Featured Product

    HMT and MAS Forge Partnership for Financial Services Cooperation

    July 08, 2021

    MAS and Bank of France (BDF) successfully completed a wholesale cross-border payment and settlement experiment using central bank digital currency (CBDC). Additionally, HM Treasury, or HMT, and MAS announced the launch of a new Financial Partnership at the sixth UK-Singapore Financial Dialog. The Partnership is backed up by a memorandum of understanding that aims to reduce friction for firms serving UK and Singapore markets by recognizing that each other’s financial services regulatory regimes achieve similar outcomes. UK and Singapore will explore opportunities for greater financial cooperation, including enhanced information sharing, closer cooperation in international fora, accelerating green finance, and cyber-security cooperation. The next Financial Dialog is expected to take place in 2022.

    MAS-HMT Partnership. As part of the key results of this dialog, an industry-led UK-Singapore business roundtable will convene on July 01 to discuss approaches and potential cross-border collaboration in supporting the transition toward low-carbon and scaling voluntary carbon markets. The two countries also signed a memorandum of understanding to enhance bilateral cyber-security cooperation, including the sharing of cyber-related information and supervisory best practices. The following are the other key highlights of the dialog:

    • Discussed possible areas for enhanced collaboration, particularly in cross-border financial regulation.
    • UK to update Singapore on its new regime for marketing of overseas funds and its review of the Solvency II regime for insurance firms
    • Discussed developments related to the global asset management industry, including the global norm of portfolio delegation, and agreed to maintain a dialog on these developments
    • Discussed ongoing efforts to tackle climate change and reaffirmed support for mandatory climate-related financial disclosures aligned with the Task Force for the Climate-related Financial Disclosures (TCFD) recommendations
    • Both countries to explore collaboration on a biodiversity pilot study, which will inform research into how nature-related risks will affect the financial system and contribute to this area of growing importance
    • Recognized the need to conclude a credible and balanced Article 6 package of the Paris Agreement at the COP26, to support the development of carbon markets
    • Discussed global developments and the evolving regulatory regime for stablecoins, and agreed to exchange regular updates on their respective regulatory approaches

    MAS-BDF Experiment. In another recent development, MAS and the Bank of France (BDF) announced the successful completion of a wholesale cross-border payment and settlement experiment using central bank digital currency (CBDC). The experiment, supported by J.P. Morgan’s Onyx, simulated cross-border transactions involving multiple CBDCs (m-CBDC) on a common network between Singapore and France. This is the first m-CBDC experiment that applied automated market making and liquidity management capabilities to reap cross-border payment and settlement efficiencies. This experiment is also one of the last of BDF’s wholesale experiment programs, which will be achieved by Fall 2021. The experiment simulated cross-border and cross-currency transactions for SGD CBDC and EUR CBDC; it was conducted using a permissioned, privacy-enabled blockchain based on Quorum technology and the following four key outcomes were achieved:

    • The demonstration of interoperability across different types of cloud infrastructure. Blockchain nodes were set up across private and public cloud infrastructures in both countries. 
    • The design of a common m-CBDC network that enabled the two central banks to have visibility on cross border payments, while retaining independent control over the issuance and distribution of their own CBDC. 
    • The setup of an experimental m-CBDC network that incorporated automated liquidity pool and market-making service for EUR/SGD currency pairs. The use of smart contracts automatically managed the EUR/SGD currency exchange rate in line with real-time market transactions and demands. 
    • The simulation of an experimental m-CBDC network that showed that the number of correspondent banking parties involved in the payment chain for cross-border transactions can be reduced. Consequently, the number of contractual arrangements, the Know Your Customer (KYC) burden, and the associated costs could be cut down. 

     

    Related Links

    Keywords: Europe, Asia Pacific, UK, Singapore, Banking, Cyber Risk, Carbon Markets, Disclosures, Climate Change Risk, TCFD Recommendations, ESG, Sustainable Finance, Taxonomy, MoU, MAS, HM Treasury

    Featured Experts
    Related Articles
    News

    US Regulators Release Stress Test Scenarios for Banks

    The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).

    February 28, 2024 WebPage Regulatory News
    News

    Asian Governments Aim for Interoperability in AI Governance Frameworks

    The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.

    February 28, 2024 WebPage Regulatory News
    News

    EBA Proposes Operational Risk Standards Under Final Basel III Package

    The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.

    February 26, 2024 WebPage Regulatory News
    News

    EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS

    The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.

    February 23, 2024 WebPage Regulatory News
    News

    ECB to Expand Climate Change Work in 2024-2025

    Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.

    February 23, 2024 WebPage Regulatory News
    News

    BIS Bulletin Examines Cognitive Limits of Large Language Models

    The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.

    January 25, 2024 WebPage Regulatory News
    News

    ECB is Conducting First Cyber Risk Stress Test for Banks

    As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.

    January 24, 2024 WebPage Regulatory News
    News

    EBA Continues Momentum Toward Strengthening Prudential Rules for Banks

    A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.

    January 24, 2024 WebPage Regulatory News
    News

    EU and UK Agencies Issue Updates on Final Basel III Rules

    The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards

    December 19, 2023 WebPage Regulatory News
    News

    Industry Agency Expects Considerable Uptake for Swiss Climate Scores

    The Swiss Federal Council recently decided to further develop the Swiss Climate Scores, which it had first launched in June 2022.

    December 18, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8952