Singapore presents financial services overhaul in preparation for green finance boom

A view of the headquarters of the Monetary Authority of Singapore in Singapore June 28, 2017. Picture taken June 28, 2017. REUTERS/Darren Whiteside/File Photo

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SINGAPORE, Sept 15 (Reuters) – Singapore on Thursday announced plans to overhaul its financial services sector by 2025 in a bid to cement its position on a “key battleground” to tackle climate change, by mobilizing capital to support sustainable finance and green fintech.

The ‘Industry Transformation Map 2025’ released by the Monetary Authority of Singapore (MAS), the city-state’s central bank, will include measures to streamline the corporate structures used by investment funds, including family offices, which offer tax breaks, and a $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 appeal as a growing financial hub in Asia amid prolonged COVID-19 restrictions and concerns over mainland China’s growing scrutiny of rival Hong Kong.

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“If we do this right, our financial center will continue to remain relevant and competitive, and to be a key global financial hub that connects global markets, supports Asia’s development and serves Singapore’s economy,” said Lawrence Wong, Deputy Prime Minister and Finance of Singapore. minister.

Wong told a news conference there was “growing interest” among high net worth individuals and family offices to do more in the area of ​​philanthropy.

The MAS predicts that its new plans will see Singapore’s financial sector grow by an average of 4-5% per year from 2021 to 2025 and create 3,000-4,000 net jobs on average each year.

Plans include a S$100 million fund over five years to support sustainability in the financial sector, such as green fintech, new sustainable finance solutions and reinsurance.

Wong said Asia was a “key battleground” in tackling climate change. “The financial sector must do its part – to mobilize capital through financing and investments that support the region’s transition to net zero,” he said.

According to plans, the corporate structure used by investment funds, including family offices known as variable capital companies (VCCs), will be “improved”, although details of the improvements will only be announced at a later date. later stage. VCCs were first introduced in 2020 and offer tax exemptions.

MAS said it has received requests to improve the VCC framework so that more industry participants and asset owners can create VCCs and convert existing business structures to VCCs.

“The asset management industry in Singapore has continued to do well in recent years and has seen healthy growth despite the pandemic. We continue to see entries from diverse sources outside of Singapore, including North America, Europe, North Asia and South East Asia,” says MAS.

($1 = 1.4050 Singapore dollars)

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Reporting by Chen Lin and Xinghui Kok in Singapore; Editing by Kenneth Maxwell

Our standards: The Thomson Reuters Trust Principles.

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