MAS publishes revised notices on related party transaction requirements for banks and its response to consultation feedback

29 September 2026

On 4 September 2026, the Monetary Authority of Singapore (“MAS”) published amendments to the following notices issued under the Banking Act 1970, each of which will take effect on 4 September 2027:

  • Notice 643 on Transactions with Related Parties;
  • Notice 643A on Exposures and Credit Facilities to Related Concerns; and
  • Notice 656 on Exposures to Single Counterparty Groups for Banks Incorporated in Singapore

(collectively, “Notices”).

The amendments introduce measures to enhance oversight of related party transactions (“RPTs”), address conflict of interest risks, and align the regulatory framework with international best practices, including the updated Basel Core Principles for Effective Banking Supervision.

MAS issued a consultation paper on 14 October 2025 seeking feedback on draft versions of the Notices. On 4 September 2026, MAS published its response (“Response”), stating that it has considered the feedback received and incorporated them where appropriate. Key changes are discussed below.

Definition of related parties

Extended senior management group and extended director group

MAS proposed to expand the definitions of “senior management group” and “director group” to capture persons who can exert significant influence over the bank’s executive officers or directors, by introducing new groupings called “extended senior management group” (“ESMG”) and “extended director group” (“EDG”). MAS also proposed retaining the existing “senior management group” and “director group”.

Following feedback that the proposed expansion was too broad and subjective, and could pose implementation difficulties, MAS will revise the approach to how banks may comply with the introduction of ESMG and EDG. MAS will only require a person to be included in the ESMG and EDG when (i) MAS is of the opinion that they are in such a position and designates them as such; or (ii) the bank has reasonable grounds, based on credible information it is aware of, to believe that a person is in a position to exert significant influence on the executive officer or director in a way that may affect how that person discharges their bank duties.

The existing “senior management group” and “director group” will be removed from Notice 643 and Notice 643A.

Indirect controller group

MAS proposed a new “indirect controller group” for Singapore-incorporated banks, comprising indirect controllers of the bank together with their family members and affiliates.

In the Response, MAS acknowledged the practical challenges of identifying indirect controllers. MAS will now only require banks to apply RPT requirements to the indirect controller group upon becoming aware of an indirect controller of the bank.

Transactions excluded from RPT governance requirements

MAS proposed to tighten the scope of excluded intragroup transactions so that exclusions only apply to transactions with entities that are part of a bank group, or holding company group that is subject to minimum prudential standards and consolidated supervision by a bank regulatory agency.

In the Response, MAS stated that the exclusion from RPT governance requirements applies to transactions with entities within the bank group, parent bank group, or holding company group, provided the holding company is subject to minimum prudential standards, including risk-based capital standards and liquidity standards, and consolidated supervision by MAS or, in the case of a foreign headquartered bank, an equivalent bank regulatory agency of the home jurisdiction.

MAS also clarified that the tightened scope of intragroup exclusions will apply prospectively and not retrospectively. Ongoing intragroup transactions that currently rely on the existing exclusion will not be subject to the RPT governance requirements until the transaction is renewed by the bank, or its terms and conditions are materially changed.

MAS will, however, require banks to provide a one-time update to their board on all intragroup transactions that have no specified end date, or otherwise have no fixed duration, and that continue to rely on the existing exclusion. This one-time update must be done within six months from the effective date of the Notice amendments.

Limits on exposures from RPTs

MAS will proceed with its proposal to introduce a related party exposure limit framework for Singapore-incorporated banks under Notice 643 (“RPT limit framework”), replacing existing exposure limits on related party groups currently set out within Notice 656. Under the RPT limit framework, MAS will also impose exposure limits on new related party groups that were not previously subject to standalone limits.

Following feedback, MAS will not introduce the “connected related party group” in Notice 643 as part of the proposed RPT limit framework. The original intent of the “connected related party group” was to capture persons specified by MAS (“Specified Persons”) and their connected persons as a single group. This can be achieved by amending paragraph 14 of Notice 643 to require banks to constitute related party groups around their Specified Persons.

Reference materials

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