MAS to step up scrutiny of Singapore’s exchanges

The multiplicity of exchanges is birthing blind spots, MAS says.

Singapore’s central bank is looking to relieve the city-state’s exchanges of a portion of their regulatory burden as they enhance their surveillance capabilities both within and across markets.

In a speech by Ong Chong Tee, deputy managing director of the Monetary Authority of Singapore (MAS), he highlighted that the presence of multiple exchanges which are focused on their own markets can give rise to blind spots as the exchanges may not have the complete picture of common members’ exposure and activities.

“There are also certain markets such as in the OTC derivatives space that are not under the direct surveillance of exchanges,” Ong said.

As a result, as the statutory regulator, Ong said the MAS will be in a better position to aggregate different pools of information in the activities across exchanges and market sectors. This includes anticipating possible risk and to investigate potential misconduct and market abuses.

“Advancement in technology, particularly in the field of data analytics, has brought about enhanced surveillance techniques. In terms of capacity building, the MAS will enhance our analytics and thematic studies of big datasets to detect hitherto complex patterns, for potential market misconduct and abuses,” Ong added.

The increased role of the MAS in regulation will also be beneficial for the market, as both the exchange and the central bank will be looking out for potential risks, though on different parameters.

“This will increase the robustness of the overall oversight of market activities,” Ong said.

Additionally, the enhancements will complement the MAS’ actions against market misconduct, with a premium on early detection, expedient investigations, and tough enforcement.

“This will also augment our toolkit to combat misdemeanors such as market manipulation and insider trading. MAS has and will spare no effort to investigate any serious market misconduct and to take appropriate enforcement action. This is not always an easy task because investigations into market misconduct often involve complex and large scale relationships, which will necessitate considerable investigation resources,” Ong added.