MAS to implement amendments to regulatory framework for large exposures of Singapore-incorporated merchant banks and Singapore-incorporated banks

29 June 2026

On 22 May 2026, the Monetary Authority of Singapore (“MAS”) issued MAS Notice 1012 on Exposures to Single Counterparty Groups for Merchant Banks Incorporated in Singapore (“Notice 1012”) and an amended MAS Notice 656 on Exposures to Single Counterparty Groups for Banks Incorporated in Singapore (“Notice 656”).

The new Notice 1012 will take effect from 1 June 2027. The current Notice 1012 on Credit Facilities to a Counterparty or Group of Counterparties, dated 11 June 2021, will be cancelled effect from 1 June 2027. The amended MAS Notice 656 will take effect from 1 July 2026.

Notice 1012 introduces an updated regulatory framework for measuring and controlling large exposures of merchant banks. The amendments set out a limit for exposures to any counterparty or group of counterparties and aims to ensure that concentration risk in merchant banks is adequately measured and controlled.

The amended Notice 656 refines the scope of exposures to related corporations that are holding companies, banks, and merchant banks which are currently excluded from the large exposures limit, to more adequately address contagion risk arising from exposures to related counterparties which are not subject to minimum prudential standards, while taking into consideration the operating structures of Singapore-incorporated banks.

Background

MAS sought feedback on a version of the amendments in a consultation paper published on 15 July 2025. On 22 May 2026, MAS published its response to the feedback received.

Reference materials

The following materials are available on the MAS website www.mas.gov.sg: