Notice on Lending of Singapore Dollar to Non-Resident Financial Institutions for Holders of Capital Markets Services Licence

Monetary Authority of Singapore SECURITIES AND FUTURES ACT (CAP. 289) NOTICE ON LENDING OF SINGAPORE DOLLAR TO NON-RESIDENT FINANCIAL INSTITUTIONS FOR HOLDERS OF CAPITAL MARKETS SERVICES LICENCE

Notice No : SFA 04-N04 Issue Date : 28 May 2004 (last revised on 28 June 2021) NOTICE ON LENDING OF SINGAPORE DOLLAR TO NON￾RESIDENT FINANCIAL INSTITUTIONS FOR HOLDERS OF CAPITAL MARKETS SERVICES LICENCE MAS Notice 1201 dated 20 March 2002 is cancelled. 1 Scope 1.1 This Notice issued pursuant to section 101 of the Securities and Futures Act (Cap 289) (the “Act”) governs the lending of S$ by Capital Markets Services Licence Holders to non-resident financial institutions. [MAS Notice SFA 04-N04 (Amendment) 2021] 1.2 This Notice is only applicable to holders of a capital markets services licence to carry on a business of dealing in capital market products that are securities, units in a collective investment scheme or securities-based derivatives contracts (“Licensees”). [MAS Notice SFA 04-N04 (Amendment) 2021] 1.3 This Notice does not apply to the lending of S$ to individuals and non￾financial institutions (including corporate treasury centres). 1.4 This Notice does not permit Licensees to engage in financial services beyond the scope of their licences or in contravention of the Act or other MAS Notices, Directions or Guidelines. [MAS Notice SFA 04-N04 (Amendment) 2021] 2 Definition 2.1 In this Notice: “Entities” include legal entities, partnerships/firms and other forms of business vehicles; [MAS Notice SFA 04-N04 (Amendment) 2021]

Notice on Lending of Singapore Dollar to Non-Resident Financial Institutions for Holders of Capital Markets Services Licence 2 “Financial institutions” means entities whose main business is in financial services, including one or more of the following: (a) banking; (b) merchant banking; (c) investment banking; (d) financing; (e) insurance; (f) dealing in capital market products; (g) asset / fund management (including hedge funds); (h) money, futures, and prime brokering; (i) other types of financial activity that MAS may designate in writing; [MAS Notice SFA 04-N04 (Amendment) 2021] “Non-residents” means entities which do not fall within the definition of a resident; [MAS Notice SFA 04-N04 (Amendment) 2021] “Residents” means: (a) companies which are at least 50% owned by Singapore citizens; or (b) the following financial institutions in Singapore which are subject to this notice, or MAS Notices 109, 757, 816 or 1105: (i) a bank licensed under the Banking Act (Cap 19); (ii) a merchant bank licensed under the Banking Act; (iii) a finance company licensed under the Finance Companies Act (Cap 108); (iv) a registered insurer (other than a captive insurer) under the Insurance Act (Cap 142); and

Notice on Lending of Singapore Dollar to Non-Resident Financial Institutions for Holders of Capital Markets Services Licence 3 (v) a person holding a capital markets services licence to carry on a business of dealing in capital market products that are securities, units in a collective investment scheme or securities-based derivatives contracts under the Act; and [MAS Notice SFA 04-N04 (Amendment) 2021] “S$ credit facilities” include loans, contingent credit lines and foreign exchange swaps involving a sale of S$ to a non-resident financial institution in the first leg of the transaction. [MAS Notice SFA 04-N04 (Amendment) 2021] 2.2 The expressions used in this Notice, except where expressly defined in this Notice or where the context otherwise requires, have the same meanings as in the Act. [MAS Notice SFA 04-N04 (Amendment) 2021] 3 S$ Credit Facilities 3.1 A Licensee may lend S$ to non-resident financial institutions for any purpose whether in Singapore or elsewhere as long as the aggregate S$ credit facilities do not exceed S$5 million per entity1 . 3.2 Where a Licensee lends S$ to a non-resident financial institution for any purpose whether in Singapore or elsewhere and the aggregate S$ credit facilities exceed S$5 million for that non-resident financial institution, a Licensee must comply with all of the following conditions: [MAS Notice SFA 04-N04 (Amendment) 2021] (a) Where the S$ proceeds are to be used outside Singapore, the Licensee must ensure that the S$ proceeds are swapped or converted into foreign currency upon draw-down; [MAS Notice SFA 04-N04 (Amendment) 2021] 1 For financial institutions seeking to obtain S$ credit facilities, each subsidiary is considered a separate entity while the head office and all overseas branches are collectively regarded as one entity. [MAS Notice SFA 04-N04 (Amendment) 2021]

Notice on Lending of Singapore Dollar to Non-Resident Financial Institutions for Holders of Capital Markets Services Licence 4 (b) Notwithstanding paragraph 3.2(a), the Licensee must not extend S$ credit facilities to non-resident financial institutions if there is reason to believe that the S$ proceeds may be used for S$ currency speculation. [MAS Notice SFA 04-N04 (Amendment) 2021] 3.3 A Licensee must report to MAS, monthly, its aggregate outstanding S$ lending to non-resident financial institutions in the format in Appendix 1. Where a Licensee does not have any aggregate outstanding S$ lending to non￾resident financial institutions for a particular month, the Licensee must submit a nil return for that month. A Licensee must submit all of the information required in Appendix 1 to the Monetary Management Division of MAS no later than 10 working days after the reporting month. A Licensee must keep documentary evidence supporting these S$ credit facilities for audit and inspection purposes. [MAS Notice SFA 04-N04 (Amendment) 2021] 4 S$ Equity and Bond Issuance 4.1 A Licensee may arrange S$ equity or bond issues for non-resident financial institutions. If the S$ proceeds are to be used outside Singapore, they must be swapped or converted into foreign currency before remitting abroad. [MAS Notice SFA 04-N04 (Amendment) 2021] 5 Consultation Procedure 5.1 Should a Licensee need to consult MAS, it may write to: [MAS Notice SFA 04-N04 (Amendment) 2021] Monetary Management Division, MAS 10 Shenton Way, MAS Building 26th Floor Singapore 079117 Fax: 62299491 Email: sgddiv@mas.gov.sg

• Endnotes on History of Amendments

Notice on Lending of Singapore Dollar to Non-Resident Financial Institutions for Holders of Capital Markets Services Licence 5

1. MAS Notice SFA 04-N04 (Amendment) 2018 with effect from 8 October 2018.
2. MAS Notice SFA 04-N04 (Amendment) 2021 dated 28 June 2021 with effect from 1 July 2021.

Notice on Lending of Singapore Dollar to Non-Resident Financial Institutions for Holders of Capital Markets Services Licence 6 APPENDIX 1 OUTSTANDING S$ CREDIT FACILITY (To be submitted online) AS AT END OF (month) Name of Capital Markets Services Licence Holder____________________ Officer-in-charge ____________________ (Tel) ____________________ S$ CREDIT FACILITIES Non-Resident Financial Institution Outstanding Amount (S$’m) In Singapore Outside Singapore Total