Content Gen Dashboard

On May 22, 2026, the Monetary Authority of Singapore (MAS) issued an amendment to Notice 656, which sets out rules for measuring and limiting locally-incorporated banks' exposures to single counterparty groups. The amendment takes effect on July 1, 2026. Notice 656 applies to all full banks and wholesale banks incorporated in Singapore. It establishes limits on exposures to a single counterparty group and specifies which types of exposures must be included in or excluded from those limits. The notice also sets out the basis for computing exposures, eligible credit risk mitigation techniques, and the approach for aggregating exposures across counterparty groups. The May 2026 amendment represents the latest in a series of updates to the framework. Previous amendments were issued on May 3, 2024, June 14, 2021, September 21, 2020, and December 13, 2019. The regulatory framework was originally developed to align with the "Supervisory framework for measuring and controlling large exposures" published by the Basel Committee on Banking Supervision. MAS conducted a public consultation on proposed revisions between January 3, 2018 and February 12, 2018, publishing its response on August 31, 2018. Locally-incorporated banks must ensure compliance with the updated exposure limits and computation methodologies outlined in the amended notice. The framework is issued pursuant to sections 29(1) and 65(2) of the Banking Act (Cap. 19). Banks should review the amended notice and implement any necessary changes to their exposure measurement and reporting processes ahead of the July 1, 2026 effective date. A reporting template is available to support compliance with the notice's requirements.

The Monetary Authority of Singapore (MAS) has released the MAS Notice 656 (Amendment) 2026, which modifies the existing framework regarding the exposures of locally incorporated banks to single counterparty groups. The amendment notice prescribes: Exempt exposures to MDBs adding a new exemption for exposures to qualifying multilateral development banks (MDBs), thus excluding them from the calculation of the large exposures limit. Refined scope for related corporations amending the criteria for exempt exposures to related corporations, specifically narrowing the exemption for exposures to parent financial holding companies to those that are banks or are part of a group subject to equivalent minimum prudential standards and supervision. The amendment also refines the exemption for exposures to subsidiaries, limiting it to subsidiaries that are banks, merchant banks in Singapore, or foreign securities firms/financial institutions subject to equivalent prudential standards, provided the residual maturity does not exceed one year. Furthermore, it updates the rules for exposures to subsidiaries of the bank's holding company, ensuring they meet similar stringent criteria. Updated definitions and clearing activities introducing a new definition for "CCP trade exposures" and updating the treatment of exposures related to clearing activities in Table C-2, clarifying that the exposure value for CCP trade exposures (excluding initial margin) is calculated using the prescribed exposure measurement approaches. Clarifications on subsidiary funds and covered bonds clarifying that exposures of a subsidiary arising from assets held in the subsidiary's funds for the benefit of a third party are excluded from the Group level exposure aggregate, and refining the definition of a "cover pool" for covered bonds to emphasize its purpose in securing liabilities to bondholders, enforcement rights, and third-party service providers. The amendments will take effect on July 1, 2026.

meta_id 3176432

Generated

Singapore's Monetary Authority Updates Large Exposures Framework for Locally-Incorporated Banks

Agent draft

Published

Monetary Authority of Singapore Updates Large Exposures Framework for Locally-Incorporated Banks