The mission of the Monetary Authority of Singapore (MAS) is to promote sustained and non-inflationary economic growth, and a sound and progressive financial services sector.

To carry out this mission, MAS conducts exchange rate policy, manages the official foreign reserves, regulates and supervises the financial sector, and works with the industry to develop Singapore as an international financial centre.

The supervisory aspect of MAS’ mandate is described in the 24-page monograph, “Objectives and Principles of Financial Sector Oversight in Singapore”.

Confidence and stability are fundamental to a well-functioning financial system. However, experience has shown that, left to themselves, financial systems and institutions can be prone to bouts of instability and loss of confidence.

MAS is concerned with both the stability of the financial system as a whole and the soundness of individual institutions. Working with other stakeholders, principally the boards and managers of financial institutions (FIs), MAS encourages the effective management and mitigation of risks taken by these institutions.

Fulfilling our mission of a sound and progressive financial services sector requires achieving six distinct objectives.

Objective 1: Stable financial system

Stability is fundamental to a well-functioning financial system. It provides the basis for participants to transact in the financial markets and use the services of FIs with confidence.

 

Promoting a stable system is thus the overarching objective of MAS’ financial supervision. It requires MAS to meet the other five objectives with respect to intermediaries, infrastructure, markets, offerors and consumers.



Objective 2: Safe and sound financial intermediaries

The focus of much of MAS’ regulation and supervision is on the safety and soundness of financial intermediaries because

  • the distress or collapse of large FIs can have potentially damaging consequences for financial stability

  • most consumers are usually not in a position to make fully informed judgments about risks facing FIs

Therefore, MAS actively encourages FIs to identify, monitor and mitigate the risks facing them. For key FIs, this extends to the development and ongoing review of robust and credible recovery and resolution plans.

MAS also requires institutions to have robust systems and procedures to combat money laundering and terrorism financing. MAS seeks to detect, deter and prevent abuses that pose significant legal and reputational risks to the institutions which could: 

  • impact their safety and soundness; 

  • affect Singapore’s standing as an international financial centre. 

Objective 3: Safe and efficient financial infrastructure

Financial infrastructure refers to platforms that provide the services and facilities underpinning financial market activities, such as exchanges and clearing houses. Their failure may amplify systemic risks by seizing up financial flows and transmitting shocks from one institution to another.

Thus the safe operation of financial infrastructure is essential for preserving financial stability. Financial infrastructure should also be efficient in helping to maximise the economic benefits of financial intermediation.

Objective 4: Fair, efficient and transparent organised markets
Confidence in the financial system and effective intermediation of financial flows require that capital markets be fair, efficient and transparent.

A fair market is characterised by proper trading practices, fair access to market facilities and information, and structures that do not tilt the playing field in favour of some market users over others.

Price formation and discovery are intrinsic to any well-functioning market that matches buyers and sellers. An efficient market is one where this process is reliable and unhindered.


Objective 5: Transparent and fair-dealing intermediaries and offerors

To promote transparency and fair-dealing by FIs and offerors, MAS
  • prescribes disclosure requirements; 
  • conducts fit and proper tests to promote honesty and integrity among FIs and their representatives
  • sets competency requirements for those providing financial services in capital markets; 
  • instils fair business practices in the marketing and distribution of financial services and products. 
MAS penalises, through criminal and civil sanctions, instances of market misconduct.

Objective 6: Well-informed and empowered consumers

Consumers need to be well-informed and empowered to assume principal responsibility for protecting their own interests.

MAS works with other agencies and industry associations to equip consumers with basic money management, financial planning and investment skills. MAS also facilitates the setting up of fair, efficient and affordable industry dispute resolution mechanisms as alternatives to court litigation.

However, MAS does not and cannot protect consumers from the risk that their investments will not deliver anticipated returns.


Summary

A sound and progressive financial services sector is a vital part of any modern economy, particularly for a small and open economy like Singapore.

To achieve this mission, MAS has six distinct objectives for its financial sector oversight:
  • a stable financial system
  • safe and sound financial intermediaries
  • safe and efficient financial infrastructure
  • fair, efficient and transparent organised markets
  • transparent and fair-dealing intermediaries and offerors; and
  • well-informed and empowered consumers

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