As APAC regulators enter the second half of the year, supervision is shifting from intent to execution. Across Hong Kong, Singapore, and Taiwan, institutions are increasingly assessed on their ability to operationalise governance, controls, and data at scale. Q3 marks a clear inflection point, with heightened focus on implementation discipline, auditability, and measurable outcomes.
This edition outlines key regulatory developments shaping Q3 2026 priorities and the capabilities financial institutions must strengthen as scrutiny intensifies across digital assets, AI, financial crime, ESG transition finance, and operational resilience.
Artificial Intelligence
MAS collaborates with banking industry to harness artificial intelligence in the fight against financial crime | Singapore · 4 May 26
MAS announced a proof-of-value with banks, GovTech and the Singapore Police Force to use AI and machine learning for earlier detection of high-risk transactions and accounts. The exercise uses a secure, privacy-preserving environment with encryption, hashed data, restricted access and data deletion post-use. It aims to strengthen anti-scam controls and enable future industry-wide collaboration on financial crime analytics.
How FIs can respond
Banks should prepare for collaborative analytics by ensuring datasets are standardised, governed and legally usable. Priority actions include strengthening AI model-risk controls, including explainability, bias testing and auditability, and aligning fraud, AML and cyber functions. Over time, institutions should invest in secure analytics environments and faster intervention capabilities.
“Singapore’s AI-led anti-scam proof-of-value shifts financial crime prevention towards secure, collaborative analytics that banks must support with stronger data governance and model controls.” — Anu Meha, Associate Partner
MAS partners industry to develop AI risk management toolkit for the financial sector | Singapore · 20 Mar 26
MAS published an AI Risk Management Toolkit following Project MindForge, developed with 24 industry participants. It addresses risks across traditional, generative and agentic AI, with guidance covering governance, lifecycle controls and enabling capabilities. An industry workgroup will support further implementation.
How FIs can respond
Banks should operationalise AI governance by maintaining centralised inventories, assigning ownership and assessing use-case risks. Institutions should benchmark frameworks against the toolkit and strengthen controls for emerging AI risks, while building lifecycle testing, reporting and incident management capabilities.
Investment suitability
Consultation paper on enhancements to Product Highlights Sheet (PHS) requirements and the complex products framework | Singapore · 15 May 26
MAS issued a consultation proposing enhancements to Product Highlights Sheet (PHS) requirements and the Complex Products Framework to improve retail investor understanding. Proposals include redesigned PHS templates, clearer first-page disclosures, stronger product classification indicators and simplified nomenclature for complex products.
How FIs can respond
Banks should review product inventories and prepare for updates to disclosure, suitability and advisory processes. Over time, institutions may need to revise customer journeys, adviser scripts, digital disclosures and product governance frameworks to align with enhanced transparency requirements while reducing customer confusion.
Virtual assets
Granting of stablecoin issuer licenses | Hong Kong · 10 Apr 26
The HKMA announced on 10 April 2026 that it granted stablecoin issuer licenses to Anchorpoint Financial Limited and The Hongkong and Shanghai Banking Corporation Limited under Hong Kong’s new regime. The licensing marks a milestone in implementing a regulated stablecoin ecosystem, with use cases including cross-border payments, tokenised asset settlement and programmable finance.
How FIs can respond
Banks should assess opportunities and risks across payments, custody and tokenised asset settlement. Immediate priorities include digital asset strategy reviews, AML controls, operational readiness and counterparty due diligence. Over time, institutions may need to integrate stablecoin settlement into treasury and collateral systems while strengthening technology and governance frameworks.
“Singapore’s MAS’ proposed PHS and complex-product reforms would require banks to simplify investor disclosures while recalibrating suitability and distribution controls.” — Marina Mai, Senior Director
Circular to licensed corporations, SFC-licensed virtual asset service providers and associated entities – AML/CFT updates from FATF plenary | Hong Kong · 13 Mar 26
The SFC issued a circular highlighting FATF updates from the February 2026 plenary, including revised lists of high-risk jurisdictions and increased monitoring jurisdictions. The update underscores continued regulatory focus on cyber-enabled fraud and virtual asset-related financial crime risks.
How FIs can respond
Banks and VASPs should update country risk ratings, screening rules and enhanced due diligence triggers. Medium-term enhancements include improved integration between sanctions, AML and blockchain analytics, and more dynamic list management processes.
Consultation paper on the prudential treatment of cryptoassets on permissionless blockchains | Singapore · 17 Apr 26
MAS published a consultation proposing a risk-based pathway for treating certain cryptoassets issued on permissionless blockchains as Group 1 assets, subject to controls and exposure caps.
How FIs can respond
Banks should assess eligibility for Group 1 treatment by strengthening blockchain risk assessments, governance and prudential reporting processes. Medium-term requirements include automated exposure monitoring and enhanced control integration across capital and liquidity frameworks.
Strategic innovation drives growth of Hong Kong’s listing and digital asset markets: SFC quarterly report | Hong Kong · 19 Mar 26
The SFC’s Quarterly Report highlighted strong growth in Hong Kong’s listing and digital asset markets, including IPO activity, tokenised funds and virtual asset ETFs, alongside increased supervisory scrutiny on sponsor practices and investor protection standards.
How FIs can respond
Banks should strengthen IPO due diligence, product governance and suitability controls for digital asset-related products. Over time, institutions should enhance surveillance capabilities, documentation standards and risk management frameworks in line with innovation-driven market developments.
Operational risk and resilience management (ORRM)
Consultation paper on updated guidelines on operational risk management | Singapore · 6 Mar 26
MAS published a consultation paper proposing updated Operational Risk Management Guidelines, reflecting increasing digitalisation, third-party reliance and cyber threats. The updated framework strengthens expectations around change management, public disclosure and group-wide oversight, with a proposed six-month transition period after finalisation.
How FIs can respond
Banks should conduct gap assessments, review governance frameworks and enhance operational risk reporting. Medium-term priorities include integrating operational resilience, third-party risk and technology risk into unified frameworks, and strengthening group-wide oversight across jurisdictions.
“Singapore’s MAS' operational risk proposals push banks toward an integrated resilience model — spanning change, technology, third parties and group-wide oversight.” — Karan Singh, Director
Environmental, social and governance (ESG)
MAS sets supervisory expectations on financial institutions for transition planning practices in addressing environmental risk | Singapore · 5 Mar 26
MAS issued transition planning guidelines requiring institutions to integrate climate considerations into governance, risk management and client engagement. The framework discourages indiscriminate divestment and will take effect in September 2027 following a transition period.
How FIs can respond
Banks should prioritise climate-exposed portfolios, strengthen client engagement and enhance climate data capabilities. Over time, transition planning should be embedded into credit decisioning, risk appetite and scenario analysis.
“Singapore’s MAS’ transition planning guidelines make climate risk management a forward-looking supervisory expectation, not merely a sustainability disclosure exercise.” — Anu Meha, Associate Partner
Report on “Navigating the green shift: opportunities and the evolving landscape of transition finance” | Hong Kong · 17 Apr 26
HKMA released a research report highlighting global developments in transition finance, collaboration models and safeguards against greenwashing. The report underscores increasing regulatory focus on taxonomies, climate analytics and transition finance execution.
How FIs can respond
Banks should strengthen transition finance frameworks, borrower assessment criteria and anti-greenwashing controls, supported by improved climate data and taxonomy alignment.
Cross-agency steering group welcomes first sector-based operational guide on transition finance | Hong Kong · 15 May 26
Hong Kong authorities introduced a sector-based transition finance guide, initially focused on technology, providing practical tools including metrics, transition plans and case studies to support implementation.
How FIs can respond
Banks should enhance data capture at entity level and develop sector-specific frameworks to improve consistency and reduce greenwashing risk.
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