Regulatory Alerts2004-05-28
Added
RMD 26/2004: MAS Notice 1105 Lending of Singapore Dollar to Non-Resident Financial Institutions
The Monetary Authority of Singapore revised MAS Notice 1105 to liberalize policies governing the lending of Singapore Dollars to non-resident financial institutions. The updated regulations exempt non-resident non-financial issuers from swapping SGD proceeds and waive temporary overdrafts on vostro accounts to facilitate efficient payments. Additionally, the authority renamed the policy to accurately reflect its focus on lending safeguards rather than the previous concept of non-internationalization.
Circulars
Published Date: 28 May 2004
RMD 26/2004: MAS Notice 1105 Lending of Singapore Dollar to Non-Resident Financial Institutions
Outlines MAS’ policy review of MAS Notice 1105 in May 2004.
SGD FX and Interest Rates
Applies to:
Merchant Bank (Branch)
,
Merchant Bank (Locally Incorporated)
To : All Merchant Banks in Singapore
Dear Sir/Madam
MAS NOTICE 1105 - LENDING OF SINGAPORE DOLLAR TO NON-RESIDENT FINANCIAL INSTITUTIONS
Since 1998, MAS has progressively liberalised our policy on the non-internationalisation of the Singapore Dollar ("S$") to facilitate the development of Singapore's capital markets. Following the last revision of the policy in March 2002, MAS has recently completed another review of the policy and refined it further, as follows:-
(a) Non-resident non-financial issuers of S$ bonds and equities will no longer be required to swap or convert their S$ proceeds into foreign currencies before remitting abroad. This would allow the issuers greater flexibility in managing their S$ funds; and
(b) Temporary overdrafts of S$ vostro accounts extended to prevent settlement failures will be exempted from the policy. This would facilitate straight-through processing and more efficient handling of S$ payments.
2 Over the years, the policy has been distilled to the basic safeguards against borrowing by non-resident financial institutions for speculating in the S$. The present name of the policy, "Non-Internationalisation of the S$", has become a misnomer. MAS has therefore decided to rename the policy "Lending of S$ to Non-Resident Financial Institutions".
3 A copy of the revised MAS Notice 1105 (12.3 KB) and a list of frequently asked questions (70.9 KB) about the Notice are enclosed. If you have any enquiries, please direct them to the Monetary Management Division, MAS at telephone number 62299150 or facsimile number 62299491.
Yours faithfully
(Transmitted via MASNET)
MS JACQUELINE LOH EXECUTIVE DIRECTOR RESERVE & MONETARY MANAGEMENT DEPARTMENT
Governs the lending of SGD by merchant banks to non-resident financial institutions, including requirements for submitting monthly returns.
Provides clarifications to some frequently asked questions on MAS Notice 757 and equivalent notices.