The UK’s HM Treasury (HMT) and the Monetary Authority of Singapore (MAS) have jointly announced that authorities in the two countries are to ‘deepen’ collaboration in fintech matters as part of a broader ambition to ‘strengthen financial co-operation’.
The authorities’ commitment – which includes a plan to explore opportunities to work together on practical innovation projects, as well as a formalised avenue for the private sector to be able to influence policy discussions – comes almost 18 months after the UK’s then-chancellor (now PM) Rishi Sunak and Singaporean senior minister (and MAS chairman) Tharman Shanmugaratnam agreed a ‘financial partnership underpinned by a regulatory co-operation memorandum of understanding (MoU)’.
The commitment also arrives nine months after the signing of a UK-Singapore Digital Economy Agreement (DEA) and almost two years after the signing of a UK-Singapore Free Trade Agreement (FTA). The landmark DEA includes a commitment to ‘free flow of trusted data’ and the new commitment ‘notes [the DEA’s] significance in underpinning the development of respective fintech sectors and supporting future digital and innovation partnerships’.
It is also six-and-a-half years since a so-called ‘FinTech Bridge’ between the two nations was launched alongside a regulatory co-operation agreement. A seven-page ‘MoU on the UK-Singapore Fintech Bridge’ has now been agreed, which the UK government describes as ‘going further in a number of areas’ than the 2016 agreement.
The announcement was made after the seventh ‘UK-Singapore Financial Dialogue’ held in Singapore on 25 November. Talks were co-chaired by HMT’s director-general (financial services) Gwyneth Nurse and MAS deputy managing director (markets and development) Leong Sing Chiong. Senior officials from MAS and HMT, as well as the UK’s Department for International Trade, Bank of England, Financial Conduct Authority (FCA) and British High Commission in Singapore also attended.
‘Consider joint innovation projects’
The authorities have ‘renewed their commitment to deepening’ relations on financial services matters having discussed mutual priorities and ‘agreed on further co-operation in these areas’, according to the HMT and MAS joint-announcement.
The aim, they state, is to support ‘continued growth, investment and technological innovation in this [fintech] sector, building on active interest of fintech players in the areas of payments, RegTech [the application of technology to improve regulatory compliance] and wealth management.’
The FinTech Bridge MoU, which is due to come into effect this week ‘once formalities have been completed on both sides’, aims to enable ‘stronger collaboration’ through the establishment of ‘a new structured engagement’ between policymakers and the private sector, as well as committing HMT and MAS to ‘ongoing working-level discussions held at least quarterly, attended by relevant officials, to discuss fintech developments’.
The MoU states that ‘upon agreement of both participants [HMT and MAS], other relevant agencies and stakeholders from each of the participants’ jurisdictions may be invited to participate in discussions where their participation would add value’.
The MoU also states that the authorities will ‘consider participating in joint innovation projects on the application of key technologies including digital and mobile payments, blockchain and distributed ledgers, data-sharing and open data flexible platforms and other areas of new technologies in the financial services industry.’
The two parties have agreed a ‘roadmap for engagements’, leading up to the eighth UK-Singapore Financial Dialogue, which is due to take place London in 2023.
Sustainable finance to the fore
The seventh UK-Singapore Financial Dialogue took in numerous fintech-related areas, as well as sustainable finance.
One topic almost inevitably discussed was the high-profile but controversial area of crypto-asset regulation, on which there was agreement on a ‘need to support the safe development of a digital assets ecosystem while ensuring that risks posed by digital assets are consistently managed’, according to the authorities’ announcement.
MAS also provided an update on its review of digital-wallet payment caps and expected next steps. The authority has just closed a consultation after last month (October) issuing a 12-page paper on proposed changes.
In respect of the green agenda, the two sides state that they will work together in a bid to combat so-called ‘greenwashing’. They ‘recognised the importance of’ comparable and reliable data to underpin the net zero transition, referencing tech-driven solutions such as MAS’s ‘Project Greenprint’. This initiative, launched almost two years ago, is focused on creating four ‘digital utilities’: an ESG (environment, social and governance) disclosure portal titled ‘ESGenome’ (this is being piloted with Singaporean stock exchange SGX to enable listed companies to perform baseline sustainability reporting against 27 core metrics); an ESG registry of green certifications (titled ‘ESGpedia’) using distributed-ledger technology; a data ‘orchestrator’ (for which small pilots are underway); and a digital marketplace that MAS is aiming to launch in 2023.
The UK and Singapore ‘agreed to explore further collaboration opportunities in this area’ while further priorities mentioned in the announcement include a reference to the ‘importance of a globally consistent framework for nature-based disclosures’.
In the field of transition finance, the UK and Singapore authorities plan to work with partners such as the UK Transition Plan Taskforce (launched by HMT in April) and Glasgow Financial Alliance for Net Zero’s (GFANZ) Asia-Pacific office (in Singapore) to ‘drive international consistency’ in design and disclosure of transition plans.
*** Separarely, MAS and the United Nations Capital Development Fund (UNCDF) have signed an MoU to help micro, small and medium enterprises (MSMEs) from least developed countries ‘enhance their digitalisation capabilities’ and facilitate greater access to finance through open digital infrastructures. Developing what is referred to as a ‘Pacific Islands Integrated Financial Ecosystem’ is the first focus.
TIMELINE: UK-Singapore financial services
January 2015: Inaugural ‘UK-Singapore Financial Dialogue’
May 2016: UK FCA and MAS sign regulatory co-operation agreement / UK-Singapore FinTech Bridge announced
December 2020: UK and Singapore sign Free Trade Agreement (FTA)
June 2021: HMT and MAS agree financial services regulatory co-operation MoU
February 2022: UK and Singapore sign Digital Economy Agreement (DEA)
November 2022: UK-Singapore FinTech Bridge MoU signed