TITLE: Singapore's Monetary Authority Updates Minimum Liquid Assets and Liquidity Coverage Ratio Requirements
BODY:
On May 28, 2026, the Monetary Authority of Singapore (MAS) issued Notice FHC-N649, updating minimum liquid assets (MLA) and liquidity coverage ratio (LCR) requirements for financial holding companies (FHCs). The notice applies to all FHCs that have a subsidiary that is a bank incorporated in Singapore and are predominantly banking designated financial holding companies (predominantly banking DFHCs).
The updated notice establishes MLA and LCR requirements that predominantly banking DFHCs must comply with to manage liquidity risk effectively. MLA requirements ensure that FHCs maintain sufficient liquid assets to meet their obligations, while LCR requirements establish a ratio of high-quality liquid assets to total net cash outflows over a 30-day stress scenario. These requirements are issued under sections 34(1) and 38(2) of the Financial Holding Companies Act 2013 (FHCA 2013).
The notice also addresses reporting obligations for specified predominantly banking DFHCs, requiring disclosure of information relating to their net stable funding ratio (NSFR), LCR, and internal liquidity risk measurement and management frameworks. Additionally, the update includes risk-based capital adequacy requirements for FHCs with banking subsidiaries incorporated in Singapore.
The updated notice takes effect on September 1, 2026. Accompanying the notice are revised reporting forms: Form 1 (Assets and Liabilities by Currency and Top Depositors) and Form 2 (LCR, MLA, Cashflows and Available Unencumbered Liquid Assets), both effective September 1, 2026. Predominantly banking DFHCs must ensure compliance with the new requirements by the effective date and submit required disclosures using the updated forms.
REFERENCES:
MAS Notice FHC-N649 on Minimum Liquid Assets and Liquidity Coverage Ratio (dated May 28, 2026, effective September 1, 2026): https://www.mas.gov.sg/