5 Types of Financial Institutions in Singapore
A system with strict supervision and robust financial regulations have seen Singapore undergo a consistently successful trend in her financial sector. The regulatory body MAS has been striving to establish high class standards. This has enable investors to manage risks effectively while promoting innovation. The regulations are also suppose to emphasize the need for sustainable development plans. This is to ensure that it is stable and consistent for the entire financial service division. The flocking of global investors and the coming of major financial global financial institutions to Singapore can attribute to the existence of over 1200 financial institutions. They have been offering top notch qualities and services on various asset classifications and thus kept her on the consistent trend.
The financial institutions include the following:
1. Commercial Banks
Commercial Banks offer deposit taking, lending and cheque service provision on a commercial or universal banking scale. They may also enter into other businesses like financial advisory or insurance brokering which have to be authorized and regulated by MAS. The Banking Act however, prohibits them from entering in non financial activities
2. Merchant Banks
Merchant Banks engage in corporate finance, mergers and accusations, share and bond issue underwriting and portfolio investment management. They require the approval of the MAS and also operates under the Banking Act
3. Capital Market Intermediaries
Capital Market Intermediaries provide capital market services under the regulation of the Securities and Futures Act. The Act spells out their activities as securities dealings, future contracts trading, foreign exchange trade that are leverage. In addition, it also includes corporate finance advising and financial management. Furthermore, it also comprised of credit rating and securities financing. They also act as custodians for securities placed under their names.
A money lending company provides loans to individuals and companies. All their loans can be secured or unsecured. This depends on the company itself. However, they do not have the approval to operate in foreign currency. Ministry of Law also prohibits moneylenders from transacting with precious metals or procuring stock denominated in foreign currency. If moneylenders like to expand their operations, they will also need the approval of MAS.
5. Money Changing and Remittance
Operating under the Money Changing and Remittance Business Act, they offer these services but under a close watch by MAS. MAS will notice any suspicious business like money laundering or terrorism financing activities.
Since the financial sector plays a very integral part in the growth and development aspirations of the Singaporean economy, MAS has been vigilant in the attempt to incorporate technology in all these activities. Integration of technology is expected to enhance the efficiency of the financial system, improve lives and promote risk mitigation and management. All of that while creating more opportunities in the economy. With these strategies, Singapore’s ambition to remain at the crest and do better will no doubt be realized.
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