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14 February, 2017
The Monetary Authority of Singapore (MAS) plans to strengthen the financing channels for "next generation Asian growth companies" and build technology infrastructure to support innovation.
In a response to the recommendations of the Committee on the Future Economy, which published a report last week on how to support the future economy of Singapore, MAS said it will is developing initiatives to improve funding for growth companies.
The authorisation process and regulations on venture capital (VC) managers should be simplified to help startup businesses, MAS said.
VC and private equity (PE) assets under management in Singapore have grown by an average 30% per year in the past five years, MAS said, "but the industry is still at an early stage and there is scope to expand both the number and variety of VC managers".
"MAS will simplify the authorisation and ongoing regulatory requirements for VC managers to allow them to operate more nimbly in supporting startups in Singapore and the region. MAS will also look to deepen the pool of PE managers in order to draw in more capital for late stage and mature start-ups," it said.
More should be done to provide finance for small- and medium-sized enterprises (SMEs), a "core pillar" of Singapore's economy, which contributes about half of Singapore's GDP and two-thirds of employment, MAS said.
MAS will "adjust the regulations that apply to finance companies, with a view to enhancing their ability to better meet the financial needs of SMEs while ensuring prudent risk management", it said.
The authority will also assess the possible introduction of dual class share structures (DCS) in Singapore's stock exchange (SGX) to support growth of high tech companies, it said.
"DCS structures pose governance risks that need to be carefully assessed and managed. SGX will soon be conducting a public consultation on whether and how to introduce a listing framework for DCS structures in Singapore," it said.
MAS has also been working with industry on technology infrastructure projects to "drive innovation, boost market efficiency, enhance customer service, and extend Singapore’s connectivity with the region", it said.
Proposals include developing an electronic marketplace for trade finance assets to increase the supply of finance, promoting electronic trading platforms for foreign exchange, and building a data infrastructure to help Singapore cope when natural catastrophes or cyber attacks hit.
MAS will also explore the feasibility of developing an industry Know-Your-Customer (KYC) utility, to allow financial institutions to identify and verify the credentials of their clients, and will work with industry to increase the use of electronic payments, it said.
Ravi Menon, managing director of MAS said: "The underlying thrust of MAS’ various initiatives is to provide a conducive environment for innovation – which is critical for the future of financial services. We do this through a judicious regulatory framework and enabling technology infrastructure. And even as we allow more risk-taking, we want to do so without compromising the safety of financial institutions and the stability of the financial system."
For further information, please contact:
Ian Laing, Partner, Pinsent Masons
ian.laing@pinsentmasons.com
