Singapore, 8 May 2024… The United Kingdom and Singapore held the 9th UK-Singapore Financial Dialogue in Singapore today. The two countries discussed opportunities for collaboration in priority areas such as sustainable finance, FinTech and innovation, and exchanged views on recent developments in non-bank financial intermediation (NBFI) and efforts to improve cross-border payments connectivity.
Sustainable finance
2. The UK and Singapore have reaffirmed their commitment to increasing funding for the net zero emissions agenda.
A. Evolution of transition planning: The UK and Singapore reaffirmed that globally comparable and robust transition plans are essential for scaling transition finance. The UK provided an update on progress on the Transition Plan Taskforce (TPT) disclosure framework following its publication in October 2023, and outlined plans to introduce disclosure expectations for listed companies’ transition plans. The Monetary Authority of Singapore (MAS) shared its consultation on the Transition Planning Guidelines 2023, which set out supervisory authorities’ expectations for financial institutions to have a robust transition planning process in place as they build climate resilience and manage risks arising from the global transition to a net-zero emissions economy and the expected physical impacts of global warming. The UK and Singapore also noted the importance of ongoing work in the G20, the Financial Stability Board (FSB), the Basel Committee Task Force on Climate-related Financial Risks (TFCR), the International Organization of Securities Commissions (IOSCO) and the Central Banks and Supervisors Network for Greening the Financial System (NGFS) in this regard.
b. Disclosure standards, ESG ratings and data products: The UK and Singapore reaffirmed their commitment to implementing the International Sustainability Standards Board (ISSB) standards to improve the consistency, comparability and reliability of sustainability information globally. The UK provided an update on its sustainability disclosure requirements and associated labelling regime. The UK and Singapore also discussed the voluntary codes of conduct for providers of ESG ratings and data products that have been published in their respective countries, noting that both codes are aligned with IOSCO recommendations. Both countries agreed to explore opportunities for collaboration as the regulatory landscape evolves, including through IOSCO’s Sustainable Finance Working Group.
c. Sustainable infrastructure and investments: The UK and Singapore noted the significant financing gap for green and transition finance in Asia, and agreed that there are opportunities to mobilise private capital for the transition to net zero. Building on the UK-Singapore Strategic Partnership of September 2023
FinTech and innovation
3. The UK and Singapore exchanged views on their respective approaches to managing risks and seizing opportunities in the digital space.
A. Artificial Intelligence (AI): The UK and Singapore discussed financial stability risks, cybersecurity risks, and supervisory considerations associated with the increased use of AI in the financial sector. Both countries agreed that international standards were essential to facilitate innovation while managing risks to consumers and the stability and integrity of financial markets, and explored areas of collaboration through international fora, such as IOSCO and the FSB.
b. Crypto-assets: The UK provided an update on its final proposals to create the UK financial services regulatory regime for cryptoassets, under which the government will for the first time bring a number of cryptoasset-related activities, such as exchanges, custody and lending, into the regulatory scope. The UK also provided an update on its plans to regulate certain fiat-referenced stablecoins and create the environment for stablecoin issuers and service providers to operate and grow in the UK.
c. Central Bank Digital Currency (CBDC): The UK shared progress following the publication of the response paper to the consultation on the “digital pound” on 25 January 2024, including a design phase that would be followed by a decision on whether to implement a retail CBDC. The UK also shared its thoughts on wholesale payments, including on the infrastructure supporting the settlement of tokenised transactions.
d. Tokenization and Distributed Ledger Technology (DLT): The UK and Singapore shared their respective tokenisation and DLT projects and initiatives and agreed on the benefits of tokenising assets and funds for the financial ecosystem, from expanding investor access to investment products to simplifying the distribution and trading of these products digitally. As part of the Guardian Project Policymakers Group, the UK Financial Conduct Authority (FCA) and MAS, along with other policymakers, shared their respective tokenisation and DLT projects and initiatives.
Developments in the NBFI sector and cross-border payment connectivity
4. The UK provided an update on recent developments to address risks in the NBFI sector. Both countries highlighted the importance of strengthening the capacity of authorities to monitor risks in NBFIs through improved data collection and sharing. They also agreed on the importance of finalising ongoing international policy work on NBFI margining and leverage practices, and then implementing agreed policies for NBFIs at the national level. The UK and Singapore agreed to continue their collaboration to address vulnerabilities associated with NBFIs, including within IOSCO and the FSB.
5. The UK and Singapore reiterated their commitment to the G20 roadmap to improve cross-border payments, including the FSB’s priorities for this year as set out in its latest progress report. The BIS Innovation Hub Singapore Centre also shared progress on the Nexus project.
6. The UK and Singapore have renewed their commitment to engage beyond the Dialogue through a series of roadmap commitments to explore further cooperation in sustainable finance, FinTech and innovation, ahead of the next Financial Dialogue to be held in the UK in 2025.
7. Two UK-Singapore industry-led business roundtables on transition planning and generative AI will take place on 9 May 2024 with participation from industry stakeholders from both countries.
a. The Transition Planning Roundtable will examine current regulatory initiatives and next steps for financial institutions and their portfolio companies in their transition to net zero.
b. The Generative AI Roundtable will discuss the challenges this technology poses for regulatory compliance and identify strategies to harness the benefits of generative AI while fostering innovation and protecting consumers.
8. The dialogue was co-chaired by MAS Deputy Director General (Markets and Development), Mr Leong Sing Chiong, and Her Majesty’s Treasury (HMT) Director General (Financial Services), Ms Gwyneth Nurse. Senior officials from MAS, HMT, the Bank of England, the FCA, the High Commission of the Republic of Singapore in London and the British High Commission in Singapore participated in the dialogue.
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