• MAS to simplify oversight role of Singapore Exchange
  • Central bank to enhance market surveillance capabilities

The Monetary Authority of Singapore is refining the regulatory system in which Singapore Exchange Ltd. operates amid the emergence of rival bourses in the city state.

Starting from this year, as long as exchange members are licensed by the MAS, the central bank will no longer require bourses to inspect their members in areas of capital and reserves, business conduct, anti-money laundering and counter terrorist financing, and operational resilience, according to Deputy Managing Director Ong Chong Tee.

The MAS also plans to boost its market surveillance capabilities across markets, he said in a speech at an event organized by the exchange. SGX, as the only securities exchange in Singapore, remains an appropriate listing authority, he said.

SGX, Southeast Asia’s biggest bourse, is facing increased competition as global rivals bring new products to the region. Intercontinental Exchange Inc., owner of the New York Stock Exchange, opened its futures venue in Singapore in November, while Deutsche Boerse AG plans to start a derivatives market next year.

“There is scope to recalibrate the responsibilities of the exchange,” Ong said. “The impetus for such a recalibration is not because we think that there is material or potential conflict-of-interest risk. Rather, as Singapore’s financial landscape features more than one exchange, it is not efficient to have each exchange carry out similar supervisory roles of common members.”

With the changes, the bourses can focus on the supervision of members with significant risk exposures, including foreign entities not under the MAS’s oversight, Ong said.

“The presence of multiple exchanges, each focused on its own markets, can give rise to blind spots as each exchange may not have the complete picture of common members’ exposure and activities,” Ong said. “There are also certain markets such as in the OTC derivatives space that are not under the direct surveillance of exchanges.”

MAS will be in a better position to aggregate and review different pools of information in the activities across exchanges and market sectors to anticipate possible risk and to investigate potential misconduct and market abuses, he said.

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