[O-SG] Early-October News Highlights: MAS AI Risk Guidelines Take Phased Effect | IP Transfer Gains Exempt, Claw-backs Still Apply

I. Financial Sector

1.1 Singapore issues AI risk management guidelines; financial institutions to comply in phases

On 7 October 2026, the Monetary Authority of Singapore (MAS) issued the Guidelines on Artificial Intelligence Risk Management, setting out its supervisory expectations for financial institutions' use of AI. The Guidelines cover governance and oversight, key risk management policies and processes, controls across the full AI life cycle, and capability and resourcing. They are aligned with existing laws and with the principles of fairness, ethics, accountability and transparency, and apply to locally incorporated financial institutions subject to MAS supervision on a group (consolidated) basis.

The Guidelines define AI as machine-based systems or models that infer, from learned premises, outputs such as predictions, content or decisions; purely rule-based tools fall outside their scope. Institutions are required to implement the Guidelines in a manner proportionate to the scale and risk of their AI use. In view of the financial, operational, conduct, privacy and third-party risks amplified by generative AI and agentic AI, the Guidelines require institutions to establish mechanisms for identification, inventory management and materiality assessment of AI risks, and to put in place controls over data governance, explainability and human oversight.

The Guidelines take effect on 7 October 2027. From that date, financial institutions must meet the requirements in the chapters on governance and oversight and on key risk management policies; the remaining chapters on life-cycle controls and capability must be met by 7 October 2028 at the latest. MAS said it would update the Guidelines from time to time in line with technological developments.

1.2 Singapore private-banking client assets up about 50% over five years

Deputy Prime Minister and MAS Chairman Gan Kim Yong said on 5 October that, over the past five years, private-banking client assets in Singapore had grown by about 50%, with a 15% increase from 2024 to 2025. Geopolitical shifts, advances in AI and a new generation's attitudes to wealth management are reshaping trade, investment and wealth allocation.

To improve the account-opening experience, MAS is working with the Private Banking Industry Group (PBIG) to promote the use of AI and digital tools, to assess clients' sources of wealth on a risk basis and to strengthen practitioner training. PBIG has committed to reducing the median account-opening time at member banks to within one month by the end of 2026; over the past three months, nearly half of the new accounts opened at member banks were completed within one month.

MAS is reviewing the fund tax incentive framework and is considering feedback from single family offices on investment flexibility and capital allocation, including investments such as digital payment tokens and insurance policies. The review will involve updating the “Designated Investment” list that sets out the categories of investments eligible for tax exemption under the fund tax incentive schemes; the updated content and implementation date will be announced in due course.

1.3 MAS keeps monetary policy unchanged; core inflation to stay elevated in the near term

On 14 October 2026, MAS issued its monetary policy statement, deciding to keep unchanged the slope of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) policy band, with no change to the width of the band or the level at which it is centred. MAS had slightly raised the rate of appreciation in July, and the Singapore dollar has since strengthened modestly in the upper half of the policy band.

On the economy, activity among Singapore's major trading partners remained resilient, global AI-related investment continued to support industrial production and trade, and the impact of higher energy costs had so far been contained through inventory drawdown and supportive fiscal measures. Official data showed that GDP grew 5.4% year on year in the third quarter of 2026, and 1.1% quarter on quarter on a seasonally adjusted basis, led mainly by the technology sector, with resilient activity in construction, financial services and real estate.

On inflation, core inflation rose to 2.1% year on year in July and August, up from 1.5% in the second quarter, driven mainly by the pass-through of import costs to a broader range of goods and services, higher electricity and gas tariffs, and still-elevated transport services inflation. Over the same period, food inflation rose from 1.9% to 2.2%, mainly as accumulated cost increases were passed through to consumer prices; services inflation came in below expectations, reflecting enhanced government healthcare subsidies and keener price competition in telecommunications services.

1.4 Commercial cyber insurance not mandatory for public agencies; dispute-resolution centre has capacity to handle claims

On 7 October 2026, MAS published an oral parliamentary reply on commercial cyber insurance. Member of Parliament Yip Hon Weng asked whether public-sector and statutory bodies are required to purchase commercial cyber insurance, whether MAS tracks industry claims and payout trends, and whether the Financial Industry Disputes Resolution Centre (FIDReC) has the capacity to handle related disputes.

In its reply, MAS stated that there is no requirement for public-sector entities, including statutory boards, to purchase commercial cyber insurance. The Government manages cyber risk on multiple fronts by investing resources to strengthen capabilities for prevention, detection, response and recovery.

MAS said that acceptance of cyber insurance as a risk-management tool has increased in Singapore and the region. MAS continues to monitor developments through engagement with the industry in order to support the sound development of the market. FIDReC's adjudicators have the professional capacity to handle disputes involving consumers and small businesses in the financial sector, and receive regular training to keep abreast of emerging issues and industry developments; the Centre has in recent years also handled cyber-insurance claim disputes.

1.5 MAS strengthens oversight of public prospecting; new rules to take effect in 2027

On 12 October 2026, MAS announced enhanced safeguards for public prospecting activities. The changes follow an earlier public consultation on strengthening standards of conduct in this area. Public prospecting refers to financial institutions and their representatives marketing financial products and services in public places, such as through roadshows; when conducted inappropriately, it can expose consumers to unsolicited or persistent solicitation.

Under the new measures, financial institutions may conduct prospecting only within designated areas at commercial premises, and must appoint suitably qualified individuals to oversee their representatives' conduct on site. At the outset of an engagement, representatives must clearly inform consumers of their intention to market financial products or services, and may proceed only after obtaining the consumer's consent. Street canvassing and door-to-door prospecting remain prohibited.

MAS said it would incorporate these measures into the revised Guidelines on Standards of Conduct for Marketing and Distribution Activities, to be issued in 2027, giving financial institutions a nine-month transition period to comply. The move complements the online-advertising safeguards introduced in September 2025 and further clarifies that institutions are expected to treat consumers responsibly.

II. Finance and Tax

1.1 Singapore issues rules on deduction for green certificates and green credits, effective 8 October

On 7 October 2026, Singapore's Ministry of Finance made the Income Tax (Deduction for Expenditure on Green Certificates and Green Credits) Rules 2026. Made under section 7(1) of the Income Tax Act 1947 and signed on 2 October by Ms Ngiam Siew Ying, Second Permanent Secretary (Finance), the Rules take effect on 8 October.

The Rules specify renewable energy certificates and carbon credits as the designated green certificates and green credits respectively. A renewable energy certificate is a certificate representing ownership of the environmental, social or other non-power attributes of a unit of electricity generated from renewable energy (whether within or outside Singapore) and supplied into Singapore. Carbon credits include instruments representing greenhouse-gas emission reductions or removals, emission allowances, and instruments used to meet emissions-related tax or regulatory obligations.

The Rules will be presented to Parliament. Under the Rules, a company's expenditure on purchasing designated green certificates or carbon credits may qualify for an income-tax deduction as prescribed. The Rules are aligned with the definitions of greenhouse gases and carbon credits in the Carbon Pricing Act 2018, and are intended to use tax incentives to encourage businesses to invest in green energy and carbon-reduction projects.

1.2 Capital gains from IP transfer not taxable; certain claw-backs remain payable

On 1 October 2026, the Inland Revenue Authority of Singapore (IRAS) published the summary of Advance Ruling No. 17/2026, addressing whether gains from an intra-group transfer of intellectual property rights (IPR) are taxable under section 10(1) of the Income Tax Act 1947. The ruling involved two group companies: Company A, responsible for operations outside the Asia-Pacific region, and Company B, the Asia-Pacific operating entity, which carried out the relevant manufacturing, marketing and R&D functions and derived income from product sales and IP licensing.

Under the ruling, Company A proposed to buy back from Company B, at market value, the relevant Asia-Pacific IPR, comprising IPR for which five-year writing-down allowances had been claimed under section 19B, as well as other IPR for which no such allowance had been claimed or whose R&D expenditure had already been granted a tax deduction. IRAS held that the transfer was capital in nature, so the gains are not taxable and any losses are not deductible. However, for IPR to which section 19B applies, a claw-back is to be computed on the lower of the transfer price and the capital expenditure incurred on acquisition, and taxed in the year of assessment corresponding to the basis period in which the transfer takes place.

IRAS noted that this treatment took into account the nature of Company B's business after acquiring the IPR, the intra-group restructuring context, and the arrangement under which, following the transfer, Company B would no longer own the IPR or serve as the Asia-Pacific business hub, ultimately becoming a dormant company. The section 19B claw-back is governed by section 19B(5) and subject to section 19B(10J). The ruling is binding only on the applicant and the specific transaction concerned; other taxpayers should not assume that similar transactions will necessarily receive the same tax treatment.

1.3 IRAS clarifies tax characterisation of preference shares; qualifying dividends may be exempt

On 1 October 2026, IRAS published the summary of Advance Ruling No. 16/2026, clarifying the income-tax treatment of redeemable, non-convertible, non-cumulative, participating and non-voting preference shares. The ruling concerned whether, after Singapore Company A issues such preference shares to a subscriber, they should be classified as an equity instrument for Singapore income-tax purposes, and whether dividends subsequently received by the subscriber can enjoy tax exemption.

According to the summary, Company A and the subscribers, Company B and Company C, are all incorporated in Singapore and are Singapore tax residents, and are principally engaged in investment holding; B and C are also shareholders of A. The preference shares have no maturity date and are redeemable only at Company A's discretion; dividends are at the company's discretion, payable only out of distributable profits and non-cumulative. On liquidation the preference shares rank equally with ordinary shares and share in surplus profits and assets; holders generally have no voting rights and the shares must be transferred together with the ordinary shares.

IRAS ruled that the preference shares are an equity instrument for Singapore income-tax purposes and that the distributions are to be treated as dividends. As the dividends are paid by a Singapore tax-resident company, dividends received by the subscribers may be exempt under section 13(1)(za) of the Income Tax Act 1947. IRAS also reminded that an advance ruling summary is binding only on the applicant and the specific transaction concerned, and that other taxpayers should not assume that similar transactions will necessarily receive the same tax treatment.

III. Others

1.1 EnterpriseSG to invest S$120 million over five years to support SME innovation

Enterprise Singapore (EnterpriseSG) has announced that, over the next five years, it will invest up to S$120 million to strengthen its network of innovation centres, supporting SMEs in developing new products and bringing them to market. On 7 October, EnterpriseSG said it would consolidate the innovation centres from 27 to 10, and take over functions previously provided by the Intellectual Property Intermediary (IPI), such as technology scouting and matching, to simplify SMEs' access to support.

Following the consolidation, IPI will cease operations on 31 March 2027. EnterpriseSG said it is working to redeploy affected IPI staff to the strengthened innovation centres, the public service and the wider innovation ecosystem. All staff at the affected innovation centres are on project-linked fixed-term contracts, and the authorities will offer them positions at institutes of higher learning to complete ongoing projects or take on other suitable roles.

The authorities noted that, as innovation grows more complex, SMEs increasingly need expertise spanning different players and stages of the ecosystem. The investment will enhance the innovation centres across four areas: technology scouting, technology adoption, ecosystem connection, and outreach and industry engagement.

1.2 MNCs join hands with Singapore enterprises to tap Asia: collaboration dividends gather pace

The Singapore Economic Development Board (EDB) noted that collaboration between multinational corporations (MNCs) and local enterprises helps build business capabilities, strengthen supply-chain resilience and expand into overseas markets. In the first half of 2026, global companies including Viatris, Maersk, Mindray, Revolut, NVIDIA and Quantinuum expanded or established operations in Singapore. Singapore's roughly 370,000 SMEs, around 4,500 tech start-ups, and a research network that includes 78 public research institutions provide support for MNCs to collaborate with local partners.

A study released by the Ministry of Trade and Industry in November 2025 found that greater interaction between firms and EDB-supported companies helped improve the performance of local, unrelated firms. A 10% increase in exposure was associated with an 8.3% rise in average value added, a 6.2% rise in value added per worker, a 1.5% increase in local employment, and a 1.6% rise in the wages of local employees at non-EDB firms. EDB and EnterpriseSG foster such partnerships through business matching, pilot projects and the Partnerships for Capability Transformation (PACT) programme, and co-share part of the collaboration costs.

Results have materialised across several areas: Pratt & Whitney Component Solutions (PWCS) jointly built electroplating capabilities with local firm Applied Total Control Treatments (ATCT); Sanofi and local deep-tech firm Magorium turned recycled insulin pens into material used to pave 1.5 km of road; and precision-engineering firm Fong's, connected by EDB to Stryker, transitioned into high-end medical-device manufacturing. The collaborations both strengthen supply-chain resilience and help local firms expand their markets.

1.3 Singapore to build digital bunkering data ecosystem; multiple pathways to decarbonise marine fuels

Singapore will build a digital bunkering data ecosystem that captures bunkering data at source and transmits it end-to-end, in a secure manner, to parties across the value chain such as the Maritime and Port Authority (MPA), traders and financiers, reducing intermediary steps and enhancing transaction integrity. Senior Minister of State for Transport Murali Pillai announced the move on 14 October at the 24th Singapore International Bunkering Conference, against the backdrop of Singapore's goal of achieving net-zero greenhouse-gas emissions by 2050.

The system is part of the second phase of the digital bunkering programme, building on the first phase's digitalisation of electronic bunker delivery notes. Since 1 April 2025, all bunker suppliers in the Port of Singapore have been required to provide digital bunkering services. MPA will launch a call for proposals in November to support the second-phase pilot, in which licensed bunker tanker operators may participate in partnership with technology providers.

Singapore is also advancing a multi-fuel strategy: it is exploring the use of liquefied biomethane as a marine fuel, developing ammonia as a fuel and conducting its first ethanol bunkering trial. Liquefied natural gas bunker sales reached a record 570,000 tonnes in 2025, and rose 24% year on year in the first eight months of 2026.

1.4 Singapore tightens online sale of mobility devices, strengthening battery-safety regulation

On 7 October, Singapore's Parliament passed the Land Transport and Related Matters Bill, prohibiting the online sale and advertising of non-compliant active mobility devices and requiring sellers to post the rules and warning notices on product pages. The provisions will take effect in the second quarter of 2027 and apply to online listings and advertisements that originate from Singapore or are posted by Singapore-linked persons and are accessible locally.

The Ministry of Transport said that in 2025 there were 49 fires locally caused by active mobility devices; the new law therefore prohibits the use of non-compliant batteries on power-assisted bicycles, personal mobility devices and mobility scooters. The Land Transport Authority may require sellers to amend or take down non-compliant content; overseas sellers without a Singapore presence fall outside its jurisdiction, with controls at the import stage used instead to reduce fire hazards.

The Bill was passed following debate among Members of Parliament, and also establishes a regulatory sandbox for autonomous vehicles. The authorities expect only a few hundred autonomous vehicles on the roads by the end of 2028, far below the current pool of about 72,000 taxi and private-hire drivers, so there will be no immediate impact on drivers' employment in the near term.

1.5 Singapore releases new cybersecurity strategy, stepping up efforts against emerging cyber threats

On 13 October, Singapore unveiled a new version of the Singapore Cybersecurity Strategy. Speaking at the opening of the Singapore International Cyber Week, Coordinating Minister for National Security and Minister for Home Affairs K Shanmugam said a major shift in the new strategy is a more proactive approach to cyber defence that seeks to detect and block cyber threats earlier, moving the focus of defence from after-the-fact response to a continuous posture.

The Government has established a National Cyber Command Centre as the hub for national cyber-defence operations, strengthening defences by continuously monitoring critical information infrastructure, integrating threat intelligence from multiple sources and deploying AI-driven coordination systems; it is also developing a national protective DNS service that blocks connections before threats reach users, reducing risks such as phishing, scams and malware.

Beyond national cyber defence, the new strategy also covers strengthening the security of critical infrastructure and of cyberspace as a whole, building capabilities to address AI and quantum technologies, deepening international cooperation and nurturing cybersecurity talent. The Singapore Cybersecurity Strategy was first launched in 2016 and updated in 2021; the new version builds on the past decade to strengthen the ability to tackle emerging challenges.

[About EStar]

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