The United Kingdom and Singapore recently concluded their 9th UK-Singapore Financial Dialogue, solidifying their commitment to collaboration in sustainable finance and FinTech innovation. This insightful meeting, held in Singapore on May 8th, 2024, explored critical areas for joint action to address the challenges and opportunities of a rapidly evolving financial landscape.
Scaling Sustainable Finance for a Net-Zero Future
A key focus of the dialogue was scaling financing to support the transition to a net-zero economy. Both nations acknowledged the urgency of this mission and reaffirmed their backing for globally comparable and sound transition plans.
The UK updated participants on the progress of the Transition Plan Taskforce (TPT) and its framework for corporate disclosures, while Singapore shared its consultation on Transition Planning Guidelines for financial institutions. This collaborative approach ensures consistency and strengthens efforts to build climate resilience within the financial sector.
The dialogue also highlighted the importance of robust disclosure standards, ESG ratings, and data products. The UK and Singapore expressed their commitment to implementing the International Sustainability Standards Board’s (ISSB) standards to enhance the reliability and comparability of sustainability-related disclosures globally.
Recognizing the significant funding gap for Asia’s green and transition finance, the two nations agreed to work together on mobilizing private capital. Building on their September 2023 Strategic Partnership, they plan to develop and finance green finance and energy transition projects in the region. Singapore’s Financing Asia’s Transition Partnership (FAST-P) initiative, which brings together public, private, and philanthropic partners to de-risk and finance green projects, exemplifies this collaborative spirit.
Balancing Risk and Opportunity
The dialogue also delved into managing risks and harnessing opportunities in the digital space. Artificial intelligence (AI) emerged as a key discussion point, with both countries acknowledging the need for international standards to facilitate responsible innovation while mitigating risks to consumers and financial stability.
The UK provided an update on its proposals for regulating cryptoassets, aiming to bring activities like exchange, custody, and lending within the regulatory perimeter for the first time. Singapore’s perspective on regulating certain stablecoins was also shared, demonstrating the evolving regulatory landscape in the digital asset space.
Central Bank Digital Currencies (CBDCs) were another topic of discussion. The UK shared progress on its “digital pound” consultation, while Singapore offered insights on wholesale payments and infrastructure supporting tokenized transactions.
Tokenization and distributed ledger technology (DLT) were also on the agenda, with both countries acknowledging their potential to broaden investor access and simplify investment product distribution. As part of Project Guardian’s policymaker group, the UK’s FCA and Singapore’s MAS aim to advance discussions on the regulatory treatment of digital assets, fostering responsible innovation within this emerging domain.
Addressing Risks in the Non-Bank Financial Intermediation (NBFI) Sector
The dialogue recognized the growing importance of the NBFI sector and the need for enhanced monitoring of potential risks. Both nations agreed on the importance of data gathering and sharing to strengthen authorities’ ability to oversee NBFIs. Additionally, they underscored the urgency of finalizing international policy work on margining practices and NBFI leverage, followed by implementation at the domestic level.
Enhancing Cross-Border Payment Connectivity
The UK and Singapore reaffirmed their commitment to the G20’s Roadmap to Enhancing Cross-Border Payments. The BIS Innovation Hub Singapore Centre’s Project Nexus, a multilateral approach to connect domestic instant payment systems, was also highlighted as a positive step towards faster, cheaper, and more transparent cross-border payments.
A Roadmap for Continued Collaboration
The dialogue concluded with a renewed commitment to ongoing engagement. A series of roadmap engagements are planned to explore further cooperation in sustainable finance and FinTech innovation, paving the way for the next Financial Dialogue scheduled for the UK in 2025. Additionally, two industry-led UK-Singapore business roundtables on Transition Planning and Generative AI will be held in May 2024, fostering knowledge sharing and industry collaboration.
The UK-Singapore Financial Dialogue serves as a model for international cooperation in the financial sector. By fostering shared understanding, promoting innovation, and tackling emerging challenges collaboratively, the UK and Singapore are well-positioned to lead the way towards a more sustainable and inclusive financial future.
The Dialogue was jointly chaired by Deputy Managing Director (Markets and Development) of MAS, Mr Leong Sing Chiong, and Director General (Financial Services) of HM Treasury (HMT), Ms Gwyneth Nurse. The Dialogue was attended by senior officials from MAS, HMT, Bank of England, FCA, the High Commission of the Republic of Singapore in London, and the British High Commission in Singapore.
puru@glocalinfomart.com
