Key Agreements Concluded to Enhance Regulatory Cooperation, Launch of China Bond Index, and Cross-border Payments Tie-up
Singapore, 14 November 2018… In a landmark year for financial cooperation between China and Singapore, four milestone agreements were concluded this week between financial regulators and between financial institutions (FIs) from both countries. The exchange of regulatory agreements was witnessed by Chinese Premier Li Keqiang and Singapore Prime Minister Lee Hsien Loong. Premier Li is in Singapore to attend the 33rd ASEAN Summit and related summits on 11 to 15 November 2018.
2 The agreements capped a strong finish to a successful year for financial cooperation between China and Singapore, which saw multiple high-level exchanges between financial agencies
3 Two key private sector tie-ups between Chinese and Singapore FIs were concluded at the side of Premier Li’s visit. These include:
- Singapore Exchange’s (SGX) Cooperative Agreement with China Foreign Exchange Trade System (CFETS)
China Foreign Exchange Trade System (CFETS), also known as the National Interbank Funding Center, is a sub-institution directly affiliated to the People’s Bank of China (PBC). CFETS provides a series of services covering issuance, trade, post-trade processing, information, benchmark and training services for interbank FX market, money market and bond market via dedicated line and the Internet with advanced electronic information technologies. (source: www.chinamoney.com.cn/english/)and Bank of China (BOC) to launch the CFETS-BOC Traded Bond Indices on SGX.
The Bond Indices, designed by CFETS and BOC, track the movements of the Chinese bond market and can be used by investors to benchmark their Chinese bond portfolio performance. SGX will be the first exchange to distribute the CFETS-BOC Traded Bond Indices outside of China. The launch of the Bond Indices can catalyse the development of tradable China bond products and facilitate greater investments into China’s bond market by international investors.
- NETS’ MOU with UnionPay International (UPI) to support cross-border connection of their mobile wallets.
NETS partnered with UnionPay, a global payment network in September 2018, to allow NETSPay users to scan and pay for purchases at around 10 million UnionPay QR code merchants globally. The tie-up also allows UnionPay customers to spend at NETS merchants island-wide. The MOU will support further collaboration on technology know-how between UnionPay and NETS, and facilitate the joint setting up of a research and development centre in Singapore. UnionPay currently serves the world’s largest card base, where its partners have issued over 7 billion cards globally.
4 On the regulatory front, the Monetary Authority of Singapore (MAS) concluded and exchanged cooperation agreements with the People’s Bank of China (PBC) and the China Securities Regulatory Commission (CSRC). These include:
- A Fintech Cooperation Agreement (CA) between PBC and MAS. The CA will promote FinTech cooperation between MAS and PBC, and pave the way for joint innovation projects in the application of key technologies
Key technologies include digital and mobile payments, blockchain and distributed ledgers, big data, flexible platforms through Application Programming Interfaces (API), and other areas of new technologies.as well as joint research in technology. The CA also provides for regulatory coordination with regards to the expansion of FinTech companies into each other’s markets.
- A Memorandum of Understanding (MOU) between CSRC and MAS for the Cooperation and Exchange of information on the Regulation of Derivatives Activities. The MOU will enhance information sharing and cross-border supervision of futures exchanges and intermediaries that offer cross-border services to each other’s market participants. MAS and CSRC will also coordinate with each other on the listing and trading of exchange-traded derivatives products with nexus to each other’s capital markets.
5 Mr Ravi Menon, Managing Director, MAS said: “This week’s signing of agreements between the financial regulators of China and Singapore bears testimony yet again to the growing strength of financial cooperation between our two countries. We are particularly pleased with the private sector MOUs, which represent ‘firsts’ in their respective areas. The launch of the CFETS-BOC Traded Bond Indices on SGX will help enhance bond connectivity between China and Singapore. The NETS-UPI tie up will allow a larger number of travellers between the two countries to make payments in each other’s markets. These four agreements will help to further deepen the growing connectivity between the financial sectors of China and Singapore.”