On market conduct, MAS has issued two consultation papers on the sale of listed and unlisted investment products, to strengthen safeguards for retail customers and enhance MAS’ regulatory powers. We will be issuing our response to the feedback received in 2H2010. Proposals which do not require legislative amendments will be implemented first. Financial institutions will be expected to adopt the remaining proposals even before legislative implementation as good practice in conducting business with their customers. 14. MAS also issued the Guidelines on Fair Dealing last year. The Guidelines stress the responsibilities of the Board and Senior Management of financial institutions to set the corporate culture and direction to deliver fair dealing outcomes to customers. Over the last year, MAS has written to CEOs and Boards of major financial institutions to emphasise our expectations. We have noted increasing awareness among financial institutions of the importance of dealing fairly with customers. Going forward, MAS will continue to engage the Board and Senior Management of financial institutions, and assess their implementation of the Guidelines through off-site and on-site supervision. Financial institutions are also expected to conduct their own mystery shopping, while MAS’ mystery shopping exercise will serve as an independent check and benchmark practices across financial institutions. 15. In strengthening our regulatory and supervisory regimes, MAS will continue to maintain our balanced and consultative approach. We remain focused on achieving good regulatory outcomes that are appropriate to Singapore and seek to promote sustainable development of the financial sector. 16.

In maintaining the soundness of the financial system in Singapore, MAS’ approach is centred on establishing sensible rules appropriate to our circumstances, strengthening prudential and market conduct supervision, and working in partnership with the industry to develop a shared ownership of supervisory outcomes. 9. This approach has served us well. As global reforms reshape the financial landscape, we will continue to strengthen our supervisory and regulatory regimes and market infrastructure, consistent with new international standards and best practices. As we have done in the past, we will calibrate these changes to take into account our environment and regulatory objectives. 10. MAS is supportive of global reform efforts to strengthen capital and liquidity frameworks. We have always considered capital adequacy and effectiveness of a bank’s risk management and capital planning processes as important parts of overall prudential management of banks. As a member of the Basel Committee on Banking Supervision, we participated actively in international discussions that helped shape the broad agreement reached earlier this week on the main design elements of the new capital and liquidity reform package. Other design details such as calibration, and phase-in arrangements as well as the framework for regulatory buffers will be determined later in the year. We would like to see a set of final proposals that can be implemented globally in a meaningful manner to promote the long term stability of the banking system.