SINGAPORE Law and Practice Contributed by: Kenneth Pereire and Lin YingXin, KGP Legal LLC
Taking Deposits Financial institutions accepting public deposits must be licensed under the Banking Act 1970 and are supervised by MAS. They are also subject to deposit protection under the Deposit Insurance Act 2005. Securitisation This involves pooling assets into marketable securi - ties. It is regulated under the SFA, with strict disclo - sure, AML/KYC, and tax compliance requirements. Each of these sources requires compliance with MAS regulations, AML/CFT laws, and consumer protection measures to ensure financial stability and legal com - pliance. 4.4 Syndication of Fiat Currency Loans Syndication of fiat currency loans does take place in Singapore, particularly in the context of corporate financing and government bonds. A notable example of the syndication process is that of SGS bonds. They are conducted through a series of events: • annually, a calendar outlines upcoming syndicated issuances of SGS bonds for the upcoming year; • a week before pricing day, banks are appointed as “Bookrunners” by MAS for bond distribution; • on pricing day, MAS launches the syndicated issu - ance, with Bookrunners offering bonds to institu - tional investors through a book-building process. Pricing details are published on the MAS website by the end of the day; • Public Offer opens one business day after pricing, lasting a determined period. MAS can adjust the aggregate principal amount of bonds during this time; • one to two business days post Public Offer clo - sure, MAS publishes syndication results, detailing applications, allotted amounts, and an overview of allocations for Placement Tranche and Public Offer; and • bonds are then issued to individual and institutional investors, including those outside Singapore. Syndicated lending is regulated by MAS. Comprehen - sive regulations can be found on the MAS website and banks need to follow these requirements to obtain a licence from MAS to carry out syndication of loans.
a licence or an exemption for carrying on the business of moneylending in Singapore. 4.2 Underwriting Processes Each financial institution adheres to its unique under - writing process, although there is a general conform - ity to a standardised framework and strategy within the industry itself. Participants in the financial sector engage in a meticulous credit evaluation procedure, wherein they analyse their specific target customers, using risk assessment criteria which they create inter - nally. This process consists of evaluating their custom - ers against their own standards of pricing, collateral, facility structures, covenants and conditions. Further - more, these institutions will review their predictions of a customer’s financial growth and assumptions on the future of the industry to support their credit evaluation process. It is to be noted that there is no specific regulation stipulating these processes. However, MAS proac - tively ensures regulatory oversight through thematic inspections on various banks. These inspections serve to assess the institutions’ standards and prac - tices, identifying areas for improvement and upholding the integrity of the overall underwriting processes. 4.3 Sources of Funds for Fiat Currency Loans In Singapore, there are several sources of fiat currency funds for loans, each governed by strict regulations Platforms raising funds from individual or institutional investors must comply with the SFA if loans are struc - tured as debt securities, and the Moneylenders Act 2008 for personal loans. Such platforms must also comply with applicable AML/CFT obligations and investor protection requirements. Lender-Raised Capital If funds are raised through issuing bonds, they are subject to the SFA for disclosure and licensing. Lend - ers may need a CMS licence from MAS, depending on their lending activity. from the MAS. P2P Lending
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