The 9th UK-Singapore Financial Dialogue took place in Singapore. The two countries discussed working together on sustainable finance and FinTech, and also talked about recent developments in non-bank financial intermediation (NBFI) and efforts to improve cross-border payment connectivity.
Sustainable Finance
The UK and Singapore confirmed their dedication to increasing financing in support of the net zero agenda.
Developments in transition planning: The UK and Singapore reiterated the importance of globally comparable and sound transition plans for scaling transition finance. The UK provided an update on the Progress of the Transition Plan Taskforce (TPT)’s disclosure framework and outlined plans for introducing expectations for listed companies’ transition plan disclosures. The Monetary Authority of Singapore (MAS) shared its consultation on Transition Planning Guidelines, which set out supervisory expectations for financial institutions to have a sound transition planning process. They also noted the importance of ongoing work at G20, Financial Stability Board (FSB), Basel Committee’s Task Force on Climate-related Financial Risks (TFCR), International Organization of Securities Commissions (IOSCO) and Network of Central Banks and Supervisors for Greening the Financial System (NGFS) in this regard.
Disclosure standards, ESG ratings and data products: The UK and Singapore reaffirmed their commitment to implement the International Sustainability Standards Board (ISSB)’s standards to improve the consistency, comparability, and reliability of sustainability-related disclosures globally. The UK provided an update on its Sustainability Disclosure Requirements and its associated labelling regime. The UK and Singapore also discussed the voluntary codes of conduct for ESG ratings and data product providers published in their respective countries, noting that both codes were aligned with IOSCO’s recommendations. Both countries agreed to consider collaboration opportunities as the regulatory landscape evolves, including through IOSCO’s Sustainable Finance Taskforce.
Sustainable infrastructure and investment: The UK and Singapore acknowledged the substantial funding gap for Asia’s green and transition finance, and agreed that there are opportunities to mobilise private capital for the net zero transition. Building on the September 2023 UK-Singapore Strategic Partnership, the UK and Singapore will collaborate to develop and finance green finance and energy transition projects in the region. MAS provided an update on Singapore’s blended finance initiative, the Financing Asia’s Transition Partnership (FAST-P), which will bring together key public, private and philanthropic sector partners to mobilise financing to de-risk and finance transition and marginally bankable green projects in Asia.
Financial Technology and Innovation
The UK and Singapore shared their views on how to manage risks and take advantage of opportunities in the digital space.
AI (Artificial intelligence): The UK and Singapore talked about the risks of financial stability, cyber security, and supervision related to the increased use of AI in the financial sector. They both agreed that international standards are important for encouraging innovation while managing risks to consumers and financial markets. They also explored areas for collaboration through international organizations such as IOSCO and FSB.
Cryptoassets: The UK provided an update on its final plans to regulate cryptoassets, including activities such as exchange, custody, and lending. The UK also discussed its plans to regulate certain stablecoins and create a supportive environment for stablecoin issuers and service providers to operate in the UK.
Central Bank Digital Currency (CBDC): The UK shared updates on the progress made after the publication of the “digital pound” consultation response paper on 25 January 2024, including the design phase and a decision on whether to proceed with a retail CBDC. The UK also shared its thoughts on wholesale payments and the infrastructure supporting the settlement of tokenised transactions.
Tokenisation and distributed ledger technology (DLT): The UK and Singapore discussed their respective projects and initiatives in tokenisation and DLT. They agreed on the benefits of asset and fund tokenisation to the financial ecosystem, from broadened investor access to investment products to simplifying distribution and trading of such products digitally. As part of Project Guardian’s policymaker group, the UK Financial Conduct Authority (FCA) and MAS aim to advance discussions on the regulatory treatment of digital assets. Both countries agreed to share learnings on how regulatory regimes could facilitate responsible innovation.
Developments in the Non-Bank Financial Institutions (NBFI) Sector and International Payment Connectivity
The UK provided an update on recent developments aimed at addressing risks in the NBFI sector. Both countries emphasized the importance of improving authorities’ ability to monitor risks in NBFIs through better data gathering and sharing. They also agreed on the importance of finalizing international policy work on margining practices and NBFI leverage, and subsequently implementing agreed NBFI policies domestically. The UK and Singapore agreed to continue collaborating to address vulnerabilities associated with NBFIs, including at IOSCO and the FSB.
The UK and Singapore reaffirmed their dedication to the G20’s Roadmap to Enhancing Cross-Border Payments, including the FSB’s priorities for this year as outlined in its most recent progress report. The BIS Innovation Hub Singapore Centre also shared the progress of Project Nexus, a multilateral approach to connect domestic instant payment systems to enhance the speed, cost, transparency and accessibility of cross-border payments.
The UK and Singapore have agreed to continue engaging beyond the Dialogue by planning more cooperation in sustainable finance and FinTech, leading up to the next Financial Dialogue in the UK in 2025.
Two industry-led UK-Singapore business roundtables on Transition Planning and Generative AI are scheduled for 9 May 2024 and will involve industry participants from both countries.
During the Transition Planning roundtable, there will be discussions about current regulatory efforts and future steps for Financial Institutions and their portfolio companies as they move towards net zero.
The Generative AI roundtable will cover the challenges of this technology for regulatory compliance and strategies to use generative AI effectively while promoting innovation and protecting consumers.
The Dialogue was led 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. 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 also attended.
