Singapore outlines financial services overhaul with eye on green finance boom
15/09/2022 03:38
By Chen Lin and Xinghui Kok
SINGAPORE, Sept 15 (Reuters) - Singapore announced plans on
Thursday to overhaul its financial services industry by 2025 in
a bid to cement its position in a "key battleground" to fight
climate change, mobilising capital to support sustainable
financing and green fintech.
The 'Industry Transformation Map 2025' plans released by the
Monetary Authority of Singapore (MAS), the city-state's central
bank, will include measures to streamline corporate structures
used by investment funds, including family offices, that offer
tax breaks, and a S$400 million ($285 million) investment in
local talent within the industry.
The broad plans, for which full details have yet to be
announced, come with Singapore's allure as a finance hub in Asia
growing amid prolonged COVID-19 curbs and concern about mainland
China's growing scrutiny of rival Hong Kong.
"If we do this right, our financial centre will continue to
stay relevant and competitive, and be a key global financial
node that connects global markets, supports Asia's development,
and serves Singapore's economy," said Lawrence Wong, Singapore's
deputy prime minister and finance minister.
Wong said during a media briefing that there was "growing
interest" among high-net-worth individuals and family offices to
do more in the field of philanthropy.
The MAS projects its new plans will see Singapore's
financial sector grow by an average 4% to 5% a year from 2021 to
2025, and create 3,000-4,000 net jobs on average each year.
The plans include a S$100 million fund over five years to
support sustainability within the finance sector such as green
fintech, new sustainable financing solutions and reinsurance.
Wong said Asia was a "key battleground" to fight climate
change. "The financial sector must do its part – to mobilise
capital through financing and investments that support the
region's transition to net zero," he said.
Under the plans, the corporate structure used by investment
funds including family offices called Variable Capital Companies
(VCC) will be "enhanced", though details on the enhancements
won't be announced until a later stage. VCCs were first
introduced in 2020 and offer tax exemptions.
MAS said it had received requests to improve the VCC
framework so more industry participants and asset owners can set
up VCCs and convert of existing company structures into VCCs.
"The asset management industry in Singapore has continued to
do well in recent years, and registered healthy growth in spite
of the pandemic. We continue to see inflows from diversified
sources outside Singapore, including North America, Europe,
North Asia and Southeast Asia," MAS said.
($1 = 1.4050 Singapore dollars)
(Reporting by Chen Lin and Xinghui Kok in Singapore; Editing by
Kenneth Maxwell)
((Lin.Chen@tr.com; Twitter @chenlin_sg;))