MAS responds to feedback on proposed amendments to related party transaction requirements for banks

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DISCLAIMER: This update is intended for your general information only. It is not intended to be, nor should it be, regarded as or relied upon as legal advice. Court decisions referred to herein may be subject to further appeal at the time of publication, and subsequent developments in the law, including new legislation, amendments, court decisions or practice directions, may affect the accuracy or relevance of the matters discussed. We are under no duty to update this publication to reflect any such changes in the law. You should consult a qualified legal professional before taking any action or omitting to take action in relation to matters discussed herein.

WongPartnership LLP (UEN: T08LL0003B) is a limited liability law partnership registered in Singapore under the Limited Liability

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MAS Responds to Feedback on Proposed

Amendments to Related Party Transaction

Requirements for Banks

On 4 September 2026, the Monetary Authority of Singapore (MAS) published its response to feedback

(Response) received on its 14 October 2025 consultation paper regarding its proposed changes to the requirements on banks’ transactions with related parties, currently set out in MAS Notices 643, 643A and 656 (collectively, Notices). MAS had consulted on proposals to enhance oversight of related party transactions (RPTs), address conflict of interest risks, and align with international best practices including the updated Basel Core Principles for Effective Banking Supervision.

At a glance

MAS will, among other things:



Only require a person to be included in the ESMG and EDG (as defined below where MAS designates them as such, or where the bank has reasonable grounds, based on credible information it is aware of, to believe that the person can exert significant influence on an executive officer or director in a way that may affect how that person discharges his or her duties. Banks may continue to rely on annual declarations by executive officers and directors to identify such persons.



Remove the existing “senior management group” and “director group” from MAS Notices 643 and 643A.



Proceed with the indirect controller group, but require that RPT requirements be applied to that group only upon the bank becoming aware of an indirect controller.



Apply the tightened scope of intragroup exclusions prospectively, so that ongoing transactions relying on the existing exclusion will not be subject to the RPT governance requirements until the transaction is renewed by the bank or its terms and conditions are materially changed.



Require a one-time update to a bank’s board or authorised person on all intragroup transactions with no specified end date or no fixed duration that continue to rely on the existing exclusion, within six months from the effective date of the Notice amendments.



Retain the existing exemption such that certain RPTs with non-subsidiary MSEs (as defined below) do not require prior board approval.



Implement the RPT limit framework as proposed, save that it will not introduce the “connected related party group” in MAS Notice 643, and will instead amend paragraph 14 of that Notice to require banks to constitute related party groups around their Specified Persons (as defined below).



Retain disaggregation of exposures only for the substantial shareholder group and major stake entity group, with requests to disaggregate exposures considered case by case.

Banks | Related Party Transaction Requirements

© WongPartnership LLP

DISCLAIMER: This update is intended for your general information only. It is not intended to be, nor should it be, regarded as or relied upon as legal advice. Court decisions referred to herein may be subject to further appeal at the time of publication, and subsequent developments in the law, including new legislation, amendments, court decisions or practice directions, may affect the accuracy or relevance of the matters discussed. We are under no duty to update this publication to reflect any such changes in the law. You should consult a qualified legal professional before taking any action or omitting to take action in relation to matters discussed herein.

WongPartnership LLP (UEN: T08LL0003B) is a limited liability law partnership registered in Singapore under the Limited Liability

Partnerships Act 2005.

We set out the highlights of the Response below.

Definition of Related Parties

Extended senior management group and extended director group

MAS consulted on the proposed expansion of the definitions of “senior management group” and “director group” to capture persons who can exert significant influence over the bank’s executive officers or directors, by introducing the definitions of “extended senior management group” (ESMG) and “extended director group” (EDG). The existing “senior management group” and “director group” definitions were to be retained.

Following feedback, MAS will:

(a)

Revise the approach for how banks may comply with the introduction of ESMG and EDG. MAS will require a person to be included in the ESMG and EDG only when: (i) MAS is of the opinion that that person is in such a position and designates that person as such; or (ii) the bank has reasonable grounds, based on credible information it is aware of, to believe that a person is in a position to exert significant influence on the executive officer or director in a way that may affect how that person discharges his or her bank duties. All other persons need not be considered for inclusion in the ESMG or the EDG. As part of banks’ compliance controls, they can continue to rely on annual declarations by executive officers and directors to identify such persons.

(b)

Remove the existing definition of “senior management group” and “director group” from MAS

Notices 643 and 643A.

Indirect controller group

MAS consulted on a proposed new “indirect controller group” for Singapore-incorporated banks, comprising indirect controllers of the bank together with their family members and affiliates. To facilitate banks’ implementation, it was proposed that the definition of “indirect controller” would be aligned with that in section 15B of the Banking Act 1970 (Banking Act), which banks are already familiar with.

In response to feedback that the indirect controller group may overlap with the ESMG and EDG, MAS agrees that there may be significant overlap, but notes that the two groups are not identical. The indirect controller group is still required because it captures persons who are in a position to influence the bank’s overall direction and policies, e.g., by directing how the board as a whole acts, without necessarily

At a glance



Require banks to submit MAS Notice 643A Appendix 1 semi-annually, aligned with draft Appendix 9.



Extend the implementation timeline to 12 months from the issuance of the Notices, with requests for additional time considered case by case.

© WongPartnership LLP

DISCLAIMER: This update is intended for your general information only. It is not intended to be, nor should it be, regarded as or relied upon as legal advice. Court decisions referred to herein may be subject to further appeal at the time of publication, and subsequent developments in the law, including new legislation, amendments, court decisions or practice directions, may affect the accuracy or relevance of the matters discussed. We are under no duty to update this publication to reflect any such changes in the law. You should consult a qualified legal professional before taking any action or omitting to take action in relation to matters discussed herein.

WongPartnership LLP (UEN: T08LL0003B) is a limited liability law partnership registered in Singapore under the Limited Liability

Partnerships Act 2005.

exerting influence over any specific director or executive officer, and hence would not be caught under the ESMG or EDG.

Following feedback, and recognising the practical challenges of identifying indirect controllers, MAS will, to facilitate banks’ implementation of the indirect controller group, only require banks to apply RPT requirements to the indirect controller group upon becoming aware of an indirect controller of the bank.

This is consistent with the existing approach taken for other requirements pertaining to indirect controllers, such as that under section 15E(6) of the Banking Act. MAS does not expect banks to adopt identification practices that go beyond those currently applied.

Excluded Transactions from RPT Governance Requirements

MAS consulted on tightening the scope of excluded intragroup transactions so that exclusions only apply to transactions with entities that are part of a bank group or holding company group that is subject to minimum prudential standards and consolidated supervision by a bank regulatory agency.

Scope of the intragroup exclusion

MAS will proceed as proposed. Following requests for clarification, MAS has confirmed that the exclusion from RPT governance requirements applies to transactions with entities within the bank group, parent bank group, or holding company group, provided the holding company is subject to minimum prudential standards, including risk-based capital standards and liquidity standards, and consolidated supervision by MAS or, for a foreign-headquartered bank, an equivalent bank regulatory agency of the home jurisdiction. Non-exhaustive examples of related entities classified by eligibility to rely on the intragroup exclusion are set out in Table 1 of the Response. Banks should assess each related entity against the criteria set out in MAS Notice 643.

Prospective application and one-time board update

MAS has also confirmed that the tightened scope will apply prospectively and not retrospectively.

Ongoing intragroup transactions that currently rely on the existing exclusion will not be subject to the

RPT governance requirements until the transaction is renewed by the bank, or its terms and conditions are materially changed. MAS expects banks not to frontload intragroup transactions solely to benefit from the existing exclusion, and will enforce this on a supervisory basis. The exclusion applies only to RPT governance requirements; banks must continue to comply with the relevant limits on exposures, which are ongoing requirements.

MAS will, however, require banks to provide, within six months from the effective date of the Notice amendments, a one-time update to their boards or authorised persons (as the case may be for banks incorporated outside Singapore), on all intragroup transactions that have no specified end date, or otherwise have no fixed duration, and that continue to rely on the existing exclusion. The board or authorised person should satisfy itself that it remains appropriate for these transactions to continue on an open-ended basis and, where it is not satisfied, take appropriate action, including considering whether to impose an end date or renegotiate the terms of the transaction.

© WongPartnership LLP

DISCLAIMER: This update is intended for your general information only. It is not intended to be, nor should it be, regarded as or relied upon as legal advice. Court decisions referred to herein may be subject to further appeal at the time of publication, and subsequent developments in the law, including new legislation, amendments, court decisions or practice directions, may affect the accuracy or relevance of the matters discussed. We are under no duty to update this publication to reflect any such changes in the law. You should consult a qualified legal professional before taking any action or omitting to take action in relation to matters discussed herein.

WongPartnership LLP (UEN: T08LL0003B) is a limited liability law partnership registered in Singapore under the Limited Liability

Partnerships Act 2005.

Prior board approval for non-subsidiary major stake entities

Following requests for clarification on the consequential impact on the prior board approval exemption for transactions with non-subsidiary major stake entities (MSEs) under paragraph 30 of MAS Notice 643,

MAS has confirmed that it will retain the existing exemption such that certain RPTs with non-subsidiary

MSEs do not require prior board approval. All other RPT requirements will apply, including the requirement that such transactions remain at arm’s length. However, where a non-subsidiary MSE also falls within another related party group, such that transactions could be influenced as a result of that relationship, the bank must classify the MSE under that other group and apply the governance requirements applicable to that group, including the prior board approval requirement.

Limits on Exposures from RPTs

MAS consulted on introducing a related party exposure limit framework for Singapore-incorporated banks under MAS Notice 643 (RPT limit framework) to replace existing exposure limits on related party groups currently set out in MAS Notice 656. It also proposed exposure limits on new related party groups not previously subject to standalone limits and the introduction of a new “connected related party group”

to capture persons specified by MAS (Specified Persons) and their connected persons. MAS proposed to adopt MAS Notice 656’s current approach to measuring exposures, applying disaggregation criteria, and exempting exposures.

RPT limit framework and connected related party group

Following feedback, MAS will not introduce the “connected related party group”, but will implement the rest of the RPT limit framework as proposed. MAS noted that its original intent, being to capture

Specified Persons and their connected persons as a single group, can instead be achieved by amending paragraph 14 of MAS Notice 643 to require banks to constitute related party groups around their

Specified Persons. Exposures to related parties and other connected persons meeting the definition of connected counterparty group in MAS Notice 656, which has a similar-sounding name but refers to a totally different concept, must continue to be aggregated and subject to the large exposures limit.

Disaggregation of exposures

MAS will retain the existing scope of allowing disaggregation of exposures only for substantial shareholder group and major stake entity group. If banks face difficulties in complying with the limits for other related party groups, MAS will consider requests to disaggregate exposures on a case-by-case basis.

Reporting of Exposures from RPTs

MAS consulted on consequential amendments to related party exposure reporting under MAS Notice 643A to capture exposures to the new and expanded related party groups, and to incorporate reporting requirements on related party exposure limits being migrated from MAS Notice 656 to MAS Notice 643. It also sought feedback on the proposed changes to the submission timelines and governance of statements for related party exposures.

© WongPartnership LLP

DISCLAIMER: This update is intended for your general information only. It is not intended to be, nor should it be, regarded as or relied upon as legal advice. Court decisions referred to herein may be subject to further appeal at the time of publication, and subsequent developments in the law, including new legislation, amendments, court decisions or practice directions, may affect the accuracy or relevance of the matters discussed. We are under no duty to update this publication to reflect any such changes in the law. You should consult a qualified legal professional before taking any action or omitting to take action in relation to matters discussed herein.

WongPartnership LLP (UEN: T08LL0003B) is a limited liability law partnership registered in Singapore under the Limited Liability

Partnerships Act 2005.

Following feedback that the semi-annual reporting frequency proposed for draft Appendix 9 differed from the quarterly frequency of the existing reporting statement under MAS Notice 643A (Appendix 1), and that this presented operational challenges, MAS will require all banks to submit Appendix 1 semi-annually, aligned with the reporting frequency for draft Appendix 9.

Implementation Timeline

MAS proposed that the amendments to the Notices take effect from 30 November 2026, or at least six months from the issuance of the revised Notices, whichever is later.

Following feedback requesting a longer implementation period of between nine and 18 months, MAS will extend the implementation timeline to 12 months from the issuance of the Notices. Banks facing specific impediments and requiring additional time beyond the 12-month period may write to MAS with supporting justifications, and MAS will consider their requests on a case-by-case basis.

If you would like information and/or assistance on the above or any other area of law, you may wish to contact the Partner at WongPartnership whom you normally work with or any of the following Partners:

Elaine CHAN

Co-Head – Financial Services Regulatory

TIAN Sion Yoong

Partner – Financial Services Regulatory

CHAN Jia Hui

Partner – Financial Services Regulatory

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