SINGAPORE Law and Practice Contributed by: Kenneth Pereire and Lin YingXin, KGP Legal LLC
the Moneylenders Act 2008, who would not be required to obtain a licence or an exemption for carrying on the business of moneylending in Sin - gapore. 4.2 Underwriting Processes Each financial institution adheres to its unique underwriting process, although there is a gen - eral conformity 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 assess - ment criteria which they create internally. This process consists of evaluating their customers against their own standards of pricing, collater - al, facility structures, covenants and conditions. Furthermore, these institutions will review their predictions of a customer’s financial growth and assumptions on the future of the industry to sup - port their credit evaluation process. It is to be noted that there is no specific regula - tion stipulating these processes. However, MAS proactively ensures regulatory oversight through thematic inspections on various banks. These inspections serve to assess the institutions’ standards and practices, 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 from the MAS. P2P Lending Platforms raising funds from individual or insti - tutional investors must comply with the SFA if loans are structured as debt securities, and the Moneylenders Act 2008 for personal loans. They
must also obtain a licence under the PSA and follow AML/CFT regulations. Lender-Raised Capital If funds are raised through issuing shares or bonds, they are subject to the SFA for disclosure and licensing. Lenders may need a CMS licence from MAS, depending on their lending activity. Taking Deposits Financial institutions accepting public deposits must be licensed under the Banking Act 1970 and are supervised by MAS. They are also sub - ject to deposit protection under the Deposit Insurance Act 2005. Securitisation This involves pooling assets into marketable securities. It is regulated under the SFA, with strict disclosure, 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 compliance. 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 appoint - ed as “Bookrunners” by MAS for bond distri - bution;
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