Singapore Fintech Regulatory Updates - Nov 2017

MAS releases new guidelines on ICOs and securities

The MAS "Guide to Digital Token Offerings" describe how tokens are regulated under current securities laws in Singapore. The new guidelines will inform companies which are going to hold their Initial Coin Offerings (ICO) in Singapore and explains, inter alia, when token sales need to be accompanied by prospectus in accordance with the Securities and Futures Act (SFA). It also discusses the extraterritorial nature of the current regulations, and provides several case studies for better understanding of different business and legal scenarios.

Distributed Ledger Technology (DLT) can improve Central Bank payment systems, says MAS-ABS report

A 13-week project led by the Monetary Authority of Singapore and the Association of Banks in Singapore, proved, perhaps for the first time, that block chain-based designs can preserve privacy in Real-Time Gross Settlements (RTGS). The test, managed by Accenture, confirmed that gridlock resolution and a liquidity-saving mechanism on a decentralized system work. The project report, released at the Singapore Fintech Festival, was based on the results of a prototype involving 11 banks and three leading block chain technology platforms that were tested in parallel. The report demonstrates how DLT can improve large-value interbank payments of cash or securities that require immediate settlement.

MAS & MIT Media Lab to collaborate on advanced fintech research

The Monetary Authority of Singapore (MAS) and the Massachusetts Institute of Technology (MIT) Media Lab announced they will work together on pilots and experiments in a wide range of financial-services projects. The financial industry in Singapore has developed prototypes regardinginterbank payments, securities settlement, insurance claims processing, trade, and trade finance. The collaboration marks the significance of the role cryptocurrencies and block chain technology are beginning to play in the financial industry.

Singapore establishes regional e-payment linkages

The Monetary Authority of Singapore (MAS) signed 16 global fintech cooperation agreements at the Singapore Fintech Festival, among them, initiatives to connect Singapore's payment systems with neighboring countries. One of them is to link PayNow with Thailand's PromptPay. Using mobile phone numbers, customers in Thailand and Singapore can send and receive money instantly. Meanwhile, Nets is working with the National Payment Corporation of India (NPCI) to build similar linkages.

Singapore and Thai Central Banks sign fintech agreement

The Monetary Authority of Singapore (MAS) and the Bank of Thailand (BOT) signed an agreement at Singapore Fintech 2017 to collaborate on the development of advanced financial technologies. A BOT assistant governor said that the monetary authorities’ discussions focused on regulatory sandboxes. He noted that the Thai central bank had adopted regulatory sandboxes in 2016 to allow approved fintechs to experiment with new products or services for a limited period under relaxed requirements. The Thai central bank had also introduced the QR code for online payments of goods and services on the domestic market to meet advanced international standards, he said.

EDB-NVIDIA scholarships for AI talent

30 postgraduate scholarships will be awarded to Singapore citizens or permanent residents on the Economic Development Board(EDB)-NVIDIA Future Talents Program. NVIDIA and local universities will mentor the scholars to address industry-specific needs and build a strong pool of next-gen AI talent to make the country a hub for AI development and adoption. Scholars will study neural networks, machine learning and architecture development for GPUs (graphics processing units).

Agreement to enhance trade finance corridor between HK & Singapore

The Monetary Authority of Singapore (MAS) and the Hong Kong Monetary Authority (HKMA) exchanged a Co-operation Agreement at the HKMA Fintech Day this October. Their first collaborative project is on trade finance cross-border infrastructure, based on distributed ledger technology. The two authorities will also collaborate on other fintech initiatives, facilitate referrals of innovative businesses, share information, and exchange expertise, to facilitate financial innovation in Singapore and Hong Kong. HKMA hopes to develop “synergy for the development of fintech and more efficient fund flows between the two markets."

MAS mulls regulatory sandbox for ICOs

A senior officer at the Monetary Authority of Singapore (MAS) stated that there is a push to sell initial coin offerings (ICOs) through a regulatory sandbox. He was speaking at the inaugural Fintech Abu Dhabi. This would make MAS among the world's first regulators of this form of crowd funding tied to virtual currencies. ICOs in Singapore generally follow practices not unlike securities. A sandbox would enable fintech companies to test products and services in an unregulated environment, but within experimental boundaries.

Singapore, Lithuania in talks for bilateral co-op in science, tech and innovation

Lithuania’s Minister of Foreign Affairs invited Singapore businesses to participate in Life Sciences Baltics 2018 next September in Vilnius. The Minister was receiving a Singapore Foreign Ministry official in the capital. The officials discussed bilateral co-operation in the fields of information and financial technology, lasers, life sciences and logistics, especially between universities and institutions. The Minister renewed an invitation for the Singapore Prime Minister to visit Lithuania and to appoint an honorary consul in Lithuania.

Singaporean gets Abu Dhabi regulatory startup off the ground

As CEO of Abu Dhabi Global Market’s (AGDM) Financial Services Regulatory Authority, Richard Teng’s focus is to “anchor much more financial services in the region.” The tax-free financial center’s role is to draw financial services into the UAE’s capital and Teng’s regulatory startup will establish sound regulation that meets global standards. With 350 firms, AGDM registered the fastest pace of growth in terms of new funds created in the UAE. The first fund launched in ADGM, known as the Goldilocks fund, returned about 400 per cent to its investors in two years, investing only in the region in financial institutions that are undervalued. Teng, formerly with the Singapore Exchange, sees the need for the region to diversify away from petrochemicals.

Cryptocurrencies and Singapore’s way forward

As market capitalization of cryptocurrencies hits new highs, central banks like Singapore’s are keeping up with block chain technology and monitoring the market for risks. Singapore does not plan to regulate cryptocurrencies for the time being, but is experimenting with DLT. The MAS is exploring a digital version of the Singapore dollar to facilitate interbank payments. To reach its goal of becoming a Smart Financial Center, Singapore will gain from a dialog with industry players, and policy makers in other countries, along with large-scale research involving fintech and cryptocurrencies.

More cyber rules, fewer sandbox regulations

The Monetary Authority of Singapore is “working out reduced requirements” for corporates which apply for the regulatory sandbox. This will speed up the approval process, and facilitate fintech companies, which make up 80 percent of the applications for the sandbox. The monetary authority is also raising the level of standards for cyber risk management by setting further requirements in cyber security - the least known of all risks facing banks. Some 20 global banks and insurers have set up innovation labs in Singapore; more than 400 fintech companies have settled in Singapore.

Singapore Central Bank to lay down new cyber rules

New regulations on cyber security will encourage digital and online banking in the city state, said the managing director of the Monetary Authority of Singapore. The authority is looking to set more requirements for banks which will mitigate cyber risk, the least known risk that banks face. Models to track, manage and mitigate cyber risks have not been developed as much as for more traditional risks, he said. More regulations to raise the standards of cyber risk management will likely go into place soon.

MAS chief warns of bubble in fintech space

Monetary Authority of Singapore (MAS) chief Ravi Menon advised people to be cautious about the rapid rise of cryptocurrencies. Menon sees some collapse of the fintech bubble like the dotcom bust, but he is hopeful it is not a clean sweep like the 2001 phenomenon. Menon states that new technologies in the financial space produce powerful applications, but some applications are “clearly overstretched.”