MONETARY AUTHORITY OF SINGAPORE (AMENDMENT) BILL

Order for Second Reading read.

5.33 p.m.

The Minister for Finance (Mr Hon Sui Sen): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The Monetary Authority of Singapore Act (Chapter 195 of the Revised Edition) was passed by Parliament on 2nd September, 1970. Parts I, II and V of this Act came into operation on 26th December, 1970, while the remaining parts came into operation on 1st January, 1971.

It is now proposed that, in order to facilitate Singapore's development as a financial centre and in the light of experience gained during the period of operation, certain amendments be made to the Monetary Authority of Singapore Act. These amendments to the Act are incorporated in the Amendment Bill now before the House.

The principal amendments appear in clauses 5 and 6.

Clause 5 is designed to confer upon the Monetary Authority of Singapore certain additional functions such as:

(i) purchasing, selling, discounting and re-discounting bills of exchange and promissory notes.

(ii) granting advances to certain approved financial institutions against Treasury Bills and securities of the Government, gold coins or bullion, bills of exchange, promissory notes and warehouse warrants.

These additional functions will enable the Authority to provide lender of last resort facilities to approved financial institutions, and are necessary for the establishment of an efficient money market, which will in turn expand and improve the financial infrastructure of Singapore and enhance Singapore's development as a financial centre.

Clause 6 introduces two new sections 24A and 24B. In section 24A, provision is made for the Authority to grant special loans to banks and approved financial institutions in times of monetary instability against such forms of security as the Authority may consider acceptable. In section 24B, power is conferred upon the Authority, if it thinks fit, to issue directives and guidelines to approved financial institutions for their operations and orderly development.

It is proposed also to make the following amendments, which appear in clauses 2, 3 and 4:

(a) Clause 2 increases the authorised paid-up capital of the Authority from $30 million to $100 million. The authorised paid-up capital of $30 million us now fully paid-up, and it is necessary to provide for future increases in capital, whenever these are considered desirable.

(b) Clause 3 would enable the Authority to have greater flexibility in the appointment and promotion of certain categories of persons without having to seek the advice of the Public Service Commission on all appointments. This clause, which has been drafted at the suggestion of the Public Service Commission, will enable the Authority by Gazette notification to specify the posts and appointments regarding which it would have to act on the advice of the Public Service Commission.

(c) Clause 4 would enable the functions, duties and powers conferred upon a public officer under any written law to be transferred to the Authority. This amendment contemplates the transfer to the Authority of powers and duties such as those conferred upon the Commissioner of Chit Funds under the Chit Funds Act. It is envisaged that such powers transferred from time to time to the Authority would be those related exclusively to money and finance.

Mr Speaker, Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole house.

The House immediately resolved itself into a Committee on the Bill.-[Mr Hon Sui Sen].

Bill considered in Committee; reported without amendment; read a Third time and passed.