Earlier in the year, the Monetary Authority of Singapore (“MAS“) increased the Maximum Deposit Insurance (“DI“) Coverage from S$75,000 to S$100,000 per depositor per DI Scheme member. This followed a consultation issued on 27 June 2023 titled “Consultation Paper on Proposed Enhancements to the Deposit Insurance Scheme in Singapore”.
MAS published its Response on feedback received on the Consultation (“Response“) in two parts. Part 1 of the Response (published on 22 September 2023) addressed the coverage increase. You may read more about Part 1 of the Response in our September 2023 issue of Newsbytes, available here. Part 2 of the Response (published on 19 November 2024) provides operational clarification of the DI scheme.
Key changes are summarised below.
Computation of DI Compensation
Quantification time
Initially, MAS proposed stipulating a quantification time for deposit balances to be considered final for compensation determination. However, due to operational challenges highlighted in feedback, MAS decided that:
- DI compensation will be determined based on the end-of-day deposit balances.
- The declaration of quantification date (“QD“) is to be accompanied by the immediate cessation of new payment activities to and from the failed Scheme member.
Exclusion of unsettled transactions
MAS proposed including only fully settled transactions in insured deposits as of the QD. Due to concerns about operational difficulties, MAS will now require:
- failed DI Scheme members to compute DI compensation based on deposit balances as of the end-of-day of the next business day (QD+1); and
- the declaration of QD to be accompanied by the immediate cessation of new payment activities to and from the failed Scheme member.
Any subsequent adjustments to deposit balances after QD+1 will be assessed and dealt with by the liquidator as part of the liquidation process. SDIC will make amendments to the SDIC Rules requiring the failed DI Scheme member to provide information on deposit balances as of QD+1, by QD+2.
Register of insured deposits
To enhance transparency and efficiency, MAS proposed to:
- require DI Scheme members to: (i) maintain an updated register of insured deposits with the Singapore Deposit Insurance Corporation (SDIC); and (ii) publish and maintain a list of insured products on their websites; and
- remove the current requirements for annual submissions and notification to SDIC as and when there are changes to the register of insured deposits.
MAS will proceed to amend DI Regulation 12 to effect these requirements.
Improving Efficiency of DI Operations
Flexibility in compensation methods
MAS proposed to:
- remove DI Regulation 10(2) to 10(4), which currently allows SDIC the option of choosing among a list of prescribed payment methods for DI compensation paid in respect of insured deposits held under trust, client and sole-proprietor accounts; and
- clarify DI Regulation 10(1) that the method of compensation payment, in respect of moneys placed under CPFIS or CPFRS, is at SDIC’s discretion and does not provide an option for insured depositors to select their preferred method of receiving compensation from the DI Fund.
MAS will proceed with the proposal to remove DI Regulation 10(2) to 10(4) and make clarifications to DI Regulation 10(1).
Administration of unclaimed monies
MAS will proceed with its proposal for SDIC to take over the administration of unclaimed DI monies from the PTO, ensuring appropriate safeguards.
Seven-year time limit for DI compensation claims
MAS proposed a seven-year time limit from QD or the date of the liquidator’s discharge, whichever is later, for insured depositors to submit claims for DI compensation regarding unclaimed monies.
MAS considers that a seven-year time limit is adequate for depositors or their legally authorised representatives to come forward to claim their DI compensation, and will work with SDIC to alert insured depositors of their DI compensation.
Information to resolve DI compensation disputes
MAS will proceed with its proposal to clarify that the liquidator’s assessment will be final for resolving DI compensation disputes, and that insured depositors’ balances with the failed bank may not be disputed after the liquidator’s discharge.
SDIC to accumulate recovered amounts paid in excess or in error, and make aggregated payments to relevant stakeholders
MAS will proceed with its proposal to amend Section 28 of the Deposit Insurance and Policy Owners’ Protection Schemes Act (“DI-PPF Act“) to expressly allow SDIC to accumulate recovered amounts before making aggregate payments to relevant stakeholders, with each payment to be made no later than two months after SDIC receives the recovered amount.
For more information, click on the following links (available on the MAS website at www.mas.gov.sg):
- Response to Feedback Received on Proposed Enhancements to the Deposit Insurance Scheme in Singapore (Part 1)
- Response to Feedback Received on Proposed Enhancements to the Deposit Insurance Scheme in Singapore (Part 2)
- Consultation Paper on Proposed Enhancements to the Deposit Insurance Scheme in Singapore
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