Singapore central bank to boost funding for next generation growth companies

The MAS said it wants to strengthen financing channels for next-generation Asian growth companies and build technology infrastructure to drive innovation.

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The logo of the Monetary Authority of Singapore (MAS) is pictured at its building in Singapore in this February 21, 2013 file photo. Reuters

The Monetary Authority of Singapore (MAS) said on Monday (Feb 13 that it will support the recommendations of the Committee on the Future Economy (CFE) by taking specific measures to strengthen financing channels for next-generation Asian growth companies and build technology infrastructure to drive innovation.

The CFE report has recommended to support companies with strong growth potential to scale up and internationalise. Singapore aims to be the financing hub for these next-generation Asian growth companies, MAS said.

"The MAS will be announcing over the next few days specific initiatives to strengthen funding for such growth companies," the statement said.

Some Financial Sector Initiatives

The Monetary Authority said it will simplify the authorisation process and regulatory framework for venture capital (VC) managers to support start-ups.

"A vibrant VC industry is an essential component for the start-up ecosystem."

VC and Private Equity (PE) assets under management in Singapore have grown by an average 30% per year in the past five years, the MAS noted, adding that the industry is still at an early stage and there is scope to expand both the number and variety of VC managers.

The MAS said it will strengthen the role of finance companies as active providers of SME finance and study the introduction of Dual Class Share (DCS) structures to support the growth of high-tech companies.

The central bank said it will also explore the scope to develop private market financing platforms as such platforms can help successful entrepreneurs unlock capital so that they can go on to start new and innovative businesses.

Building Technology Infrastructure

The MAS has been working closely with the industry on technology infrastructure projects to drive innovation, boost market efficiency, enhance customer service, and extend Singapore's connectivity with the region, the authority said in the Feb 13 statement.

It said it will develop an electronic marketplace for trade finance assets.

"An electronic trade finance platform will enable participating banks to distribute trade finance assets internationally, unlock capital to originate new trade finance lending, and increase the supply of trade finance for the region."

The MAS said it is working with banks to anchor e-FX trading platforms that can help to enhance price discovery and FX trade execution, especially for Asian currencies.

This will enable market participants to benefit from better liquidity and greater efficiency in executing FX transactions, and sharpen Singapore's edge as Asia's leading FX hub, MAS noted.

The Authority is also setting up a Natural Catastrophe Data Analytics Exchange which will seek to expand the availability of high-quality data on catastrophes in Asia by pooling industry loss data and collecting economic data through remote sensing technologies.

This enhanced data will help increase catastrophe insurance penetration in the region, MAS said.