Singapore legislation
Regulation 39
Regulation 39
Risk management of merchant bank
Subregulation 1
A merchant bank must, in a manner that is commensurate with the nature, scale and complexity of its business —
implement effective internal controls to regularly identify, measure, evaluate, monitor, report and control risks associated with the business activities of the merchant bank;
ensure that compliance of the merchant bank with the internal controls mentioned in sub‑paragraph (a) is audited by an internal audit process of the merchant bank;
where any officer, committee, sub‑committee or group of persons has a discretionary power to commit the merchant bank to any financial undertaking or to expose the merchant bank to any business risk —
establish limits on the discretionary power that are appropriate, having regard to the business activities of the merchant bank; and
set out the limits mentioned in sub‑paragraph (i) in writing; and
keep documentation sufficient to demonstrate —
compliance by the merchant bank with the internal controls mentioned in sub‑paragraph (a); and
compliance by each officer, committee, sub‑committee or group of persons who has a discretionary power with the limits mentioned in sub‑paragraph (c)(i).
Subregulation 2
A merchant bank that contravenes paragraph (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 and, in the case of a continuing offence, to a further fine of $25,000 for every day or part of a day during which the offence continues after conviction.