Bail-In

Statutory Bail-in

Under Division 6 of Part 8 of the FSM Act, the MAS has statutory bail-in powers to write down or convert a financial institution’s debt into equity. The entities subject to the statutory bail-in powers of the MAS were previously limited to Singapore-incorporated banks and Singapore-incorporated bank holding companies but have been extended to include Singapore-incorporated insurers and Singapore-incorporated insurer holding companies with effect from 31 December 2024 (each a “Division 6 FI”). The classes of instruments subject to the statutory bail-in powers of the MAS are provided under regulation 28 of the RFI Regulations. For Singapore-incorporated banks and Singapore-incorporated bank holding companies, the classes of instruments subject to the bail-in include:

(i) any equity instrument or other instrument that confers or represents a legal or beneficial ownership in the Division 6 FI, except an ordinary share;

(ii) any unsecured liability or other unsecured debt instrument that is subordinated to unsecured creditors’ claims of the Division 6 FI that are not so subordinated; and

(iii) any instrument that provides for a right for the instrument to be written down, cancelled, modified, changed in form or converted into shares or another instrument of ownership, when a specified event occurs,

but do not include any instrument issued before 29 November 2018 or a derivatives contract as defined in regulation 9(2) of the RFI Regulations.

In the event of bail-in, all shareholders’ voting rights on matters which require shareholders’ approval will be suspended until the Minister has published a notice in the Gazette that the moratorium ceases to apply.