MAS awards SRFB privileges to StanChart, will revamp SRFB framework

Lenders who substantially exceed the SRFB criteria may be allowed to open subsidiaries.

The Monetary Authority of Singapore (MAS) has awarded Significantly Rooted Foreign Bank (SRFB) privileges to Standard Chartered Bank (Singapore), which allows the lender to operate additional places of business (POBs), the regulator announced in a press release.

Standard Chartered was the first bank to qualify for an SRFB. The lender will be allowed to establish up to 50 POBs, of which 35 may be branches.

MAS also revealed that it plans to enhance the SRFB framework so that in the future, an SRFB that exceeds the criteria for significant rootedness in Singapore may be given additional privileges that include the ability to establish a separate subsidiary, amongst others.

Under the enhanced framework, MAS will consider granting an additional full bank licence to an SRFB that substantially exceeds the SRFB baseline criteria.

This will enable them to have the same flexibility as a Singapore-incorporated banking group and establish subsidiaries, including with joint-venture partners—such as a digital-only bank, said MAS.

MAS will consider several additional factors to determine if an SRFB exceeds the baseline criteria. These include the full subsidiarization of banking business operations in the island, having a significant proportion of global key appointment holders and heads based in Singapore, and showing a firm commitment to the city’s financial stability.

The latter will be determined based on whether the foreign lender is a significant bank in Singapore based by headcount, and if the bank focusses on developing the talent pipeline through creating more jobs and participating in upskilling programmes. The lender also must have a Singaporean or a Singaporean group as a substantial shareholder.

The bank must also “demonstrate strong commitment to Singapore economy and financial markets” by being a MAS primary dealer, leading and participating in key industry initiatives and associations, and showing commitment to develop new business lines or deepen existing business lines in the city.

SRFB privileges, including the award of the additional full bank licence, will continue to be offered only under Singapore’s FTAs that contain SRFB commitments, MAS added.