Statute Details
- Title: Financial Holding Companies (Levy) Regulations 2023
- Act Code: FHCA2013-S576-2023
- Legislation Type: Subsidiary legislation (SL)
- Authorising Act: Financial Holding Companies Act 2013
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Enacting Provision: Section 59(1) of the Financial Holding Companies Act 2013
- Citation: No. S 576 of 2023 (SL 576/2023)
- Commencement: 22 August 2023
- Status: Current version as at 27 March 2026
- Key Provisions (from extract): Section 2 (Definitions); Section 3 (Annual levy)
What Is This Legislation About?
The Financial Holding Companies (Levy) Regulations 2023 (“FHC Levy Regulations”) set out how an annual levy is calculated and paid by “designated financial holding companies” under the Financial Holding Companies Act 2013 (“FHC Act”). In practical terms, the Regulations translate the FHC Act’s levy framework into a concrete charging mechanism: they define the “relevant sum” (a measure tied to consolidated total assets) and prescribe the levy amount based on thresholds.
MAS uses this levy regime as part of the broader supervisory and regulatory architecture for financial holding companies. The levy is intended to support the regulatory system by requiring designated financial holding companies to contribute annually, with the amount calibrated to the size of the group as reflected in consolidated financial statements.
Although the Regulations are relatively short, they are operationally important. They determine (i) what figure MAS will use to measure group size, (ii) how the levy amount is tiered, and (iii) how the levy is prorated for partial-year situations—both for companies designated before the Regulations’ commencement date and for those designated on or after 22 August 2023.
What Are the Key Provisions?
1. Definitions that drive the levy calculation (Section 2)
The Regulations’ definition section is the engine of the charging mechanism. It defines terms such as “consolidated financial statements” and “consolidated total assets”, and—most importantly—defines “relevant sum” in relation to a designated financial holding company.
The “relevant sum” is essentially the consolidated total assets figure that MAS will use. However, the Regulations do not simply point to “the latest accounts” in a generic way. Instead, they specify different pathways depending on (a) whether the designated financial holding company has a Singapore bank subsidiary or a Singapore licensed insurer subsidiary, and (b) which year’s levy is being calculated (2023 versus later years).
2. How “relevant sum” is determined for the 2023 levy (Section 2(a))
For the annual levy payable for 2023, the Regulations distinguish three cases:
- Bank subsidiary incorporated in Singapore: If the designated financial holding company has a subsidiary that is a bank incorporated in Singapore, and that subsidiary provided MAS in 2022 with the designated financial holding company’s audited consolidated financial statements in accordance with “MAS Notice 609”, then the relevant sum is the consolidated total assets specified in those financial statements.
- Licensed insurer subsidiary incorporated/formed/established in Singapore: If the designated financial holding company has a subsidiary that is a licensed insurer incorporated, formed or established in Singapore, and the designated financial holding company provided MAS in 2022 with its audited consolidated financial statements in accordance with a direction under section 28(3) of the MAS Act (as in force immediately before 30 June 2022), then the relevant sum is the consolidated total assets specified in those financial statements.
- Other cases: In any other case, the relevant sum is the consolidated total assets specified in the latest consolidated financial statements for that designated financial holding company, provided to MAS in accordance with a notice issued under section 3(1) of the FHC Act (excluding MAS Notice FHC-N609 and MAS Notice FHC-N129).
3. How “relevant sum” is determined for levies after 2023 (Section 2(b))
For an annual levy payable for a year other than 2023, the Regulations again use three cases, but the timing of the relevant financial statements shifts to the “year preceding the year for which the annual levy is to be paid”.
- Bank subsidiary incorporated in Singapore: If the designated financial holding company’s bank subsidiary provided MAS in the preceding year with the designated financial holding company’s audited consolidated financial statements in accordance with “MAS Notice FHC-N609”, then the relevant sum is the consolidated total assets specified in those financial statements.
- Licensed insurer subsidiary: If the designated financial holding company’s licensed insurer subsidiary provided MAS in the preceding year with audited consolidated financial statements in accordance with “MAS Notice FHC-N129”, then the relevant sum is the consolidated total assets specified in those financial statements.
- Other cases: Otherwise, the relevant sum is the consolidated total assets specified in the latest consolidated financial statements provided to MAS under a notice issued under section 3(1) of the FHC Act, excluding MAS Notice FHC-N609 and MAS Notice FHC-N129.
4. The levy amount and threshold (Section 3(1))
Section 3(1) sets the actual levy payable for a year, for the purposes of section 9(1) of the FHC Act. The levy is tiered based on the “relevant sum”:
- If the relevant sum is less than $70 billion, the annual levy is $55,000.
- If the relevant sum is $70 billion or more, the annual levy is $210,000.
This threshold-based structure is straightforward, but it places significant importance on the correct identification of the “relevant sum” and the correct consolidated total assets figure in the relevant audited consolidated financial statements. For practitioners, this is where disputes are most likely to arise: not in the arithmetic of the levy amount, but in which financial statements MAS will treat as the basis for the relevant sum.
5. Proration for partial-year situations (Sections 3(2) and 3(3))
The Regulations include two proration rules to ensure fairness when a company is designated partway through the year or when the levy regime begins mid-year.
(a) Designated before 22 August 2023 (Section 3(2))
Where a designated financial holding company is designated as such before 22 August 2023, the annual levy payable for 2023 is derived from a formula that prorates the annual levy based on the number of days between 22 August 2023 and 31 December 2023 (inclusive). The formula uses:
- A = number of days between 22 August 2023 and 31 December 2023 (inclusive); and
- B = the annual levy that would be payable for 2023 under Section 3(1), but for this proration paragraph.
(b) Designated on or after 22 August 2023 (Section 3(3))
Where a designated financial holding company is designated on or after 22 August 2023, the annual levy for the “designation year” is prorated based on the number of days from the date of designation to 31 December of that year (inclusive). The Regulations address whether the designation year has 365 or 366 days, using two parallel formulas.
- A = number of days between the date of designation and 31 December (inclusive).
- B = the annual levy that would be payable for the designation year under Section 3(1), but for the proration.
For legal and compliance teams, these proration provisions are critical for budgeting and for ensuring that internal calculations align with MAS’s statutory method. They also matter for timing: the “designation date” is the anchor for the proration, not the date of financial year-end or the date of submission of consolidated financial statements.
How Is This Legislation Structured?
The FHC Levy Regulations are structured in a compact format typical of subsidiary legislation that implements a specific charging mechanism. The document comprises:
- Section 1 (Citation and commencement): provides the short title and states that the Regulations come into operation on 22 August 2023.
- Section 2 (Definitions): defines key terms, including the “relevant sum” and the MAS notices that determine which audited consolidated financial statements are relevant.
- Section 3 (Annual levy): sets the levy amounts by threshold and provides proration rules for partial-year designation circumstances.
Notably, the extract indicates that the Regulations are made by MAS on 20 August 2023, and they operate “for the purposes of” the levy provision in the FHC Act (section 9(1)). This indicates that the Regulations are not a standalone levy regime; rather, they implement the FHC Act’s levy framework.
Who Does This Legislation Apply To?
The Regulations apply to designated financial holding companies—entities that have been designated under the Financial Holding Companies Act 2013. The levy is payable by such companies for each year, subject to the calculation method and proration rules in the Regulations.
In determining the “relevant sum”, the Regulations also focus on the composition of the group, specifically whether the designated financial holding company has a subsidiary that is a bank incorporated in Singapore or a licensed insurer incorporated, formed or established in Singapore. This means that two designated financial holding companies with similar consolidated total assets might still face different compliance pathways depending on which MAS notice regime governs the audited consolidated financial statements used for the levy calculation.
Why Is This Legislation Important?
Although the FHC Levy Regulations are brief, they have direct financial consequences. The difference between the two levy tiers—$55,000 versus $210,000—is substantial. For large groups near the $70 billion threshold, the correct determination of “consolidated total assets” can be decisive.
From an enforcement and compliance perspective, the Regulations also embed a reliance on MAS’s notice-based reporting framework. The “relevant sum” is tied to audited consolidated financial statements provided under specific MAS notices (MAS Notice 609, MAS Notice FHC-N609, MAS Notice FHC-N129) or under specified directions and notices under the FHC Act. Practitioners should therefore treat the levy calculation as a downstream consequence of upstream reporting compliance: the levy outcome depends on which reporting channel MAS recognizes as the basis for the audited consolidated financial statements.
Finally, the proration provisions are important for governance and internal controls. Designation timing affects the levy payable for the year of designation and for 2023 (given the commencement on 22 August 2023). Legal teams advising on corporate structuring, group reorganisations, or timing of designation should account for these rules to avoid under- or over-provisioning.
Related Legislation
- Financial Holding Companies Act 2013 (including section 9(1) and section 59(1))
- Banking Act 1970 (MAS Notice 609 issued under sections 26 and 58)
- Companies Act 1967 (definition of “consolidated total assets” via section 209A)
- Monetary Authority of Singapore Act 1970 (direction under section 28(3) as in force immediately before 30 June 2022)
Source Documents
This article provides an overview of the Financial Holding Companies (Levy) Regulations 2023 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.