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ASEAN SUMMIT 2018

Singapore, China to collaborate on fintech, regulating derivative trades

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Chinese Premier Li Keqiang (L) laughs with Singapore's Prime Minister Lee Hsien Loong (R) during a group photograph session with ASEAN leaders during the 21st ASEAN - China Summit, part of the 33rd Association of Southeast Asian Nations (ASEAN) Summit and Related meetings in Singapore, 14 November 2018.

TWO agreements penned between financial agencies will pave the way for China and Singapore to collaborate on fintech innovations and cross-border supervision of futures exchanges and intermediaries.

The Monetary Authority of Singapore (MAS) concluded and exchanged the cooperation agreements with the People’s Bank of China (PBOC) and China Securities Regulatory Commission (CSRC) this week during Chinese Premier Li Keqiang’s visit to Singapore.

The first agreement signed with PBOC calls for fintech cooperation between the two countries.  It aims to pave the way for joint research and innovation projects in the application of key technologies including digital and mobile payments.  It also provides for regulatory coordination with respect to cross-border expansion of fintech companies.

The MAS has signed a second memorandum of understanding with CSRC.  The two agencies look to exchange information and enhance supervision of futures exchanges and intermediaries that offer cross-border services.  They will also collaborate on the listing and trading of exchange-traded derivative products that have connections between both capital markets.

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The exchange of these regulatory agreements was witnessed by Mr Li and Singapore Prime Minister Lee Hsien Loong.  Mr Li is in Singapore to attend the 33rd Asean Summit and related events this week.

Additionally, two other private-sector tie-ups were concluded at the side of Mr Li’s visit.

Nets penned a memorandum of understanding with UnionPay International to support cross-border connection of their mobile wallets.  This private-sector tie-up allows users of NetsPay to scan and pay for purchases at around 10 million UnionPay QR code merchants globally; conversely, UnionPay customers can also spend at Nets merchants island-wide.

Nets and UnionPay will look at jointly setting up a research and development centre in Singapore.

On Wednesday, the Singapore Exchange (SGX) signed a strategic cooperation with Bank of China (BOC) and China Foreign Exchange Trade System and National Interbank Funding Center (CFETS) to promote jointly the CFETS-BOC Traded Bond Index and its sub-indices outside of China to international investors.

The bond indices, designed by CFETS and BOC, track the movements of the Chinese bond market and can be used by investors to benchmark their Chinese bond portfolio performance. The SGX will be the first exchange to distribute the CFETS-BOC traded bond indices outside of China. The launch of the bond indices is intended to catalyse the development of tradable China bond products and facilitate greater investments into China’s bond market by international investors.

MAS managing director Ravi Menon said: “This week’s signing of agreements between the financial regulators of China and Singapore bears testimony yet again to the growing strength of financial cooperation between our two countries.”

He noted that the private-sector agreements represent ‘firsts’ in their respective areas. “The launch of the CFETS-BOC Traded Bond Indices on SGX will help enhance bond connectivity between China and Singapore. The NETS-UPI tie up will allow a larger number of travellers between the two countries to make payments in each other’s markets.

“These four agreements will help to further deepen the growing connectivity between the financial sectors of China and Singapore,” he said.