IIEffective Insolvency and Creditor Rights Systems
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 Bankruptcy Act and the Companies Act, have been amended in order to remain in step with international practice, particularly as it evolved in England. In 2006, the Insolvency Practitioners Association of Singapore (IPAS) was created. This is a professional association that performs both supervisory and advisory functions. It also fulfills a public education mission regarding insolvency and bankruptcy, and maintains a library of resources for use by both laypersons and professionals in the field. The IPAS includes among its duties an ongoing review of insolvency legislation, proposing changes when the need for such is perceived. For instance, the Organization for Economic Cooperation and Development reported in 2004 that Singapore was in the process of drafting omnibus insolvency legislation that would reduce the complexity embodied in current law. The IPAS has offered for public comment the draft of an anticipatory amendment that would address the perceived potential for the over-extension of the new omnibus insolvency law (slated for parliamentary consideration in late 2010 or 2011) to the detriment of solvent companies. Despite this information, 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.
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IDInternational Financial Reporting Standards
As described on the Deloitte's IAS Plus website, in 2001, the Disclosure and Accounting Standards Committee (DASC) of the Institute of Certified Public Accountants of Singapore (ICPAS) 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 in 2005 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. 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. More recently, a 2009 ICPAS Action Plan reiterates Singapore’s commitment towards harmonization of accounting practices, asserting that the ASC continues to adopt IFRSs with modifications to reflect local legal environment. Overall, as pointed out by multiple sources on the subject, Singaporean standards deviate from their international counterparts only in specific and exceptional instances. In a May 2009 address at a KPMG Asia-Pacific IFRS conference, Mr. Tharman Shanmugaratnam, the Minister of Finance of Singapore, announced that the ASC is working towards full convergence with IFRSs for listed companies by the year 2012. As for small and medium-sized entities (SMEs), in line with the IFRS for SMEs issued by the IASB, per a 2009 Deloitte publication, an Exposure Draft on SMEs has been circulated which allows simplified reporting requirements for entities with no public accountability.
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IDPrinciples of Corporate Governance
According to a 2004 IMF's FSSA, several measures have been taken in Singapore to improve corporate governance of companies, and a statement by Singaporean authorities in the 2004 IMF Article IV Consultation report underlines that standards for corporate governance, disclosure, and accounting are in line with international best practices. In addition, Singapore has been active in keeping pace with the changing global financial and legal climate and, therefore, the Companies Act has been amended several times over the years. A draft review of the Companies Act will be released for public consultation by 2010. According to a December 2009 KPMG newsletter the revision of the Act focuses on enhancing the fiduciary duties of directors and strengthening minority shareholders protection. Furthermore, in light of the governance issues thrown up by the global financial crisis by 2010, a Corporate Governance Council will be established to review the Code of Corporate Governance. The Council will, in particular, review quality and composition of the board, implementation of effective risk management and remuneration practices. Also, as noted in a June 2009 KPMG newsletter, in March 2009, the Singapore Stock Exchange (SGX) announced new and revised listing rules tightening requirements on disclosure practices, appointment of directors and disclosure of remuneration of top executives. In addition, a number of surveys and indices cover corporate governance practices in Singapore and provide useful tools to gauge the degree of implementation of corporate governance practices in the country. Singapore also scores very well in the Investor Protection subsection of the World Bank's 2009 Doing Business Indicators.
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ENInternational Standards on Auditing
The ICPAS pronouncements, which include Singapore Standards on Auditing (SASs), govern audit, review, other assurance and related services engagements in Singapore. According to the 2009 Preface to SASs, the Singapore standards are based on International Standards on Auditing (ISAs) issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants, although with modifications to reflect local legal requirements. Earlier, in a 2006 ICPAS self-assessment it was 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. In the 2009 Preface to SASs, the ICPAS reiterates its commitment to the harmonization of auditing standards and has, therefore, in line with the clarified ISAs, issued a new set of SASs with a December 15, 2009 effective date, same as that of the ISAs.
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IDAnti-Money Laundering/Combating Terrorist Financing Standard
In 2007, the Financial Action Task Force (FATF) assessed Singapore’s Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regime against the FATF's 40 recommendations and 9 special recommendations. The FATF released its findings in a report published in February 2008. Overall, the report points out that Singapore’s AML/CFT initiatives have resulted in a robust legal, institutional and supervisory framework. More specifically, the FATF report notes that, since the previous FATF mutual evaluation in 1998-99, Singapore has systematically addressed the weaknesses in its framework by setting up a financial intelligence unit (FIU), establishing a comprehensive suspicious transaction reporting regime, and an enhanced supervisory oversight. Despite these reforms, there still exist certain shortcomings in the country's AML legal framework as evident from the partially compliant rating assigned to Singapore for Recommendation 1 by the 2008 mutual evaluation. Per the report, concerns remain especially with regards to the effectiveness of the money laundering offence and requirements for designated non-financial businesses and professions. A 2009 United States Department of State report notes that the authorities in Singapore are addressing some of these weaknesses. A 2009 consultation paper by the Monetary Authority of Singapore notes that authorities are paying close attention to deficiencies with respect to AML/CFT requirements for financial institutions. Moreover, in its 2008-2009 Annual Report, the FATF lists Singapore as one of the jurisdictions which have undertaken to implement the FATF's 40 recommendations and 9 special recommendations.
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IICore Principles for Systemically Important Payment Systems
The 2004 IMF's assessment evaluated Singapore's compliance with the Committee on Payment and Settlement Systems' Core Principles for Systemically Important Payment Systems (CPSIPS). According to the IMF, Singapore’s payment infrastructure is one of the most advanced 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 CPSIPS, with no identifiable vulnerabilities. The 2004 FSSA also indicated that the MAS fulfilled 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 SIPSs under the Payment Systems (Oversight) Act of 2006. However, there is insufficient information publicly available regarding the compliance of MEPS+ and the other designated SIPSs with the CPSIPS.
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