Shanmugaratnam, who is also minister in charge of MAS, was responding to a question from a non-constituency member of parliament on Wednesday about whether there were rules to prevent the hiring of any category of ex-offenders for positions in financial services.
The deputy PM was also asked how many times in the past 10 years MAS had found any financial institution in breach of the regulator’s ‘fit and proper’ guidelines in their recruitment process and what types of breaches have occurred in those cases
Finally, the MP asked whether MAS is alerted if an individual’s job application is rejected by a financial institution due to their status as an ex-offender.
Industry trust
Shanmugaratnam said: “A critical success factor for the financial industry is the trust that depositors, investors, and policyholders place in financial institutions (FIs). MAS expects employees and representatives of FIs to be fit and proper in order to safeguard the interests of consumers as well as to uphold Singapore’s reputation as a trusted financial centre.
“MAS has no rules against the hiring of ex-offenders for positions in the financial industry,” he said, adding that the regulator has issued guidelines on its expectations and criteria for what it means to be fit and proper.
“To-date, MAS has not found any FIs to be in breach of the due diligence requirements set out in these guidelines.”
Recruitment exceptions
There are, however, two exceptions to the rule that “FIs are responsible for their own hiring decisions and ensuring that the persons they employ are fit and proper” and that FIs do not have “to inform MAS of candidates that they have hired or rejected”.
These include key positions such as chief executive, board directors, and select senior management roles
“FIs are required to seek MAS’ approval for their appointments after assessing them to be fit and proper,” Shanmugaratnam said. “Secondly, FIs are also required to notify MAS before appointing representatives to conduct financial advisory and capital markets activities.”
No automatic rejection
However, for such positions, MAS does not automatically reject an FI’s application just because the candidate is an ex-offender, the deputy PM said.
“MAS’ guidelines also make clear that a candidate who fails to meet any particular criterion is not automatically deemed as being not fit and proper. MAS adopts a proportionate approach which takes into consideration the nature and responsibilities of a person in determining the relative emphasis and standard expected of that person.
“In the case of ex-offenders, MAS would also have regard to the seriousness and circumstances of the offence, the time that has elapsed since their conviction, and the duties and responsibilities to be assumed.”
Prohibition orders
“Like other financial regulators,” Shanmugaratnam continued, “MAS has the power to issue prohibition orders (POs) to prevent persons with serious criminal convictions, such as dishonesty, fraud, and criminal breach of trust, from working in the financial advisory, insurance and capital markets industry for a specified period of time.
“Such actions serve as deterrent, and help to uphold high standards of honesty and integrity in the financial sector. Individuals who have been issued POs may still be considered for positions in the financial industry after the expiry of their POs.”
