Singapore achieves medium overall compliance with international standards and codes, with a score of 46.67 out of 100 in our Standards Compliance Index. Singapore's compliance in all three broad categories is mixed. While it is highly compliant in the area of data dissemination, its compliance with monetary and fiscal transparency policy standards shows room for improvement. An International Monetary Fund assessment of its statistical and fiscal practices, which Singapore is considering, should facilitate the evaluation of the country's compliance with international best practices. Compliance is particularly advanced in banking and securities regulation. Singapore's auditing standards are harmonized with the International Standards on Auditing; and in March 2005, Singapore announced its intention of adopting the International Financial Reporting Standards. Its corporate governance standards have also been substantially enhanced and are in line with international best practices. However, there is no publicly available information regarding Singapore's compliance with international insolvency framework regulations or the revised insurance core principles.

Macroeconomic Policy and Data Transparency

Singapore has been a subscriber to the International Monetary Fund's (IMF) Special Data Dissemination Standard (SDDS) since 1996 and has met SDDS requirements since 2001. Data quality has steadily improved over the years, but the IMF's 2006 Article IV report found that some improvements could still be made. This is particularly the case in the area of external and fiscal data. Furthermore, the IMF's SDDS website indicates that Singapore falls short in its compliance with SDDS requirements on integrity and quality of data. More »

Singapore's monetary policy transparency has improved over the recent years, according to the IMF. In a 2004 Financial System Stability Assessment (FSSA) published in 2005, the IMF reported that the framework was now "quite transparent," especially given the nature of Singapore's exchange rate regime based monetary policy. In the opinion of the authorities, the regime's managed float inhibits transparency, however. The IMF found a few areas where improvements could be made. It called for greater transparency regarding the Monetary Authority of Singapore's (MAS) policy tools for exchange rate intervention and suggested that greater detail be provided regarding its trade-weighted exchange rate index and the target band within which it may fluctuate. Legislation has been drafted to address some of the issues raised by the IMF, according to the MAS website. Singapore is a member of the IMF's SDDS and the monetary data it provides to the SDDS meets the requirements of coverage, timeliness, and periodicity. More »

Singapore's fiscal framework, including the budget process, has several unique and innovative aspects, according to a report by J.R. Blondal for the OECD. Not least of these is the use of two investment bodies, Temasek and the Government of Singapore Investment Corporation (GSIC), whose funds are used to pay for much of Singapore's social service expenditures and which are not included in the formal budget. The recent move by Temasek to open its operations to public review through publication of an annual report has been seen as a significant step forward in improving transparency. Extending this type of disclosure to the GSIC's operations would further improve transparency. The International Monetary Fund has been working with Singapore to develop a Report on the Observance of Standards and Codes, fiscal module, during 2006-2007. More »

Institutional and market infrastructure

The legislative framework for Singapore's insolvency regime is derived from English legal tradition. According to a variety of sources, the system is efficient and inexpensive. In recent years, the core insolvency legislation, the Insolvency Act and the Companies Act, have been amended in order to remain in step with international practice, particularly as it evolved in England. The year 2006 saw the launch of the Insolvency Practitioners Association of Singapore (IPAS), a professional association established to perform both supervisory and advisory functions within the profession. The IPAS also provides educational opportunities and maintains a library of resources for use by professional insolvency administrators and practitioners. The World Bank's "Doing Business" snapshot of Singapore's business closing practice discloses that Singapore's practice compares quite favorably to the average experience in both the region and among OECD member states. It takes 0.8 years on average to complete the closing process in Singapore, compared to 2.7 years for the region and 1.3 years for member states of the OECD. The cost of the procedure is 1% of the estate, on average, in Singapore, compared to 23.2% for the region and 7.5% for the OECD. Return to the creditors runs, on average, 91.3 cents on the dollar in Singapore, only 28.1 cents for the region, and 74.1 cents for the OECD member states. However, there is insufficient publicly available information that specifically addresses Singapore's compliance with the Principles and Guidelines for Effective Insolvency and Creditor Rights Systems developed by the World Bank. More »

Since late 2000, Singaporean authorities have been working toward aligning national standards with their international equivalents. As described on the Deloitte IAS Plus website, in 2001, the Disclosure and Accounting Standards Committee (DASC) of the Institute of Certified Public Accountants recommended the adoption of International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB). The Singapore government subsequently accepted all of the DASC recommendations, and in 2004 the Council on Corporate Disclosure and Governance (CCDG) issued revised standards which were "almost identical" to those issued by the IASB under the Improvements Project (with the exception of the international standard on Investment Property). These revised Singapore Financial Reporting Standards (FRSs) became effective for financial periods beginning on or after January 1, 2005. A 2007 Deloitte publication notes that FRSs and Interpretations of FRSs are largely aligned with the international equivalents, except for differences in accounting for property plant and equipment, leases, associates and joint ventures, and requirements for consolidated financial statements. Further, modifications to effective dates, transitional provisions and, in certain cases, discrepancies in timing of adoption also exist. In 2007, the Accounting Standards Council (ASC) superseded the CCDG as the national accounting standards-setter. According to the ASC website, the Council continues to implement its predecessor's policy of adopting IFRSs and plans to "track closely" new IFRSs in order to consider them for adoption in Singapore. The possible application of new IFRSs in Singapore would be premised on the local economic and business environment and the needs of the entity to which these standards would apply to. More »

According to the 2004 IMF FSSA, several measures have been taken in Singapore to improve corporate governance. Amendments were made to the Companies Act in 2003 and 2005, and the Code of Corporate Governance was updated in 2005 to better meet international standards and is enforced on a comply-or-explain basis. Corporate governance oversight responsibilities rest with the Monetary Authority of Singapore and the Singapore Exchange. Disclosure and accounting standards are of high quality. Company law and listing rules provide protection to shareholders. Singapore also scores very well in the Investor Protection subsection of the World Bank's 2008 Doing Business Indicators. A more comprehensive report on corporate governance practices would likely increase Singapore's overall compliance score for this standard. More »

According to the 2006 self-assessment prepared by the Institute of Certified Public Accountants of Singapore (ICPAS) for the International Federation of Accountants' Member Body Compliance Program, International Standards on Auditing (ISAs) issued by the International Auditing and Assurance Standards Board (IAASB) are adopted as the Singapore Standards on Auditing (SSAs), although with editorial amendments to reflect local legal requirements. The 2006 ICPAS self-assessment further noted that the Auditing and Assurance Standards Committee of the ICPAS considers all new and revised pronouncements issued by the IAASB and recommends them for adoption in Singapore. Listed and unlisted entities follow the same set of auditing standards. More »

The 2004 FSSA concluded that Singapore complied well with most of the Financial Action Task Force (FATF) 40+ 8 Recommendations. However, this assessment was based on the FATF's 2002 methodology, which was subsequently revised in 2004. The 2004 IMF report concluded that Singapore had a strong and comprehensive legal, institutional, policy, and supervisory framework to facilitate Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) compliance. Singapore also has a long and well-entrenched culture of compliance and an effective monitoring framework for the implementation of laws. The MAS, in its 2006/2007 annual report, notes that it has issued revised Notices on AML/CFT, effective from March and April 2007, to keep them in line with the latest standards developed by the FATF. The 2007 U.S. Department of State report also affirms that Singapore is taking important steps to reform its legal and regulatory framework in an attempt to implement the revised FATF Recommendations on AML/CFT, but Singapore has not yet ratified the UN Convention against Transnational Organized Crime. Nonetheless, there is little comprehensive information publicly available addressing Singapore's compliance with the FATF recommendations per the 2004 methodology. More »

According to the 2004 FSSA, Singapore has one of the most developed payment infrastructures in the world. At the time of the 2004 FSSA, the MAS Electronic Payment System (MEPS), operated by the MAS, was classified as Singapore's systemically important payment system (SIPS) and, according to the FSSA, exhibited a high degree of observance with the Core Principles for Systemically Important Payment Systems (CPSIPS), with no identifiable vulnerabilities. The 2004 FSSA also indicated that the MAS fulfills the applicable central bank responsibilities and was well equipped and empowered to oversee the payment infrastructure in the country. The IMF noted that, at the time of the FSSA, the MAS was considering designating more systems as SIPSs. The MAS 2006/2007 annual report stated that the MEPS was replaced by its second generation successor, the MEPS+ in December 2006. The latter incorporates several enhancements over its predecessor. Moreover, the Singapore Dollar Check Truncation System, U.S. Dollar Check Truncation System, and Interbank GIRO System have also been designated as SIPS under the Payment Systems (Oversight) Act of 2006. However, there is insufficient information publicly available regarding the compliance of MEPS+ and the other designated SIPS with the CPSIPS. More »

Financial Regulation and Supervision

The 2004 FSSA concluded that Singapore has a sound prudential and regulatory framework for effective banking supervision that exhibits a high level of observance with the Basel Core Principles (BCPs). However, the IMF FSSA did point to a few irregularities. One issue is insufficient clarity regarding the role of the chairman of the MAS, Singapore's central bank and unified financial sector regulator. Another has to do with the need for greater clarity and comprehensiveness of the definition of large exposure limits. The IMF's 2005 Article IV (published in 2006) report indicates that the Singaporean authorities have taken measures to delineate and document the MAS' chairman's multiple roles and responsibilities. The 2006 IMF report also notes that banks in Singapore remain profitable and well capitalized. However, there is little recent information publicly available addressing issues relating to Singapore's compliance with the BCPs. More »

The IMF FSSA evaluates Singapore as being in high compliance with the International Organization of Securities Commissions Objectives and Principles of Securities Regulation. The report points out that Singapore has one of the most highly developed securities markets in the world. The risk-based regulatory and supervisory framework for securities markets, intermediaries, issuers, and collective investment schemes is in line with international standards. The few outstanding issues were believed to have been addressed at the time of the publication of the FSSA. The 2005 IMF Article IV Consultation with Singapore indicates that ongoing close surveillance is especially important with the growing sophistication of the capital markets. Since the FSSA, there have been a number of advances in securities legislation and the structure of the securities and derivatives markets, including amendments to the Securities and Futures Act, the Financial Advisers Act, the Companies Act (Chapter 50), and the Code on Collective Investment Schemes. In addition, the Payment Systems (Oversight) Act and several initiatives aimed at strengthening risk-management have been implemented, and an electronic bond trading system has been introduced. More »

According to the 2004 FSSA, Singapore showed a high level of compliance with the International Association of Insurance Supervisors (IAIS) principles promulgated in 2000. The FSSA found an adequately capitalized and profitable insurance sector in Singapore, with an ability to withstand significant shocks. Singapore was seen to be moving forward with initiatives on making its capital standards more comprehensive and risk-based, and introducing new rules on corporate governance and internal controls. The FSSA noted that implementation and enforcement of the above-mentioned initiatives would bring Singapore in closer compliance with the 2000 IAIS principles. The other key FSSA recommendations pertained to clarifying and issuing additional prudential rules, issuing corporate governance guidelines for insurers, and improving the off-site and on site supervision conducted by the MAS. The 2006 Article IV report by the IMF mentions the progress made by Singapore in implementing the 2004 FSSA recommendations. It notes that Singapore launched the recommended risk-based capital framework in August 2004 and that insurers have been required to comply with the new framework since January 1, 2005. As far as the recommendations for improving corporate governance are concerned, the MAS website states that the Corporate Governance Guidelines for insurers were issued in 2005. However, there is insufficient information publicly available as to Singapore's compliance with the revised, more demanding Insurance Core Principles (ICPs) promulgated by the IAIS in October 2003. More »

Legend:

Credit Ratings

Moody's Aaa/Stable

Fitch AAA/Stable

Standard & Poor's AAA/Stable

Macroeconomic Data

2007 GDP (Current Prices): 161.3 billion USD (IMF)

2007 GDP (Per Capita): 35,163 USD (IMF)

2008 GDP (Growth Forecast): 3.9% (IMF)

2008 Inflation (CPI): 4.7% (IMF)

2007 Unemployment: 1.7% (CIA)

2006 Foreign Direct Investment

FDI (Inward): 24.2 billion USD (UNCTAD)

FDI (Outward): 8.6 billion USD (UNCTAD)

2006 Official Development Assistance

ODA (Received): N/A million USD (OECD)

ODA (Disbursed): N/A million USD (OECD)