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Singapore – Drawing A Line: Response To SIBOR Manipulation Illustrates Differences In Regulatory Approach.

31 October, 2014


Legal News & Analysis – Asia Pacific – Singapore – Regulatory & Compliance


Fallout from the LIBOR manipulation scandal continues, with Lloyds Bank the latest to receive substantial fines from UK and US regulators. In Singapore, although there were similar investigations and issues in relation to SIBOR manipulation (Singapore Interbank Offered Rate), the regulator took a different attitude and approach to the penalties that should be given to those involved. In this article we discuss the SIBOR investigation and its outcome, and how this illustrates a difference in approach between regulators.

Investigation And Outcome

SIBOR is, similar to LIBOR, a daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the Singapore wholesale money market, and reflects how much it would cost banks to borrow from each other. SIBOR was set up by the association of banks in Singapore on the basis of estimates provided by members and is more commonly used than LIBOR or Euribor in the Asian region and, in Singapore, is used for the setting of mortgage interest rates.

The Monetary Authority of Singapore (MAS) carried out a year-long review of SIBOR as well as Swap Offered Rates (SOR) and Foreign Exchange spot benchmarks (FX benchmarks) over the period 2007 – 2011. In June 2013, MAS reported that 133 traders were found to have engaged in attempts to inappropriately influence the benchmarks (although there was no conclusive finding by MAS that the benchmarks had been successfully manipulated). MAS found that twenty banks had deficiencies in governance, risk management, internal controls and surveillance systems. As a result, MAS:


  • censured the banks, requiring them to adopt measures to address their deficiencies and to report on a quarterly basis on their progress as well as conduct independent reviews
  • required the banks to deposit additional statutory reserves at a rate of zero interest for one year, although the duration for which the reserves were to be held was to be variable depending on the progress made with addressing deficiencies

The sums required were significant, with RBS, ING and UBS being required to deposit over 1 billion dollars. 

MAS reported that all of the traders involved had either left their banks, or would be subject to disciplinary action, and that the industry would put in place measures to facilitate reference checks so that an institution looking to hire someone would be made aware if they had been implicated in attempts to manipulate benchmarks. It concluded however, that there appeared to have been no criminal offence committed under Singapore law.

Legislation is to be adopted that will make the manipulation of financial benchmarks in Singapore subject to criminal and civil sanctions under the Securities and Futures Act (SFA) and administrators and submitters of financial benchmarks will be subject to regulation and licensing requirements. A consultation took place on the draft legislation in July/August 2014.


The response by MAS is a typically Singaporean response to a scandal of this kind; decisive, pragmatic, and acting with an eye on the bigger picture. In this instance, their focus seems to have been on ensuring the rapid reform of the system, and not on handing out headline grabbing punishments. The approach has been well received, with the penalties for the banks (tied up capital with some interest loss) seen as severe but such as will allow these institutions to move on quickly as their money will be returned. It has been made clear that the individuals involved will no longer be welcome in Singapore’s financial services industry. The differing focus of the regulators and the investigation in Singapore has likely influenced the absence of claims against the banks, which is in contrast to the UK and US. Whilst the LIBOR scandal continues to rumble on in London and New York, it appears that a line may have been drawn under the matter as far as Singapore is concerned.


Clyde & Co


For further information, please contact:


Ian Roberts, Partner, Clyde & Co

[email protected]


Regulatory & Compliance Law Firms in Singapore

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