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pc nid 92837 May 29, 2026 pthandapani@vixio.com Singapore Monetary Authority of Singapore financial services
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Singapore's Monetary Authority Updates Minimum Liquid Assets and Liquidity Coverage Ratio Requirements

On May 28, 2026, the Monetary Authority of Singapore (MAS) issued amendments to Notice 649, which sets out minimum liquid assets (MLA) and liquidity coverage ratio (LCR) requirements for banks operating in Singapore. The amendments take effect on September 1, 2026. Notice 649 applies to all banks in Singapore, including full banks that are locally incorporated or branches, and wholesale banks that are locally incorporated or branches. The notice establishes mandatory liquidity risk management standards pursuant to sections 38(1) and 65(2) of the Banking Act 1970. The MLA and LCR requirements ensure that banks maintain sufficient liquid assets to meet their obligations during stressed market conditions and to manage their liquidity risk effectively. The May 28, 2026 amendments include updates to MAS Notice 649 (Amendment) 2026 and MAS Notice 649 Form 2 (Amendment) 2026. These amendments supersede the previous version effective July 1, 2024. Banks must comply with the updated requirements by the September 1, 2026 effective date. The notice requires banks to submit liquidity information using specified forms, including Form 2, which captures LCR, MLA, cashflows, and available unencumbered liquid assets data. The requirements align with international liquidity standards and support MAS's regulatory framework for managing systemic liquidity risk in Singapore's banking sector. Banks should review the amended notice and forms to ensure compliance with the new requirements by the effective date. **References:** - MAS Notice 649 (Amendment) 2026 - MAS Notice 649 Form 2 (Amendment) 2026 - Banking Act 1970

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Monetary Authority of Singapore Updates Minimum Liquid Assets and Liquidity Coverage Ratio Requirements

The Monetary Authority of Singapore (MAS) has released MAS Notice 649 (Amendment) 2026, which revises the regulatory requirements for Minimum Liquid Assets (MLA) and the Liquidity Coverage Ratio (LCR) for reporting banks. The amendments prescribe: Group-level MLA requirements mandating that specific reporting banks—those incorporated in Singapore and not subsidiaries of foreign banks or foreign holding companies—comply with the all-currency and Singapore Dollar MLA requirements on a consolidated (Group) level, which consolidates the assets and liabilities of all its banking group entities, excluding insurance subsidiaries. Expanded scope of eligible liquid assets updating the definitions of Tier-1 and Tier-2 Liquid Assets to include assets held by a banking group entity to meet statutory liquidity requirements, provided the surplus is freely available to the banking group in times of stress. The amendments also introduce a grandfathering clause allowing certain debt securities or sukuk issued by a financial institution and acquired before May 28, 2026, to be treated as liquid assets until August 31, 2031, and permit recognizing specific foreign sovereign or central bank debt as Tier-1 Liquid Assets (instead of Tier-2) up to a 16% limit. Qualifying liabilities refinement stipulating that a reporting bank may compute liabilities due to a foreign central bank on a net basis by deducting specific claims maturing within one month, provided the resulting net asset amount is only deducted from the qualifying liabilities attributable to the relevant branch or subsidiary in that jurisdiction. HQLA operational and eligibility updates expanding the eligibility of ordinary shares as Level 2B High Quality Liquid Assets (HQLA) to include those that are constituents of an index in a foreign jurisdiction whose domestic currency is both a global reserve currency and a significant currency of the reporting bank. Additionally, the operational requirements mandate that if a reporting bank hedges the market risk of a liquid asset, it must subtract the early close-out cash outflow of the hedge from the asset's market value when computing its LCR. The amendments will take effect on September 1, 2026.