Singapore’s Parliament has passed a bill allowing the Monetary Authority of Singapore (MAS) to require banks deemed systemically important to hold additional resources that can absorb losses.
The Financial Services and Markets (Amendment) Bill passed on 6 October 2026.
In its second reading speech, MAS outlined plans to apply the Total Loss Absorbing Capacity (TLAC) framework to Singapore’s Domestic Systemically Important Banks (D-SIBs).
Banks Will Need More Resources to Absorb Losses
The framework will require D-SIBs to hold additional eligible loss-absorbing instruments and other financial resources to support their resolution if they become distressed.
MAS already has powers to bail in subordinated creditors of a distressed financial institution to restore its solvency.
The TLAC requirements will complement these powers by ensuring banks have resources available to absorb losses and help rebuild their capital.
MAS has consulted the industry and public on the required TLAC level, qualifying instruments and resources, public disclosures and the implementation timeline.
Under the amendments, MAS will be able to set these requirements and require institutions to disclose the level and composition of their TLAC, along with the priority of loss-absorbing instruments if they are wound up.
Institutions that fail to comply could face fines of up to S$250,000 upon conviction.
Continuing offences could attract additional fines of up to S$25,000 for each day or part of a day after conviction.
MAS noted that Singapore’s D-SIBs remain well-capitalised and well-managed.
It described the framework as part of ongoing efforts to prepare for the unlikely event of a distressed bank.
MAS Clarifies Its Role in Tackling Proliferation Financing
The bill also makes technical amendments to align Singapore’s counter-proliferation financing framework with updated Financial Action Task Force standards.
MAS’ existing anti-money laundering regime already requires financial institutions to mitigate risks linked to financing the proliferation of weapons of mass destruction. Its supervisory programme also covers these risks.
The amendments explicitly provide that MAS’ supervision covers proliferation financing alongside money laundering and terrorism financing.
They also clarify that MAS may assist domestic and foreign counterpart authorities in supervising proliferation financing risks.
Related changes cover other legislation administered by MAS.
The amendments will take effect on a date appointed by the minister through a gazette notification.
Featured image: Edited by Fintech News Singapore, based on images by Ministry of Foreign Affairs & Ministry of National Development and lifeforstock via Magnific
