The Monetary Authority of Singapore has awarded 'Significantly Rooted Foreign Bank' privileges to Standard Chartered Bank (Singapore) Ltd, allowing it to operate additional places of business. The British-owned bank is the first to qualify as an SRFB. It only classifies people as its priority private clients if they maintain account balances of more than S$1.5 million.

The MAS will also change its SRFB rules so that it can award additional privileges to an SRFB that substantially exceeds the criteria for "significant rootedness" in Singapore, perhaps allowing it to establish a separate subsidiary to develop alternative business models.

Award of privileges

According to the SRFB rules that appeared in 2012,  Qualifying Full Banks (QFBs) that are significantly rooted in Singapore and from jurisdictions that have free-trade agreements with Singapore are allowed to establish up to 50 places of business, of which up to 35 may be branches. The MAS decides which banks qualify as SRFBs.

The first free-trade agreement that includes SRFB commitments, the EU-Singapore Free Trade Agreement (EUSFTA), came into force on 21 November last year. StanChart is now allowed to operate up to 50 places of business.

A wider application of the rules

The MAS will also change its SRFB-related rules to "recognise" SRFBs with a significantly higher degree of "rootedness." In other words, it will consider granting an additional full bank licence to an SRFB that substantially exceeds the SRFB baseline criteria. This will enable the bank the same freedom as Singapore-incorporated banking groups to establish subsidiaries, perhaps with partners in joint ventures, to operate new or alternative business models such as a digital-only bank. In deciding whether the bank substantially exceeds the baseline criteria, the MAS will consider whether it has opted for a "full subsidiarisation of banking business operations" in Singapore, whether a significant proportion of its global key appointment holders and business heads are based in Singapore and whether it has a "firm commitment" to Singapore's financial wellbeing, perhaps by using a good deal of local talent or having a Singaporean as a substantial shareholder.