

d A

vera

ge20

0720

0820

0920

1020

1120

1220

1320

1420

1520

16

US

Dol

lar

1.50

711.

4148

1.45

451.

3635

1.25

791.

2497

1.25

131.

2671

1.37

481.

4049

100

Japa

nese

Yen

1.28

061.

3738

1.55

621.

5543

1.57

801.

5672

1.28

401.

1996

1.13

641.

2185

Eur

o2.

0638

2.07

712.

0242

1.80

951.

7495

1.60

711.

6621

1.68

371.

5267

1.54

84P

ound

Ste

rling

3.01

612.

6162

2.27

372.

1073

2.01

611.

9803

1.95

732.

0873

2.10

232.

0110

Sw

iss

Fran

c1.

2563

1.30

901.

3407

1.30

891.

4201

1.33

321.

3503

1.38

591.

4295

1.41

29A

ustr

alia

n D

olla

r1.

2624

1.20

161.

1473

1.25

241.

2971

1.29

401.

2107

1.14

311.

0339

1.01

2610

0 K

orea

n W

on0.

1622

0.13

060.

1143

0.11

800.

1135

0.11

090.

1144

0.12

040.

1215

0.11

6810

0 N

ew T

aiw

an D

olla

r4.

5870

4.48

744.

4023

4.32

924.

2798

4.22

624.

2155

4.18

124.

3298

4.23

90H

ong

Kon

g D

olla

r0.

1932

0.18

170.

1876

0.17

550.

1616

0.16

110.

1613

0.16

340.

1773

0.18

07M

alay

sian

Rin

ggit

0.43

840.

4247

0.41

260.

4234

0.41

110.

4046

0.39

730.

3873

0.35

340.

3344

Thai

Bah

t0.

0436

0.04

240.

0424

0.04

300.

0413

0.04

020.

0408

0.03

900.

0402

0.03

9410

0 In

done

sian

Rup

iah

0.01

650.

0147

0.01

400.

0150

0.01

430.

0133

0.01

200.

0107

0.01

030.

0104

Not

e: C

urre

ncie

s q

uote

d a

re t

hose

freq

uent

ly r

eque

sted

from

the

Aut

horit

y.

A.3

MO

NET

AR

Y S

TATI

STI

CS

:

EXC

HA

NG

E R

ATES


Per

Cen

t Per

Ann

um1s

t Qtr

Per

iod

Ave

rage

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Ban

ks1

Prim

e Le

ndin

g R

ate

5.33

5.38

5.38

5.38

5.38

5.38

5.38

5.35

5.35

5.35

Fixe

d D

epos

it R

ate

3-

mon

th0.

530.

420.

290.

210.

170.

140.

140.

140.

170.

19

6-m

onth

0.64

0.54

0.37

0.30

0.24

0.19

0.20

0.21

0.23

0.25

12

-mon

th0.

850.

730.

560.

480.

400.

300.

320.

320.

330.

35S

avin

gs D

epos

it R

ate

0.25

0.23

0.18

0.14

0.12

0.11

0.10

0.11

0.12

0.14

Fina

nce

Com

pani

es 2

Fixe

d D

epos

it R

ate

3-

mon

th0.

750.

490.

290.

220.

160.

160.

190.

180.

220.

30

6-m

onth

1.09

0.59

0.33

0.27

0.23

0.24

0.26

0.25

0.29

0.38

12

-mon

th1.

570.

900.

620.

540.

500.

480.

530.

530.

550.

58S

avin

gs D

epos

it R

ate

0.33

0.26

0.25

0.25

0.22

0.17

0.17

0.17

0.17

0.17

S$

SIB

OR

1-

mon

th2.

661.

140.

440.

380.

300.

310.

320.

360.

811.

09

3-m

onth

2.76

1.33

0.70

0.56

0.41

0.39

0.38

0.41

0.92

1.24

US

$ LI

BO

R

1-m

onth

5.25

2.67

0.33

0.27

0.23

0.24

0.19

0.16

0.20

0.43

3-

mon

th5.

302.

910.

690.

340.

340.

430.

270.

230.

320.

62

6-m

onth

5.25

3.04

1.12

0.52

0.51

0.69

0.41

0.33

0.48

0.87

1 A

vera

ge o

f 10

lead

ing

ban

ks.

2

Ave

rage

of a

ll fin

ance

com

pan

ies.

A.4

MO

NET

AR

Y S

TATI

STI

CS

:

DO

MES

TIC

INTE

RES

T R

ATES

Not

e: In

tere

st r

ates

for

ban

ks (e

xcep

t fo

r P

rime

Lend

ing

Rat

e) a

nd fi

nanc

e co

mp

anie

s re

fer

to a

vera

ge o

f end

of m

onth

rat

es.

Not

e: D

omes

tic in

terb

ank

rate

s ha

ve b

een

disc

ontin

ued

with

effe

ct fr

om 1

Jan

uary

201

4 an

d re

plac

ed w

ith S

$ S

IBO

R. U

S$

SIB

OR

rat

es h

ave

been

als

o re

plac

ed w

ith th

e U

S$

LIB

OR

, the

mos

t wid

ely-

used

US

$ in

tere

st r

ate

benc

hmar

k, s

o as

to a

lign

with

the

larg

er g

loba

l US

$ m

arke

t.


S$

Mill

ion

Mar

chE

nd o

f Per

iod

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Ass

ets

Cas

h in

han

d1,

772.

91,

739.

82,

026.

82,

219.

92,

796.

42,

756.

02,

807.

52,

917.

14,

396.

2 3

,673

.5

Bal

ance

s w

ith M

AS

9,53

0.4

13,4

66.0

13,9

99.9

15,8

78.7

17,8

15.3

19,5

03.3

32,1

07.0

20,3

11.6

22,2

18.5

23,

255.

6 S

$NC

Ds

held

0.0

0.0

0.0

0.0

9.9

201.

821

0.0

0.0

425.

023

7.5

Am

ount

s du

e fro

m b

anks

194,

828.

821

7,08

9.8

227,

923.

923

2,27

2.3

216,

223.

018

4,90

2.7

142,

986.

518

3,01

6.5

170,

139.

1 1

89,0

21.4

In S

inga

pore

59,9

24.1

52,5

72.1

57,1

88.2

77,9

72.8

58,8

57.6

44,0

59.5

27,6

01.4

32,3

91.8

26,9

60.5

32,

304.

0

AC

Us

58,9

45.9

73,1

34.5

87,2

08.0

69,1

52.1

62,1

25.1

44,0

61.6

29,2

16.8

46,8

89.1

51,6

60.2

55,

875.

4

Out

side

Sin

gapo

re75

,958

.891

,383

.283

,527

.785

,147

.495

,240

.396

,781

.586

,168

.310

3,73

5.6

91,5

18.4

100

,842

.0

Inve

stm

ents

91,9

43.8

98,7

15.0

122,

968.

013

0,08

1.3

137,

711.

515

3,31

8.2

167,

478.

718

4,96

0.5

194,

890.

5 1

98,8

24.7

In S

inga

pore

78,3

49.4

84,8

26.2

98,7

42.6

107,

526.

211

8,07

8.4

129,

130.

013

9,19

3.4

154,

168.

814

9,35

0.6

151

,065

.2

Gov

ernm

ent s

ecur

ities

59,9

34.1

66,6

96.1

81,3

18.8

84,8

53.4

91,4

17.5

98,4

22.4

98,2

13.9

106,

234.

310

8,84

5.3

110

,292

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Oth

ers

18,4

15.3

18,1

30.1

17,4

23.8

22,6

72.8

26,6

60.9

30,7

07.6

40,9

79.5

47,9

34.5

40,5

05.3

40,

773.

1

Out

side

Sin

gapo

re13

,594

.313

,889

.024

,225

.622

,555

.219

,633

.224

,188

.228

,285

.330

,791

.945

,539

.8 4

7,75

9.3

Loan

s an

d ad

vanc

es to

non

-ban

k cu

stom

ers

233,

393.

927

2,17

5.4

281,

296.

832

2,74

3.8

420,

455.

549

0,70

6.5

574,

274.

460

7,20

0.5

599,

756.

0 5

90,5

78.7

of

whi

ch b

ills

finan

cing

9,03

5.2

9,48

9.7

11,3

08.5

20,0

50.4

44,5

82.2

56,2

92.0

79,6

57.4

75,3

43.9

52,8

46.8

42,

070.

6 Fi

xed

and

othe

r ass

ets

51,3

89.2

65,1

12.3

58,5

98.7

78,4

11.4

60,7

99.7

59,6

20.6

53,3

62.6

61,2

36.0

65,6

95.4

69,

427.

7

Liab

ilitie

sP

aid-

up c

apita

l and

rese

rves

41,4

36.9

51,3

15.7

54,9

67.6

62,4

41.7

64,8

45.4

66,3

05.4

66,2

91.7

70,9

95.6

76,1

03.1

84,

633.

3 D

epos

its o

f non

-ban

k cu

stom

ers

314,

985.

834

7,50

7.4

391,

495.

143

3,75

7.8

483,

110.

351

8,84

0.7

537,

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955

0,36

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011.

5 5

73,3

99.3

S

$NC

Ds

issu

ed65

.718

.00.

020

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5.0

292.

069

2.8

390.

81,

147.

082

9.2

Am

ount

s du

e to

ban

ks16

5,52

0.8

184,

405.

117

6,39

4.4

188,

564.

922

6,42

7.6

244,

892.

229

3,98

6.6

339,

195.

431

8,25

1.5

311

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.9

In

Sin

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900.

512

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2,98

2.4

A

CU

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119,

350.

814

7,47

8.7

162,

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820

6,12

9.6

224,

430.

821

1,98

0.9

204

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O

utsi

de S

inga

pore

52,4

27.8

73,8

08.1

48,9

36.9

55,0

24.4

69,0

48.4

70,0

56.7

76,6

12.7

101,

888.

294

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4,46

2.6

Bill

s pa

yabl

e1,

254.

390

4.0

1,02

3.4

1,09

6.3

1,49

5.7

1,77

8.4

1,62

4.2

1,51

5.8

1,65

2.8

1,7

86.2

O

ther

liab

ilitie

s59

,595

.584

,148

.282

,933

.695

,726

.879

,757

.378

,900

.373

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.797

,180

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0,35

4.8

102

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.2

Tota

l Ass

ets/

Liab

ilitie

s58

2,85

9.0

668,

298.

470

6,81

4.2

781,

607.

485

5,81

1.4

911,

009.

097

3,22

6.8

1,05

9,64

2.3

1,05

7,52

0.6

1,07

5,01

9.1

B.1

CO

MM

ERC

IAL

BA

NK

S:

A

SS

ETS

AN

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ITS



GLOSSARY


GLOSSARY

AML/CFT Anti-Money Laundering and Countering the Financing of Terrorism

ASEAN Association of Southeast Asian Nations

ASEAN-4 ASEAN (Indonesia, Malaysia, Thailand and the Philippines)

ASEAN+3 ASEAN plus China, Japan and South Korea

BOJ Bank of Japan

CNY Chinese Yuan

COE Certificate of Entitlement

CPI Consumer Price Index

ECB European Central Bank

EUR Euro

FinTech Financial Technology

FSB Financial Stability Board

FY Financial Year

G20 Group of Twenty

G3 Group of Three

GBP British Pound

GDP Gross Domestic Product

IMF International Monetary Fund

INR Indian Rupee

IT Information Technology

JPY Japanese Yen

LIBOR London Interbank Offered Rate

MOU Memorandum of Understanding

NEA-3 Northeast Asia (Hong Kong, Taiwan and South Korea)

PBC People’s Bank of China

q-o-q Quarter-on-Quarter

RMB Renminbi

S$/SGD Singapore Dollar

S$NEER Nominal Effective Exchange Rate

SAAR Seasonally Adjusted Annualised Rate

SGX Singapore Exchange

SIBOR Singapore Interbank Offered Rate

y-o-y Year-on-Year

US$/USD United States Dollar

PublishedbyMonetaryAuthorityofSingaporeDesignedandproducedby:OculusDesignPteLtd

Copyright © Monetary Authority of Singapore 2016This annual report is copyright under the Monetary Authority of Singapore.No reproduction without permission. All rights reserved.

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