MAS | Financial Regulator Of Singapore

Description and functions of MAS

The Monetary Authority of Singapore (MAS) is the central bank that also acts as a financial regulator and is responsible for the country’s monetary policies and currency reserves. MAS’ regulatory functions consist of issuing several license types and controlling all economic sectors, including cryptocurrencies. The regulator’s powers and resources are practically unlimited.

MAS’ mission and objectives in the Forex market

• Fulfill classic functions of a central bank, including the provision of services to the government;

• Perform complete oversight of all market participants, such as commercial banks and brokers; trust, investment, and insurance companies; exchanges and digital platforms, etc;

• Investigate reports of misconduct, regulatory breaches, or suspected fraud, and liquidate “bubbles” and pyramids.

Today, Singapore is number 4 in the global competitiveness ranking. In 2019, Central Banking recognized the Central Bank of Singapore as the best bank in the world. It is largely attributable to the elaborate monetary policy that ensures the stability of the country’s economy and demonstrates the effectiveness of Singapore’s regulatory system.

To obtain a MAS license, a broker needs

Up to $3.2 million registered capital. The amount is set individually.

• A management team with at least 5 years of experience in the financial sector;

• A physical office in Singapore;

• To have at least two Singapore citizens on its board of directors;

• A business plan and a risk management system;

• To meet the criteria that are determined individually by the regulator, depending on the license type and the broker’s plans;

• Employees that meet trustworthiness criteria.

In terms of strictness, MAS is comparable to U.S. regulators. The difference lies in centralization. While the U.S. market is controlled by several regulators that are assisted by private auditors and self-regulatory organizations, MAS fulfills all supervisory functions and uses many control mechanisms in Singapore. Other bodies, such as the Financial Industry Disputes Resolution Centre Ltd (FIDReC) or the Association of Banks in Singapore (ABS), have fewer powers.

Official website and available information

MAS is Singapore’s central bank. That is why, besides a section about regulation, the Authority’s website contains a lot of other information related to the country’s economy and monetary policies.

Overview of the website:

• Upper main menu.

  

  Upper main menu
• Information sections. Media releases and the annual report; latest news; latest publications, and upcoming releases.

  

  MAS Website Sections

  

  MAS Website Sections

  

  MAS Website Sections

• Key functions.

  

  MAS Website Sections

• Related sites. In particular, the financial communication network Masnet.

  

  MAS Website Sections

Structure of the “Regulation” section:

• Regulation. Rules and information about the licensing of Singapore’s economic sectors, such as banking and insurance, capital markets, payment systems, etc.;

• Quick Links. Financial institutions directory, investor alert list, etc.

  

  MAS Website Sections

Traders are interested in the whole “Regulation” section and, particularly, the “Financial Institutions Directory” subsection, where they can find information about MAS-licensed entities and details of their licenses.

How to confirm a broker’s license on the MAS website

As mentioned, alongside information about brokers and regulation, MAS provides a lot of economic and financial content on its website. This complicates searching. If you enter a broker’s name in the search box on the MAS website’s homepage, you will get all publications that mention the broker, as well as search avenues, such as news, media releases, and other pages.

To confirm a broker’s license on the MAS website, do the following:

• 1

  Go to the broker’s website and make sure it holds a MAS license. This information may be in the footer or other sections of the broker’s website, such as “About us” or “Regulation”;

  

  Screenshots from broker’s website

• 2

  Next, you have two options:

  2.1

  Google “check MAS license” and follow the first link;

  

  Confirmation of an MAS License — Via Google search

  The link takes you to the regulator’s search form, where you will need to input the broker’s name or license number.

  

  MAS Website Sections

  2.2

  On the MAS website’s homepage, go to the “Regulation” section and select “Financial Institutions Directory”.

  

  MAS Website Sections

• 3

  Enter the broker’s name and compare the result to the details on the broker’s website.

  

  MAS Website Sections

Note the license type. Brokers need a license of at least the “Capital Markets Services” type.

MAS’ basic requirements for brokers

Basic requirements to obtain a license:

• Full disclosure of required information. The broker must have a physical office in Singapore and at least two Singapore citizens on its management team;

• Maintain registered capital at a level that is set by the regulator upon granting a license. Registered capital requirements depend on the broker’s focus area(s) and risk level;

• Provide information about strategic development plans, investor rights protection, etc.

MAS issues licenses of several types that determine the fields in which brokers are permitted to render services. The regulator’s mandate allows it to not only impose fines, but also initiate disciplinary, administrative, and criminal proceedings in Singapore.

MAS license | Pros and cons

MAS has practically unlimited powers to control brokers and enforce financial laws. Having access to national registers and accounts, the Authority can get any information about brokers. It primarily supervises branch offices of transnational companies, ensuring that they follow the anti-money laundering and counter-terrorism financing rules. In some cases, fines of $3-4 million were imposed on the largest investment banks.

Advantages of trading with a MAS-licensed broker

• The broker is under constant, strict supervision. MAS approaches the regulation of licensees and their interaction with maximum responsibility.

• You can be sure that the broker is reliable and fulfills its obligations.

A license from MAS is deemed to be the most trustworthy in Asia.

Disadvantages of trading with a MAS-licensed broker

Although the Authority accepts reports of misconduct on the part of financial institutions, it does not mediate or adjudicate traders’ disputes with brokers. Instead, MAS advises harmed traders and investors to contact FIDReC.

MAS’ jurisdiction

A MAS license is permission to operate in Singapore. MAS-licensed brokers can render services to residents and non-residents of Singapore if that does not violate the laws of non-residents’ countries. In most cases, U.S. and European brokers open branch offices in Singapore to access the Asian financial market. In a number of Asian countries, MAS is the most reputable regulator.

Submission and consideration of complaints

You cannot file a complaint against a broker directly with MAS, as the regulator does not resolve disputes between financial institutions and their clients. However, MAS requires its licensees to have a procedure for handling client complaints promptly and responding to complainants. Therefore, MAS recommends approaching the broker first. If that does not help, you can lodge a complaint with FIDReC. If the problem remains unresolved, MAS advises contacting the Singapore Mediation Center (SMC) or consulting a lawyer.

If you suspect a broker of fraud, you can notify MAS about it:

• 1

  In the top right corner of the MAS website, go to “Contact Us” and click the “Get Started” button in the “Write to Us” section;

  

  MAS Website Sections

• 2

  Choose “I have an issue with a financial institution” for question 1, “No, I want to report a regulatory breach…” for question 2, and “Yes” for question 3;

  

  MAS Website Sections

• 3

  Read the “Answer” carefully to understand what a trader can expect after filing a report. Then, click “Proceed to make a report” and complete the form.

  

  MAS Website Sections

MAS-licensed brokers | How to check on a broker

This section provides all the information about licenses held by brokers and their branch offices in various countries. Every month, TU analysts look through regulators’ websites and update the information. On TU’s website, you will learn about:

• All valid licenses, their types, and authorized activities;

• Penalties, warnings, and investigations in relation to brokers.

Traders Union values your time!

About the author of this review

Oleg Tkachenko, author and analyst at TU
Oleg Tkachenko has been TU’s financial analyst and economic observer since 2016. During this time, he has prepared more than 100 reviews of financial companies and analytic articles on technical and fundamental analysis, as well as developed over 10 trading systems. Oleg’s motto is to help everyone come all the way from a novice trader to a professional.