|
 |
|
Source:
www.mas.gov.sg |
|
MAS Enhances Corporate Governance
for Banks and Insurers |
|
|
The Monetary Authority of Singapore (MAS)
today (8 Sep 2005) issued Corporate Governance Regulations
("Regulations") and Guidelines on Corporate Governance ("Guidelines"). |
|
The Regulations and Guidelines are
enhancements to existing corporate governance requirements for banks,
financial holding companies and direct insurers. |
|
The Regulations, which are mandatory, form
the minimum corporate governance standards for banks, financial holding
companies and significant insurers1 incorporated in
Singapore. |
|
The Guidelines, which are based on the Code
of Corporate Governance (Code) issued by the Council of Corporate
Disclosure and Governance (CCDG), are best practice guidelines
applicable to banks, financial holding companies and direct insurers. |
|
The Regulations and Guidelines took into
account feedback received from a public consultation as well as
extensive consultations with the industry. |
|
"The enhancements to the existing
requirements reflect our ongoing commitment to promote sound corporate
governance practices in Singapore's banking and insurance sectors," said
Mr Heng Swee Keat, MAS' Managing Director. |
|
"The standards of corporate governance for
banks and direct insurers need to be higher than the other commercial
entities, to take into account the unique roles they play in the
financial system and the economy. The revised standards are consistent
with global best practices. MAS will continue to review and update these
standards, to ensure that they continue to remain relevant." |
|
The Regulations |
|
Requirements that MAS considers essential
for sound corporate governance are issued as regulations. These include
requirements on the: |
|
- Composition of the board of directors
(Board); |
|
- Establishment, composition and
responsibilities of various board committees; |
|
- Separation of roles for the Chairman
of the Board and Chief Executive Officer; |
|
The presence of an independent element on
the Board is important in any corporate governance framework.
Accordingly, MAS has specified the proportion of directors on the Board
and board committees who must be independent of the financial
institutions' management, business relationships and substantial
shareholders. |
|
The key composition requirements are
summarised at
Annex A. |
|
The Guidelines |
|
The Guidelines are best practices that banks
and direct insurers incorporated in Singapore are strongly encouraged to
adopt. |
|
They are based on the Code issued by the
CCDG, and supplemented with additional principles and guidelines to take
into account the unique characteristics of the banking and insurance
business, given the diverse and complex risks undertaken by these
financial institutions and their responsibilities to depositors and
policyholders. |
|
Implementation |
|
Banks and significant direct life insurers
will be given until their respective annual general meetings (AGMs) in
2007 to comply with the Regulations. Banks and direct insurers listed on
the Singapore Exchange (SGX) should disclose their corporate governance
practices and explain deviations from the Guidelines in their annual
reports for AGMs held from 1 January 2007 onwards. Institutions that are
not listed on the SGX should disclose the same on their websites. |
|
Enhancing SGX's Corporate Governance
Framework |
|
MAS will also apply the Regulations to the
SGX, with modifications to take into account SGX's regulatory role over
its members. |
|
Key among these is the presumption that SGX
directors who are related to a SGX member are not considered independent
from management and business relationships. |
|
To this effect, MAS has published draft
regulations for consultation in January 2005 and is refining them to
take into account the feedback received. We expect to bring the modified
regulations for SGX into force later this year. |
|
1 A "significant insurer" is a
direct life insurer incorporated in Singapore with assets of at least
$5billion. |
|
More..... (Annex A) |
|
Source:
www.mas.gov.sg Press Release 8 Sep
2005 |
|
 |
|
|
MAS enhances corporate governance for banks & insurers
