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Government Investigations in Singapore 2025
We have contributed the Singapore chapter of Getting the Deal Through, Government Investigations 2025.
Following much speculation, Commissioner Hayne’s final report in the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in Australia was released to the public yesterday.
As predicted, Hayne has delivered a lengthy report and a comprehensive set of recommendations. These will be the subject of intense scrutiny by all stakeholders in the weeks ahead.
Hayne has re-emphasised the underlying “six norms of conduct” he identified in his interim report. These principles inform his responses to the issues that span the various sectors of the financial services industry:
Hayne has also framed four key questions which he seeks to answer in his recommendations. These include: how the law can be simplified, how to approach conflicts of interest, and how to improve the effectiveness of regulators. Importantly, he also asks what more can be done to achieve effective leadership, good governance and appropriate culture so that entities comply with the six norms of conduct.
Hayne acknowledges that because primary responsibility for misconduct lies with financial services entities and those that manage and control them, effective leadership, good governance and appropriate culture are fundamentally important.
"...every financial services entity, whether examined in a case study or not, must look at its own conduct and the way in which it governs itself"
Specifically, Recommendation 5.6 underscores the fundamentals of effective risk management. Hayne recommends that as often as possible financial services entities should take proper steps to assess culture and governance, identify and deal with problems and determine whether changes made have been effective.
He also emphasises that regulators have an important role in supervising these matters. He notes that regulatory supervision must extend beyond financial risks to non-financial risks, and attention must be paid to culture, governance and remuneration.
Commissioner Hayne’s recommendations to strengthen the Australian regulatory model reflect this view. These include an approach to enforcement that asks ASIC to start with the question of whether a court should determine the consequences of a contravention; proposes that APRA builds a supervisory program focussed on building culture that mitigates the risk of misconduct; and recommends co-regulation and co-ordination between APRA and ASIC, and greater accountability of both agencies to a new oversight body.
Hayne comments that, until recently, too little attention has been given in Australia to regulatory compliance and conduct risk. Reputational consequences clearly demonstrate the pressing urgency for dealing with these issues.
Financial services firms will undoubtedly be continuing efforts already underway to address these risks, as well as preparing for legal and regulatory reform and an increased focus on enforcement. As organisations reflect on the further tasks ahead and focus on reducing the risk of misconduct in future, an additional observation of Hayne is instructive:
"Culture, governance and remuneration march together. Improvements in one area will reinforce improvements in others; inaction in one area will undermine progress in others."
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We have contributed the Singapore chapter of Getting the Deal Through, Government Investigations 2025.
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The private credit market and direct lending have grown and diversified immensely in the past decade, offering alternative sources and terms of debt compared to those historically provided by the syndicated leveraged loan and public issuance markets. Consequently, they are fast becoming pivotal components in the capital ecosystem, so much so that the Bank of England consider that the private credit market is currently responsible for approximately $1.8 trillion of debt issuance, which is four times its size in 2015. This growth has been particularly pronounced in Europe and the US but there has also been significant activity in Asia.
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The EU’s Artificial Intelligence Regulation, commonly referred to as the AI Act, is expected to come into force during the summer of 2024 (the AI Act). The AI Act will be the first comprehensive legal framework for the use and development of artificial intelligence (AI), and is intended to ensure that AI systems developed and used in the EU are safe, transparent, traceable, non-discriminatory and environmentally friendly.
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