This means having an effective regime against: •  market misconduct and misdemeanours; and  •  illicit finance, namely money laundering and terrorism financing. MAS is stepping up enforcement action against misconduct such as insider trading, false trading and front running by individuals and traders in the securities market. •  We have sought criminal actions or higher civil penalties to send the right deterrent message. •  In April last year, MAS imposed a civil penalty of close to $ million for insider trading – the highest quantum in a single case so far. BIS central bankers’ speeches  5  When it comes to anti-money laundering and countering the financing of terrorism (AML/CFT), the rules are strict and in line with international standards. Financial institutions must: •  know their customers;  •  assess the risks and perform additional due diligence where the risks are higher;  •  monitor transactions on an ongoing basis and report any suspicious activities. Supervision of financial institutions is rigorous. •  In recent years, MAS has stepped up its onsite supervision of AML/CFT controls – increasing the number of inspections by six-fold. •  This is resource-intensive business: each AML/CFT inspection of a bank takes about 4–8 weeks and involves 4–6 supervisors. We have now set up a dedicated AML Department.
Last year, the Ministry decided that the Fund should prepare the ground for investing in real estate at 5 per cent of the strategic benchmark portfolio. In time, this may reduce the fixed income share to 35 per cent. Under the Fund’s investment strategy, more equities are purchased when equity prices fall and fewer when prices rise. Thus, the Fund purchased a large volume of equities in the  BIS Review 58/2009  3  period 2001-2003 and is buying a considerable volume now. Of the equities now held, 40 per cent were acquired in 2008 when prices were falling. The Fund currently owns a little more than 1¼ per cent of listed European equities, and the Fund’s average ownership share in international equity markets was ¾ per cent at the turn of the year, with allocations to equities accounting for close to 50 per cent at that time. The Government Pension Fund – Global is invested in almost 7900 equities and bonds from 2200 different issuers. Although the Fund is well diversified, its size means that it will have large individual positions in capital markets. The largest equity holdings include multinational companies like Royal Dutch Shell, Nestlé, BP, Exxon Mobil Corporation and Novartis, to name a few. Since summer 2008, the Ministry of Finance has allowed the Fund to hold up to 10 per cent of a company’s shares.