A government policy about banks deemed "systemically important" has led HSBC to create a local subsidiary in Singapore.

The Singapore branch of HSBC has completed the transfer of its retail banking and wealth management business to a locally incorporated subsidiary. The move follows the Singapore regulator's decision, announced in April 2015, to treat HSBC as one of a handful of “systemically important banks” requiring higher capital buffers.

The shift involves the transfer of the retail and wealth businesses from the HSBC Singapore branch to a locally incorporated subsidiary, called HSBC Bank (Singapore) Limited. 

The subsidiary will oversee the running of all operations of HSBC’s RBWM business in Singapore. 

Senior management of the subsidiary remain largely the same as before, including Guy Harvey-Samuel as chief executive and Matthew Colebrook as the head of RBWM. 

Last April, the Monetary Authority of Singapore said it will apply added supervisory measures to banks designated as systemically important. Banks which have a “significant” retail presence in the Asian city-state must, for example, locally incorporate their retail operations. Locally-incorporated banks must meet higher capital requirements, such as a minimum common equity tier one capital adequacy ratio of 6.5 per cent and total CAR of 10 per cent, which is above those levels set out in the Basel III rules. There are also other measures that apply, such as recovery and resolution planning and enhanced disclosure.

Besides HSBC, other banks that the MAS has designated for this status are DBS Bank, Oversea-Chinese Banking Corporation, United Overseas Bank, Citibank, Malayan Banking Berhad and Standard Chartered Bank.