Strict but fair – that is how financial services companies
view the Monetary Authority of Singapore’s approach to regulation, which
includes regular consultation with current and prospective market entrants.
Rethinking “Market-Friendly” Assessment
When it comes to assessing the merits of an industry
regulator, an obvious starting point is to ask whether it is ‘market-friendly’.
But that is an oversimplistic approach – the focus should instead be on how
these bodies balance robust oversight with fostering innovation and growth.
By this standard, the Monetary Authority of Singapore
(MAS) scores well with domestic financial services firms and industry
bodies alike.
Principles-Based Regulation and Flexible Guardrails
The regulator practices what Cora Ang, head of legal &
compliance APAC at
AMINA Bank, describes as pragmatic, principles-based regulation, maintaining an
open door to participants willing to operate within its framework while
upholding a demanding framework.
“MAS explicitly emphasises responsible innovation within
what it calls ‘flexible guardrails’, taking a risk-based approach particularly
in evolving areas such as digital assets and AI,” she explains.
“Unlike prescriptive, rules-based regulation, MAS guidelines
focus on principles and desired outcomes, giving firms discretion in how they
meet standards rather than dictating exact compliance procedures.”
High Stakes Enforcement
But this flexibility comes with high stakes. MAS has low
tolerance for firms falling short of expectations, and its enforcement strategy
amplifies individual penalties into market-wide behavioural shifts.
For example, when the regulator fined several institutions
for AML/CFT failures in
a 2023 money-laundering case, it simultaneously updated its supervisory
guidance so that every market participant faced heightened compliance
requirements and costs to meet the new baseline.
“So while MAS welcomes innovation and growth, it operates
with little margin for error and uses enforcement to move the entire market,
not just individual actors,” adds Ang.
Regulatory Maturity and Market Predictability
Sophisticated market participants look for regulatory
maturity and systemic predictability. The MAS is increasingly viewed as a
pragmatic architect that has successfully shifted the industry’s focus from
speculative experimentation to institutional-grade commercialisation.
We were delighted to host central bank governors from across the region at the @sgfintechfest (SFF), where they witnessed firsthand the cutting-edge innovations shaping the future of finance.For more info on SFF: https://t.co/MWkA8Ct4Rw pic.twitter.com/kpFRnjGskh
— MAS (@MAS_sg) November 17, 2025
That is the view of Rohit Apte, head of markets at regulated
institutional digital asset markets services provider Hex Trust, who notes that
for digital assets to achieve global scale, they must be underpinned by
interoperable, trust-minimised infrastructure that satisfies the fiduciary
requirements of the world’s largest asset managers.
“By prioritising market integrity and robust governance, the
MAS is effectively establishing international benchmarks for the next
generation of financial markets, attracting quality capital that prioritises
long-term stability over short-term volatility,” he says.
Consultative Approach and Stakeholder Engagement
Given that MAS actively consults stakeholders and related
professionals before implementing significant policy and regulatory changes,
the Securities Investors Association Singapore is of the
view that it is a consultative market regulator, which is “most laudable,”
according to the association’s head of regulatory, Robson Lee.
Simon Forster, global co-head of digital assets at TP ICAP,
says much of Singapore’s relevance in the digital asset space stems from the
work of the MAS since Project Orchid in 2021, which explored the viability of a
digital Singapore dollar, and more recently Project Bloom, which broadened that
scope to include stablecoins and tokenised commercial bank money.
In late 2025, the regulator announced plans to start testing
the issuance of tokenised bills to primary dealers, which will be settled
through a wholesale central bank digital currency.
“What started as exploratory has now matured into a broad
consensus that multiple forms of digital money will proliferate as payments
firms, banks and private sector participants race to issue, support and provide
access to these new instruments,” says Forster.
Areas for Improvement
Of course, this is not to say that the regulatory
environment in Singapore could not be improved.
“As the global economy enters a more nuanced rhythm in 2026,
market participants are advocating for structural refinements that enhance
capital efficiency and cross-border mobility,” observes Apte.
“The industry is primarily seeking the global
standardisation of asset protocols – specifically for tokenised funds and bank
liabilities – to ensure seamless interoperability across international
platforms and jurisdictions.”
Furthermore, there is a clear mandate for modernised
post-trade infrastructure and enhanced multi-market connectivity, which would
allow custodians to better align with international practices and unlock deeper
liquidity pools.
“Finally, as institutional pilots for real-world assets
expand, the market is calling for an agile governance model that addresses
emerging technical risks without stifling the responsible innovation that
defines Singapore’s macro strategy,” adds Apte.
Refining Existing Rules
When asked what rule changes market participants would like
to see in Singapore, Ang suggests that the real need isn’t for new rules but
rather refinements to how existing rules are calibrated, applied and
operationalised in practice.
“The common wish list across banks, fund managers and
digital asset firms centres on operational predictability, specifically more
proportional requirements tied to actual business models and risk profiles,”
she says. “Right now, there is ambiguity around when simplified compliance
measures are acceptable versus when enhanced measures kick in. Clearer
thresholds would help firms design appropriate controls from the outset.”
#ICYMI: MAS has proposed Guidelines for AI Risk Management in the financial sector — including governance, risk management, life cycle controls, and capabilities. Submit your comments on the proposals by 31 Jan 2026.📄 https://t.co/oVBN2oXUGC pic.twitter.com/J8FnJb6Cbr
— MAS (@MAS_sg) December 16, 2025
There have also been calls for faster, more predictable
licensing and approval timelines amid concerns that some processes have become
so protracted that they have shifted from friction to a genuine deterrent for
market entry, especially for firms trying to assess whether Singapore is viable
for their business model.
Ang calls for greater harmonisation across regulatory
frameworks on the basis that firms operating across multiple licence types or
business lines face overlapping but inconsistent requirements, creating
compliance complexity that doesn’t always map to risk.
“Clearer playbooks for emerging sectors such as digital
assets would also be welcome,” she continues. “The current principles-based
approach creates flexibility but also uncertainty. Firms need enough regulatory
clarity to commit capital and build sustainable operations without risking
sudden supervisory expectation shifts.”
Continued Consultation and Transparency
The SIAS is in constant contact with the MAS as and when it
obtains significant feedback on regulatory policies and market conduct rules,
including when it receives credible information regarding market misconduct or
breaches.
“In this respect, we would like the MAS to continue with its
consultative approach towards proposed rules implementation and receptiveness
to market feedback regarding enforcement,” says Lee.
The bottom line is that participants want to play by the
rules – they just want to know what the rules look like in advance.
This article was written by Paul Golden at www.financemagnates.com.
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