Financial Services Industry Transformation Map
MAS announced a new US$5 billion private markets programme for investments into private equity (PE) and infrastructure (13 November 2018)
Under the programme, MAS will fund PE and infrastructure fund managers who are committed to either deepening their existing presence or establishing a significant presence in Singapore. This will help create a deeper and more vibrant private markets ecosystem in Singapore that will strengthen the financing channels to support enterprises.
Deputy Prime Minister and Minister for Finance Heng Swee Keat announced a new S$75 million equity market grant scheme to promote Singapore as Asia’s centre for capital raising and enterprise financing (14 January 2019)
The Grant for Equity Markets Singapore (GEMS) comprises three components, namely (a) listing grant; (b) research talent development grant; and (c) research initiatives grant. GEMS will be a 3-year initiative with effect from 14 February 2019.
Variable Capital Companies framework
- Variable Capital Companies (VCC) Bill was passed by Parliament (1 October 2018)
The VCC Act provides for the incorporation and operation of a new corporate structure tailored for investment funds. The VCC framework will encourage fund managers to co-locate fund domiciliation with their fund management activities which are already in Singapore, thereby creating a full-service fund ecosystem.
- MAS issued public consultation on the VCC subsidiary legislation (30 April 2019)
The subsidiary legislation sets out the operational framework for the VCC Act, including details pertaining to the incorporation of a VCC, the registration of sub-funds and the re-domiciliation process for foreign corporate entities to Singapore as VCCs. The VCC Act is expected to come into force in Q4 2019.
Global capital for Asian insurance and risk transfer
Cambodia, Indonesia, Japan, Lao PDR, Myanmar, and Singapore signed the Southeast Asia Disaster Risk Insurance Facility (SEADRIF) MOU (14 December 2018)
The MOU signing followed after the announcement at the ASEAN+3 Finance Ministers’ and Central Bank Governors’ Meeting in Manila on 4 May 2018 to establish SEADRIF and domicile the facility in Singapore. SEADRIF aims to provide ex-ante climate and disaster risk financing solutions and instruments for ASEAN members, and will commence with a parametric sovereign flood risk insurance pool for Lao PDR and Myanmar, the first of its kind in the region.
The first Singapore Insurance-Linked Securities (ILS) bond, Orchard Re, was launched by the Insurance Australia Group (IAG) (21 December 2018)
It was also the first catastrophe bond for IAG, and the first to be domiciled in Asia Pacific. Two additional catastrophe bonds, First Coast Re II sponsored by Security First and Manatee Re III sponsored by Safepoint Insurance, were subsequently issued in May 2019. Notably, First Coast Re became the first full 144A cat bond to be issued in Singapore, which is the most liquid type of ILS offering, and underscored Singapore’s capabilities to facilitate such a transaction.
Leading centre for Asian fixed income - Green, Social and Sustainability Bonds
MAS signed an MOU with the International Finance Corporation (IFC) to accelerate the growth of the green bond asset class in Asia (7 June 2018)
The MOU aims to encourage green bond issuances by financial institutions in Asia by supporting capacity building programmes for professionals on green finance. MAS and IFC will also work together to promote the use of internationally recognised green bond standards and frameworks.
Launch of the ASEAN Social and Sustainability Bond Standards (11 October 2018)
The ASEAN Capital Markets Forum (ACMF) continues to place emphasis on sustainable finance and launched the ASEAN Social Bond Standards and the ASEAN Sustainability Bond Standards. Together with the ASEAN Green Bond Standards launched in November 2017, the ASEAN region now has a complete suite of standards to accelerate the development of sustainable finance in the region. The standards are intended to enhance transparency, consistency and uniformity of ASEAN green, social and sustainability bonds, which will provide guidance to ASEAN issuers and assist global investors to make informed investment decisions.
MAS expanded the Green Bond Grant Scheme to include social and sustainability bonds to catalyse the growth of social and sustainability bond markets in Singapore (22 February 2019)
In addition to green bonds, the new Sustainable Bond Grant Scheme (SBG) will fund 100% of eligible expenses attributable to obtaining an external review for social and sustainability bonds, up to a grant amount of S$100,000 for each qualifying issuance. The scheme was also extended to 31 May 2023.