Singapore represents one of the most vibrant financial markets in the world. The majority of local investors hone their skills on the local Singapore Exchange (SGX), trading stocks and bonds of various Asian and international companies. Forex is another extremely popular option in the country, attracting large business capital.
The local government had to introduce strict policies so that all of this could work. As with other Singaporean regulations, the emphasis is on liberal growth within the well-defined confines of the law. The country organizes numerous subsidies and festivals to assist startups and stimulate entrepreneurial spirit.
Fintech Regulation in Singapore
As mentioned, the fintech industry has full backing from the local government. The main governing body overseeing all financial operations is the MAS or the Monetary Authority of Singapore. Besides this organization, the field is regulated by several other agencies with varying jurisdiction.
If a fintech company wants to participate in the local market, it needs to acquire the following licenses from these agencies:
- Financial company license (according to FCA or the Finance Companies Act)
- Financial advisory license (according to FAA or the Financial Advisors Act)
- Capital Market Services license (according to SFA or the Securities and Futures Act)
- Insurance incense (according to IA or the Insurance Act)
- Moneylending license (according to the Moneylending Act)
Besides acting as a key regulator of the Singaporean market, MAS also fulfills the role of the central bank. It has the full purview of all transactions and market participants. Fintech, in particular, has been MAS's point of emphasis in recent years, with the country investing hefty sums in the development of local tech solutions.
Exploring Government Initiatives
Besides creating a strong legal framework, the country supports its companies by organizing various events. The local financial experts have created a perfect environment where businesses flourish and revolutionary ideas come to pass. The majority of these events are spearheaded by MAS.
Fintech Regulatory Sandbox
The idea of the Fintech Regulatory Sandbox was first introduced in the early 2010s and was finally implemented in November 2016. The main purpose of this project was to stimulate Singapore's financial innovation and help deliver advanced services to local users.
To fulfill this goal, MAS created a controlled environment where entrepreneurs and various innovators could test their products. Upon leaving the project, where they had full regulatory freedom, the applicants had to adhere to current regulatory requirements.
Another innovation came in 2019 when the Monetary Authority of Singapore introduced a similar project in the form of Sandbox Express. This particular sandbox focused on market operators and insurance brokers by creating a safe environment for testing financial products and services.
The last iteration of the MAS sandbox came in November 2021. Sandbox Plus further expands on the original concept by providing grants to the best innovators. Sandbox Plus was the biggest out of the three initiatives, expanding the original participation eligibility for applicants.
Singapore Fintech Festival
To better explain the country's commitment to fintech, we need to mention the annual Singapore Fintech Festival. As part of the sandbox initiative, the event was organized by MAS. The festival's main goal was to create a bond between citizens and fintech companies in an attempt to hasten adoption and increase public support.
Keep in mind this isn't a small local event; in 2021, there were more than 60,000 participants at the festival. The event was broadcast to numerous countries, gaining over 2 million views on social media and television. On top of that, MAS also created Deal Friday, which connects startups and investors.
Innovation Grants
For a while now, Singapore has been known as a place where ideas bloom. As with other scientific fields and industries, the local government sponsors innovation in fintech by providing grants to prospective startups.
According to this scheme, MAS provides funds that cover up to 70% of the qualifying cost. The sum can’t exceed 400,000 Singapore dollars. After vetting projects, these products are eligible for governmental use on different levels.
Conclusion
The great thing about MAS is that it supports the local stock exchange and Forex trading companies in Singapore. The country invests enormous funds in innovation, and many of these solutions are integrated into public companies' operations. With fantastic laws and numerous initiatives, Singapore remains one of the best places for fintech startups.