Singapore central bank to invest £3 billion in local equities, reg changes planned  

Chee Hong Tat, deputy chairman of the Monetary Authority of Singapore (MAS), Singaporeʼs central bank, has outlined a “pro-enterprise” regulatory reform package alongside almost £3 billion of planned investment in local equities.

Singapore’s regulatory regime had “drifted away” from its initial focus on disclosure rules and become “too prescriptive and onerous” in places, said Chee, who is also Singapore’s minister for transport and second minister for finance, in a speech published on February 25.

While past corporate failures had dented investor confidence, the “layers of rules” imposed as a result had increased compliance costs, may not have increased protection for investors, and might even have created a “false sense of security”, he said.

Responsibility for reviewing initial public offering (IPO) applications would now sit solely with Singapore Exchange Regulation (SGX RegCo) and prospectus requirements would be streamlined, he added. “Overall, firms seeking an IPO can expect an approval within 6-8 weeks. The streamlined listing process is an improvement, and compares favourably with leading financial hubs.”

Common problem  

Singapore was not the only jurisdiction grappling with how to get more companies to list on its stock exchanges, Chee said. “Growth companies from around the world will want to seek out a US listing because of the valuations and liquidity that they can obtain there. And increasingly too, we see investors from around the world are also drawn to invest in US markets, because these have outperformed global indices for a number of years.”

Earlier this month, the European Securities and Markets Authority (ESMA) held a conference in Paris that sought to address the same underlying challenge of growing its capital markets. The European Commission has even rebranded its decade-old Capital Markets Union initiative as the Savings and Investment Union, in an effort to make it more comprehensible to EU citizens.

The UK government has also tasked its financial regulator with removing obstacles to growth, and consulted on draft legislation to create the Private Intermittent Securities and Capital Exchange System (PISCES) — a new type of stock exchange that will allow private companies to sell shares without a public listing.  

Equity Market Development Programme

The MAS has therefore planned a £3 billion Equity Market Development Programme (EMDP) to invest through fund managers with a “strong focus” on Singaporean equities, and will begin the vetting process in the next few months.

The government would also expand its Grant for Equity Market Singapore (GEMS) scheme to include investment research for pre-IPO companies, Chee added. A lack of available research was often given as a reason for not investing. Further details of GEMS, including how the research would be pushed out to investors, would be announced in mid-2025.