The Monetary Authority of Singapore and Public Consultation

20 Ethos, July 2004
invited to submit written comments. This can
be complemented by other consultation
modes like meeting or surveying affected
parties, forming committees with
representation from all affected parties, and
organising public meetings.
• Each consultation should be accompanied by
a consultation paper published on the MAS
website (www.mas.gov.sg).
• To facilitate considered and meaningful
responses, a consultation paper should
provide a concise rationale, explanation and
analysis of the proposed measures.
• It should contain a summary of proposals or
highlight the specific issues on which MAS
would like comments. Questions on specific
issues provide focus and prompt the reader
to react.
• The consultation period should be at least
30 days to give interested parties sufficient
time to respond. For substantial changes, the
period should be longer and the consultation
should be publicised through a press release.
• A consultation paper must list a snail mail
and email address for submissions, as well
as a contact person who can respond to
questions.
• We need to publish on the MAS website a
brief summary of submissions and our
responses at the time when the changes are
finalised and announced. This is to assure
respondents that their submissions have
been read and considered.
• To enhance transparency and ensure that
public submissions are meaningful and
responsible, the consultation papers state
that individual submissions may be made
public unless confidentiality is expressly
requested.
On One Hand...
Consultation improves the policy-making process
in several ways.
First, we can tap on market practitioners’
knowledge and understanding of the market to
validate and, where appropriate, refine our
policies. For instance, in our recent consultation
on the Securities and Futures Act amendments,
we wanted to allow collective investment
schemes, such as unit trusts, to be marketed to
institutional investors before the scheme’s
prospectus is registered. Practitioners commented
we need not differentiate between institutional
investors and sophisticated investors 1 . We agreed
with this and will permit pre-marketing to
both institutional investors and sophisticated
individuals.
Market players can also help us identify and
deal with implementation issues in advance. For
instance, they informed us that our requirement
for banks to divest their non-financial assets
would have significant tax implications. This
allowed us to work with the Inland Revenue
Authority of Singapore on a one-off tax concession
to facilitate the divestments.
Consultation also provides an avenue to explain
and garner support for our policies. We had
extensive discussions with the local banks
before introducing the banking liberalisation
programme in 1999. We explained the programme’s
rationale, and assured the banks that we would
calibrate the pace and extent of liberalisation to
encourage competition while allowing them to
strengthen and reposition themselves.
Making proposed policy changes known
beforehand helps provide greater certainty
and enables the affected parties to prepare
for the new policies. Institutions need time to
establish processes or reallocate resources for
new regulatory changes. Consultation provides
this ‘heads up’ which is clearly preferable to
introducing new requirements to unwitting
parties who may not be prepared to comply.
A more consultative and transparent approach to
policy formulation is consistent with Singapore’s
stature as an international financial centre. In
the recent IMF-World Bank Financial Sector
Assessment Programme, Singapore was evaluated
as having observed the IMF Code of Good Practices
on Transparency for our public consultation process.
1 A “sophisticated investor” is one who has sufficient knowledge and experience with investing to be able to evaluate the merits of an investment.
In Singapore, a sophisticated investor would include an individual with total net personal assets exceeding S$2 million or an annual income of
at least S$300,000.