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)
- Key Enabling Provision: Section 59(1) of the Financial Holding Companies Act 2013
- Commencement: 22 August 2023
- Legislative Instrument Number: No. S 576
- Parts / Structure: Short regulations comprising (i) citation and commencement, (ii) definitions, and (iii) annual levy
- Key Sections in the Extract: Section 2 (Definitions); Section 3 (Annual levy)
- Related Notices Referenced: MAS Notice 609 (Banking Act 1970); MAS Notice FHC‑N129 and MAS Notice FHC‑N609 (Financial Holding Companies Act 2013)
What Is This Legislation About?
The Financial Holding Companies (Levy) Regulations 2023 (“FHC Levy Regulations”) set out how MAS calculates and imposes an annual levy on “designated financial holding companies” under the Financial Holding Companies Act 2013 (“FHC Act”). In plain terms, the Regulations translate the levy concept in the FHC Act into a practical charging mechanism: they define what financial figure is used to determine the levy and specify the levy amounts and pro-rating rules.
The levy is not a general corporate tax. It is a targeted regulatory funding mechanism linked to the scale of the designated financial holding company’s consolidated financial position. The Regulations therefore focus heavily on (i) how to measure the “relevant sum” (primarily consolidated total assets), and (ii) how to convert that measurement into a fixed annual levy amount.
Although the Regulations are short, they are operationally important for compliance planning. Designated financial holding companies need to know (a) which consolidated financial statements MAS will accept for levy calculation, (b) which threshold applies (notably the $70 billion consolidated total assets threshold), and (c) how the levy is adjusted when designation occurs part-way through a year.
What Are the Key Provisions?
1. Citation and commencement (Regulation 1)
Regulation 1 provides that the FHC Levy Regulations are the “Financial Holding Companies (Levy) Regulations 2023” and that they come into operation on 22 August 2023. This commencement date matters because the Regulations contain special pro-rating rules for the year 2023 and for designation occurring after the commencement date.
2. Definitions and the “relevant sum” (Regulation 2)
The core compliance concept is the “relevant sum” in relation to a designated financial holding company. Regulation 2 defines “relevant sum” by reference to consolidated total assets (or a value specified in audited consolidated financial statements). The definition is structured to address different types of subsidiaries and different reporting regimes depending on the year.
For annual levy payable for 2023, the “relevant sum” is determined as follows:
- Bank subsidiary incorporated in Singapore: if the designated financial holding company has such a bank subsidiary and provided MAS with audited consolidated financial statements in accordance with MAS Notice 609, the relevant sum is the value of consolidated total assets specified in those financial statements.
- Licensed insurer subsidiary incorporated, formed or established in Singapore: if the designated financial holding company has such an insurer subsidiary and provided MAS with audited consolidated financial statements in accordance with a direction issued under section 28(3) of the Monetary Authority of Singapore Act 1970 (as in force immediately before 30 June 2022), the relevant sum is the value of consolidated total assets specified in those financial statements.
- Other cases: the relevant sum is the value of consolidated total assets specified in the latest consolidated financial statements provided to MAS under a notice issued under section 3(1) of the Act (subject to the specific exclusions described in the definition).
For annual levy payable for a year other than 2023, the definition shifts to the MAS notices that are commonly known as MAS Notice FHC‑N609 (for bank subsidiaries) and MAS Notice FHC‑N129 (for licensed insurer subsidiaries). In those cases, the relevant sum is again the consolidated total assets value specified in the audited consolidated financial statements provided under those notices. For other cases, the relevant sum is taken from the latest consolidated financial statements provided under section 3(1) notices, excluding the specific notices FHC‑N609 and FHC‑N129.
Practical significance: Regulation 2 effectively tells practitioners which reporting package and which MAS notice framework will be used to compute the levy. This is crucial where a group’s reporting arrangements have changed over time, or where the designated financial holding company has both banking and insurance subsidiaries, or where the group falls into the “other cases” category.
3. Annual levy amounts and thresholds (Regulation 3(1))
Regulation 3(1) provides the fixed levy amounts based on the relevant sum (consolidated total assets):
- If the relevant sum is less than $70 billion: the annual levy payable is $55,000.
- If the relevant sum is $70 billion or more: the annual levy payable is $210,000.
This is a two-tier charging structure. The Regulations do not create a sliding scale; instead, they apply a binary threshold. For groups near the $70 billion mark, the precise consolidated total assets figure in the relevant audited consolidated financial statements becomes determinative.
4. Pro-rating rules for partial years (Regulation 3(2) and 3(3))
The Regulations recognise that the levy is annual but designation and commencement may not align with calendar years. Accordingly, they contain pro-rating mechanisms.
(a) Designated before 22 August 2023: levy for 2023 (Regulation 3(2))
Where a designated financial holding company was designated as such before 22 August 2023, the annual levy payable for 2023 is derived from a formula that uses:
- A: the number of days between 22 August 2023 and 31 December 2023, inclusive; and
- B: the annual levy amount that would otherwise be payable for 2023 under Regulation 3(1) (but for the pro-rating paragraph).
(b) Designated on or after 22 August 2023: levy for the designation year (Regulation 3(3))
Where a designated financial holding company is designated on or after 22 August 2023, the levy for the designation year is pro-rated based on the number of days from the date of designation to 31 December of that year. The Regulations distinguish between:
- 365-day years and
- 366-day years
In each case, the formula uses:
- A: the number of days between the date of designation and 31 December (inclusive); and
- B: the annual levy amount that would be payable for that designation year under Regulation 3(1) (but for the pro-rating paragraph).
Practical significance: These pro-rating rules reduce the levy burden for partial-year designation and ensure consistency with the Regulations’ commencement date. For compliance teams, the key is to identify the date of designation (for Regulation 3(3)) and to confirm whether the designation occurred before or after 22 August 2023 (for Regulation 3(2)).
How Is This Legislation Structured?
The FHC Levy Regulations are structured as a concise set of provisions:
- Regulation 1 (Citation and commencement): establishes the name of the Regulations and the commencement date (22 August 2023).
- Regulation 2 (Definitions): defines key terms, especially “consolidated financial statements,” “consolidated total assets,” and the central concept “relevant sum,” which is tied to audited consolidated financial statements and specific MAS notices.
- Regulation 3 (Annual levy): sets the levy amounts based on the relevant sum and provides pro-rating formulas for 2023 and for the year of designation.
There are no additional parts in the extract; the Regulations are designed to be read alongside the FHC Act, which contains the substantive framework for designation and the levy power.
Who Does This Legislation Apply To?
The Regulations apply to designated financial holding companies under the Financial Holding Companies Act 2013. In practice, this means corporate groups that MAS has designated as financial holding companies for regulatory purposes. The levy is “payable by a designated financial holding company” for a year, subject to the Regulations’ calculation rules.
While the Regulations do not list categories of companies directly, their definitions indicate that the levy calculation depends on the designated financial holding company’s subsidiary composition—particularly whether it has (i) a bank incorporated in Singapore or (ii) a licensed insurer incorporated, formed or established in Singapore. The “other cases” limb ensures coverage for designated financial holding companies that do not fit those two subsidiary categories.
Why Is This Legislation Important?
Although the FHC Levy Regulations impose fixed levy amounts, they are important because they determine the amount payable and the basis for calculation. For practitioners advising designated financial holding companies, the Regulations affect budgeting, governance, and the compliance workflow for producing or submitting audited consolidated financial statements under the relevant MAS notice regime.
The Regulations also have a compliance “interface” with multiple primary and subsidiary legal instruments. The definition of “relevant sum” references MAS notices issued under the Banking Act 1970 and under the FHC Act. This means that legal advice on levy compliance cannot be siloed: it requires understanding how MAS notices define reporting and how those reporting outputs translate into the consolidated total assets figure used for levy thresholds.
Finally, the pro-rating provisions are operationally significant. They require careful attention to the designation date and to the Regulations’ commencement date. A misinterpretation of whether the company was designated before or after 22 August 2023 could lead to incorrect levy calculations and potential disputes with MAS. For groups undergoing corporate restructuring or changes in designation status, these timing rules are often the difference between a correct and an incorrect levy assessment.
Related Legislation
- Financial Holding Companies Act 2013
- Banking Act 1970 (MAS Notice 609 reference)
- Companies Act 1967 (definition of “consolidated total assets” via section 209A reference)
- Monetary Authority of Singapore Act 1970 (direction under section 28(3) reference for 2023 insurer-related limb)
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.