Regulatory Alerts2020-02-18
Added · Updated
Circular on Good Practices in Managing Customers' Credit Risks
The Monetary Authority of Singapore issued this circular to require financial institutions to implement robust credit risk management policies for contra trading activities involving securities and collective investment schemes. The regulator mandates specific pre-trade controls, including setting appropriate trading limits based on creditworthiness and segregating risk management functions from front-office operations. Additionally, institutions must conduct continuous monitoring of exposures, perform periodic reviews of limits, and execute stress testing to mitigate contagion risks arising from investor leverage.
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