By: Nicolet-Serra and Josh Durham
Singapore has just become the 48th nation (joining the US) to begin implementing the international Crypto-Asset Reporting Framework (CARF), which is intended to standardize the automatic exchange of personal financial information between countries and to reduce tax evasion by those engaging in cryptocurrency transactions.
Read MoreBy Nicholas Hanna and Samantha See
On 14 November 2017, the Monetary Authority of Singapore (the “MAS”) released “A Guide to Digital Token Offerings” providing general guidance on the application of the securities laws administered by the MAS in relation to offers or issues of digital tokens in Singapore.
The main consideration is whether the digital token is designed in a way that would make it a product regulated under Singapore’s securities laws i.e. if it behaves like a share, debenture or some other form of security. If a token does not function like a security, then technically, neither will the security laws apply.
On 14 September the Securities Commission Malaysia (SC) announced that it has signed a series of FinTech cooperation agreements with several regulators in major financial centres. The SC has established FinTech bridges with the Hong Kong Securities and Futures Commission (SFC), the Dubai Financial Services Authority (DFSA) and the Monetary Authority of Singapore (MAS). This follows the first agreement signed between the SC and the Australian Securities and Investments Commission (ASIC) in June 2017.
By Judith Rinearson and Rizwan Qayyum
On August 10, 2017, the Monetary Authority of Singapore (MAS) and the Commercial Affairs Department (CAD) jointly published a Consumer Advisory document which urged consumers to exercise due diligence before investing in digital tokens, with particular emphasis on the emergence of Initial Coin Offerings (ICOs). In Singapore, several ICOs have taken place in the past year and this has resulted in organisations raising millions of dollars in a few days since their launch.
An ICO is a crowdfunding method, facilitated by blockchain, through which a project or venture, usually a start-up organisation, raises funding by creating and selling its own digital asset, currency or token in exchange for digital currencies or assets of immediate value such as a Bitcoin. The practice is thus far unregulated and enables a new brand of alternative finance. An ICO campaign ‘runs’ for a defined period during which investors are able to support the project, with the aspiration that this digital asset becomes successful and their investment reaps profit.
By Nicholas Hanna and Samantha See
Increasingly, early stage start-ups and FinTech businesses are seeing incentives in Singapore as an attractive location to set up shop. Innovative policies to kick start businesses and commerce in Singapore have been developing for the last two years. The increase in FinTech investment coupled with the ramifications of Brexit has now seen a trend of British businesses migrating to Singapore. For example, Aviva, the British insurer, created its second “digital garage” in Singapore. The Chairman of Aviva’s Asian business and head of its digital business has named both London and Singapore FinTech Hubs. He also noted that Singapore is fast-tracking the FinTech sector with innovations such as allowing financial institutions to use cloud infrastructure, helping start-ups to compete with incumbents and giving permission for all insurance products to be sold online.
The FinTech eco-system is rapidly growing in Singapore with the support of recent initiatives by the MAS (Monetary Authority of Singapore) and the Deputy Prime Minister’s announcement to review the regulatory process for Venture Capital managers. MAS recently announced its cooperation agreement with Government of Andhra Pradesh (GoAP) to explore joint innovation projects on technologies including digital payments and blockchain and collaborate on the development of education programmes/curricula on FinTech. Singapore houses over 300 FinTech start-ups already and is known for being a hub to commerce operating in South East Asia. The government and regulatory authorities have indicated to review and introduce further incentives for FinTech companies in 2017.
A recent EY study looks at how the UK FinTech ecosystem compares to that of California, New York, Germany, Singapore, Hong Kong and Australia based on their status as FinTech hubs. The report considers four attributes in each region:
The analysis was commissioned by the UK Government to inform policy and support the sector. It also includes case studies on Israel and China.
The study gives extremely interesting comparative data across the regions and provides recommendations for the UK Government based on the experience in other countries.
The Monetary Authority of Singapore (MAS), which is the regulatory authority overseeing financial matters in Singapore, issued a consultation paper on 25 August 2016 setting out proposed changes to the payments regulatory framework in Singapore together with the proposed establishment of a National Payments Council.
In a response to the lines between payments and remittance being blurred by technical innovation and the increasing number of payment providers that do not fit neatly into either of these categories, MAS is proposing to consolidate its regulation of both payments and remittance into a single framework. Currently, such services are split across the Payment Systems (Oversight) Act and the Money-changing and Remittance Businesses Act.
MAS has confirmed that the new single framework will provide for licensing, regulation and supervision of all payment services, including stored value facility holders, remittance companies and virtual currency intermediaries. The new framework is likely to be applied on an activity basis with entities being required to apply for a single licence to undertake several payment activities. Read More
By Nicholas Hanna and Penelope Davey
In a move that is targeted at promoting Singapore as a leading FinTech hub in Asia-Pacific, the Monetary Authority of Singapore (MAS), the regulatory authority overseeing financial matters in Singapore, issued a consultation paper on 6 June 2016 which outlined a proposal for a “regulatory sandbox” for FinTech solutions.
The proposal will permit financial institutions and other entities to experiment with new FinTech solutions in an environment of relaxed regulation whilst maintaining appropriate safeguards. It is hoped that this proposed relaxed regulatory environment will allow such solutions to take root without being impeded by regulatory compliance costs and will improve the viability of innovations in the FinTech sector.
The UK Government has announced a new “FinTech Bridge” to help UK FinTech firms and investors access the Asian market and expand to Singapore, as well as attracting Singaporean FinTech companies and investors to the UK.
The launch on 11 May 2016 included the signing of a regulatory cooperation agreement between the Financial Conduct Authority (“FCA”) and the Monetary Authority of Singapore (“MAS”). The agreement will enable the regulators to refer FinTech firms to their counterparts across the globe. It also sets out how the regulators plan to share and use information on financial services innovation in their respective markets.
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