18. Regulation 23G of the Banking Regulations is deleted and the following regulations substituted therefor:“Prescribed related or complementary business |
23G.—(1) For the purposes of section 30(1)(d) of the Act and subject to paragraphs (2) to (6), the following businesses are prescribed as businesses that any bank in Singapore may carry on, or enter into any partnership, joint venture or other arrangement with any person to carry on:(a) | any business of operating an online location where consumer goods or services are sold to consumers by persons other than the bank; | (b) | any business of selling consumer goods or services on an online location; | (c) | any business of buying, selling or trading any commodity; | (d) | any business of providing financing under an Islamic financing arrangement endorsed by any Shari’ah council or body, or by any committee formed for the purpose of providing guidance on compliance with Shari’ah law; | (e) | any business of providing sales services (including customer prospecting, customer engagement and after‑sales services), marketing services or administrative services to any regulated financial institution which is a related corporation of the bank; | (f) | any business of providing advice on the social impact or environmental impact of a person’s investments or activities; | (g) | any business of selling software (including accounting software and risk analytics software) originally developed or commissioned by the bank for a core financial business of the bank; | (h) | any business of referring potential buyers to a seller of goods or services, where the bank is not involved in the supply of goods or services; | (i) | any business of leasing any building or part of a building; | (j) | any business which is incidental to a business mentioned in sub‑paragraphs (a) to (i). |
(2) A bank in Singapore may carry on any business prescribed in paragraph (1) only if —(a) | the business is related or complementary to a core financial business of the bank; | (b) | the bank puts in place risk management and governance policies and procedures that are commensurate with the risks posed by the business; | (c) | the policies and procedures mentioned in sub‑paragraph (b) have been approved by —(i) | in the case of a bank incorporated in Singapore — the board of directors of the bank; | (ii) | in the case of the branches and offices located within Singapore of a bank incorporated outside Singapore, the head office of which has never carried on a materially similar business before — the board of directors of the bank; or | (iii) | in the case of the branches and offices located within Singapore of a bank incorporated outside Singapore, the head office of which has carried on or is carrying on a materially similar business — by an authorised person of the bank; |
| (d) | the bank notifies the Authority, in accordance with paragraph (3), of the following matters:(i) | a description of the business; | (ii) | any regulation or licensing requirement that the business is or will be subject to, whether in Singapore or elsewhere; | (iii) | the nature of the bank’s investment in the business and the amount of such investment; | (iv) | the date on which the bank intends to start carrying on the business; | (v) | any partnership, joint venture or other arrangement into which the bank has entered to carry on the business; |
| (e) | the bank notifies the Authority of any change to the matters in relation to which information had been provided in the notification mentioned in sub‑paragraph (d), before making the change or as soon as the bank becomes aware of the change; | (f) | the bank obtains prior approval from the Authority for the issuance of any guarantee, indemnity, letter of comfort or any other letter that imposes similar obligations on the bank as a guarantee or indemnity, or similar expectations on the bank as a letter of comfort, in respect of the business; and | (g) | in the case of a bank that enters into any partnership, joint venture or other arrangement with a related corporation of the bank to carry on a business prescribed in paragraph (1), the related corporation of the bank does not use the bank’s name, logo or trade mark in the course of the business. |
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(3) The notification under paragraph (2)(d) must be submitted at least 14 days before the earliest of the following:(a) | any public announcement that the bank intends to carry on, or enter into any partnership, joint venture or other arrangement with any person to carry on, the business; | (b) | the entry of the bank into any partnership, joint venture or arrangement with any person to carry on the business; | (c) | the date on which the bank starts carrying on the business, or the date on which any partnership, joint venture or other arrangement entered into by the bank to carry on the business comes into effect. |
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(4) In addition to the conditions in paragraph (2), a bank in Singapore may carry on any business under paragraph (1) only if its aggregate non‑financial business size does not exceed —(a) | in the case of a bank incorporated in Singapore —(i) | 10% of its capital funds; and | (ii) | 10% of the capital funds of its bank group; or |
| (b) | in the case of the branches and offices located within Singapore of a bank incorporated outside Singapore — 1.5% of the assets that are reflected as assets in the balance sheet of those branches and offices (less net inter‑bank lending). |
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(5) A bank in Singapore must —(a) | submit a report to the Authority within 30 days after the end of every quarter or any other time as may be approved in writing by the Authority, containing the information specified in the Second Schedule; and | (b) | provide any other information that the Authority may require in relation to any business prescribed in paragraph (1) that is carried on by the bank. |
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(6) A bank in Singapore that carries on any business prescribed in paragraph (1) must comply with any other conditions or restrictions that the Authority may impose, from time to time, by written notice in relation to its carrying on of such business. |
(7) In this regulation, unless the context otherwise requires —“aggregate non‑financial business size”, in relation to a bank in Singapore, means the total balance sheet asset value or total exposures (whichever is higher), or any other measure that the Authority may specify by written notice, of —(a) | all businesses prescribed in paragraph (1) carried on by the bank; | (b) | all businesses prescribed in regulation 23I(1) carried on by the bank; | (c) | all businesses carried on by any major stake entity of the bank that is acquired or held by the bank in accordance with regulation 7B; | (d) | all businesses prescribed in paragraph (1) carried on by any major stake entity of the bank, where —(i) | the bank has obtained the prior approval of the Authority under section 32 of the Act to acquire or hold a major stake in the entity; and | (ii) | the approval under sub‑paragraph (i) is subject to conditions that include the bank having to treat the balance sheet asset value or exposures (whichever is higher) of such businesses as part of its aggregate non‑financial business size; |
| (e) | all businesses for which the Authority has granted approval to the bank under section 30(1)(e) of the Act and the approval is subject to conditions that include the bank having to treat the balance sheet asset value or exposures (whichever is higher) of such businesses as part of its aggregate non‑financial business size; and | (f) | all businesses carried on by any major stake entity of the bank, other than a business mentioned in section 30(1)(a), (b), (c) or (d) of the Act, where —(i) | the bank has obtained the approval of the Authority under section 32 of the Act to acquire or hold a major stake in the entity; and | (ii) | the approval under sub‑paragraph (i) is subject to conditions that include the bank having to treat the balance sheet asset value or exposures (whichever is higher) of such businesses as part of its aggregate non‑financial business size; |
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“authorised person”, in relation to the branches and offices located within Singapore of a bank incorporated outside Singapore, means one or more persons, or a committee of persons, authorised by the board of directors of the bank to approve the risk management and governance policies and procedures of the business carried on by those branches and offices; |
“capital funds” means —(a) | in relation to a bank incorporated in Singapore — the capital of the bank that is used for the purposes of calculating its capital adequacy requirements under section 10 of the Act; or | (b) | in relation to the bank group of a bank incorporated in Singapore — the capital of the bank group that is used for the purposes of calculating the bank group’s capital adequacy requirements under section 10 of the Act; |
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“commodity” has the meaning given by section 2(1) of the Securities and Futures Act; |
“consumer goods or services” means goods or services which are ordinarily supplied for private use or consumption; |
“core financial business”, in relation to a bank, means a core business activity that the bank carries out based on its particular business model which is either —(a) | a business mentioned in section 30(1)(a), (b) or (c) of the Act; or | (b) | a business prescribed under section 30(1)(d) of the Act that is similar to any of the businesses mentioned in section 30(1)(a), (b) and (c) of the Act in terms of economic substance and risk; |
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“net inter‑bank lending”, in relation to the branches and offices located within Singapore of a bank incorporated outside Singapore, means the total lending by those branches and offices to —(a) | other branches and offices located outside Singapore of the bank incorporated outside Singapore; and | (b) | other banks and merchant banks, |
less the total borrowing by those branches and offices from — |
(c) | other branches and offices of the bank located outside Singapore; and | (d) | other banks and merchant banks; |
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“quarter” means a period of 3 months beginning on 1 January, 1 April, 1 July or 1 October of any year. |
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Prescribed related or complementary business that is non‑revenue generating, etc. |
23H.—(1) For the purposes of section 30(1)(d) and subject to paragraph (2), any business that is related or complementary to a core financial business of a bank in Singapore is prescribed as a business that the bank may carry on, or enter into any partnership, joint venture or other arrangement with any person to carry on, if —(a) | the business is one from which the bank in Singapore does not receive or intend to receive any revenue; | (b) | the business is one that has no asset value recorded on the balance sheet of the bank in Singapore; and | (c) | the business is one that does not result in any exposure for the bank in Singapore. |
(2) A bank in Singapore that carries on any business prescribed in paragraph (1) must comply with any other conditions or restrictions that the Authority may impose, from time to time, by written notice in relation to its carrying on of such business. |
(3) In this regulation, “core financial business” has the meaning given by regulation 23G(7). |
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Saving provision for businesses carried on before 1 July 2021 |
23I.—(1) For the purposes of section 30(1)(d) of the Act and subject to paragraphs (2) to (5), any business prescribed by regulation 23G(1) in force immediately before 1 July 2021, and carried on immediately before that date —(a) | by a bank in Singapore; or | (b) | by a partnership, joint venture or other arrangement that a bank in Singapore has entered into with another person, |
is prescribed as a business that that bank may — |
(c) | carry on; or | (d) | enter into a partnership, joint venture or other arrangement with another person to carry on. |
(2) A bank in Singapore may carry on any business prescribed in paragraph (1) only if —(a) | the business is related or complementary to any of the core financial business which is carried on by the bank; | (b) | the bank puts in place risk management and governance policies and procedures that are commensurate with the risks posed by the business; | (c) | the policies and procedures mentioned in sub‑paragraph (b) have been approved by —(i) | in the case of a bank incorporated in Singapore — the board of directors of the bank; | (ii) | in the case of the branches and offices located within Singapore of a bank incorporated outside Singapore, the head office of which has never carried on a materially similar business before — the board of directors of the bank; or | (iii) | in the case of the branches and offices located within Singapore of a bank incorporated outside Singapore, the head office of which has carried on or is carrying on a materially similar business — by an authorised person of the bank; |
| (d) | the bank notifies the Authority of any change to the business or the partnership, joint venture or arrangement under which the bank carries on the business, before making the change; | (e) | the bank obtains prior approval from the Authority for the issuance of any guarantee, indemnity, letter of comfort or any other letter that imposes similar obligations on the bank as a guarantee or indemnity, or similar expectations on the bank as a letter of comfort, in respect of the business; and | (f) | in the case of a bank that enters into any partnership, joint venture or other arrangement with a related corporation of the bank to carry on a business prescribed in paragraph (1), the related corporation of the bank does not use the bank’s name, logo or trade mark in the course of the business. |
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(3) A bank in Singapore may carry on any business under paragraph (1) only if its aggregate non‑financial business size does not exceed —(a) | in the case of a bank incorporated in Singapore —(i) | 10% of its capital funds; and | (ii) | 10% of the capital funds of its bank group; or |
| (b) | in the case of the branches and offices located within Singapore of a bank incorporated outside Singapore — 1.5% of the assets that are reflected as assets in the balance sheet of those branches and offices (less net inter‑bank lending). |
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(4) A bank in Singapore that carries on any business prescribed in paragraph (1) must —(a) | submit a report to the Authority within 30 days after the end of every quarter or any other time as may be approved in writing by the Authority, containing the information specified in the Second Schedule; and | (b) | provide any other information that the Authority may require in relation to any business prescribed in paragraph (1) that is carried on by the bank. |
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(5) A bank in Singapore that carries on any business prescribed in paragraph (1) must comply with any other conditions or restrictions that the Authority may impose, from time to time, by written notice in relation to its carrying on of such business. |
(6) In this regulation, “aggregate non-financial business size”, “authorised person”, “capital funds”, “net inter‑bank lending” and “quarter” have the meanings given by regulation 23G(7).”. |
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