MAS will follow up by allowing $ OTC interest rate derivatives, such as interest rate swaps, forward rate agreements, interest rate options and swaptions, to be transacted freely without consultation. Banks will, however, be required to submit monthly reports on details of interest rate derivative transactions exceeding $ million with counterparties outside Singapore. Credit rating of foreign entities issuing $ bonds So far, we have required foreign entities which wish to issue $ bonds to be of good credit standing. Up till now the lowest credit rating of foreign entities that have tapped the $ bond market has been single A. Debt intermediaries have told us that investors in the $ market would like to see a wider credit spectrum of $ bonds. MAS recognises that allowing more diversely rated bond issues would increase investment opportunities for investors with different risk-return appetites, allow portfolio diversification, and create more investor interest in our debt market. To widen the credit spectrum of foreign entities tapping the Singapore dollar bond market, MAS will allow the following to issue Singapore dollar denominated bonds: a) all rated foreign corporates; b) all sovereigns, rated or unrated; and c) unrated foreign corporates, provided the investor base is restricted to sophisticated investors.1 However, the requirement for the non-resident issuers to convert or swap the $ proceeds into foreign currency for use outside Singapore remains. MAS still does not allow $ funding of non-residents where the proceeds are to be used outside Singapore, or for purposes which do not generate economic value to Singapore.

However, the $ proceeds from the share issue must be maintained with a bank in Singapore and converted into foreign currency before they can be used outside Singapore. Foreign-owned companies whose shares are currently traded in foreign currencies on SES can convert the quotation of their stocks into $ SES will announce details for such conversion shortly. Subsequent share issues by such companies will be subject to the same requirement, i.e. proceeds must be converted into foreign currency before being used outside Singapore. This change is in line with the caveat emptor principle. Singaporean investors considering buying shares in a foreign company not operating in Singapore should learn for themselves what the company is doing, how successful it is likely to be, and what the risks are, before deciding whether or not to invest in the company. There is no need to deter them from investing in the company, by making the company list in a foreign currency. MAS will be issuing a revised MAS 757 shortly, incorporating these revisions. We hope the changes will increase international participation in our $ capital markets and add to their depth and critical mass. MAS will, of course, continue to review the Notice on an ongoing basis, in line with market needs and financial innovation. Year 2000 Lastly, it being so close to the end of the year, let me make some remarks on Y2K. Singapore’s financial sector is fully ready for the new millennium. All banks and financial institutions have taken all necessary steps to achieve Y2K readiness.