Jurisdiction - Singapore
Reports and Analysis
Singapore – New Disclosure Requirements on Remuneration Practices and Policies for Banks.

 

28 September, 2011

 

In tandem with the recent finalisation of the "Pillar 3 Disclosure Requirements for Remuneration" by the Basel Committee on Banking Supervision, the Monetary Authority of Singapore ("MAS") on 17 August 2011 released a consultation paper to propose amendments to the MAS Notice 637 ("MAS 637") to require Singapore-incorporated banks ("Banks") to disclose the following areas related to their remuneration practices and policies:

 

·         governance structures overseeing remuneration;

·         design/operation of remuneration structure and frequency of review;

·         independence of remuneration for staff in risk and compliance functions;

·         risk adjustment methodologies;

·         the link between remuneration and performance;

·         long-term performance measures (i.e. deferral, malus, clawback); and

·         types of remuneration (i.e. cash or equity; fixed or variable remuneration),

 

Collectively, the Remuneration Disclosures. The current disclosure regime for Banks does not require the Remuneration Disclosures to be made. The MAS has proposed that certain specific qualitative and quantitative information be disclosed. Such qualitative information to be provided includes descriptions of each of the areas listed above, explanations of the Banks' use of variable remuneration, the main performance metrics used, and the extent to which the Banks' remuneration policy is applicable to foreign subsidiaries and branches. Quantitative information to be provided includes a breakdown of the amount of remuneration awards for the financial year, the frequency of meetings of the remuneration committee, and employees' exposure to implicit and explicit adjustments of deferred or retained remuneration.

 

If the Remuneration Disclosures are implemented by the MAS, the Remuneration Disclosures, together with the other matters required to be disclosed in MAS 637, should generally be made at least once a year, and be included in Banks' annual report and periodic financial statements. 

 

The consultation paper was open for comments from the public until 14 September 2011.

 

 

 

 

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