Singapore to ease regulations on start-ups as part of fintech push

Speaking at the launch of financial technology hub Lattice80, Tharman Shanmugaratnam, MAS chairman and deputy prime minister, said efforts would be made to simplify and shorten the amount of time it takes to register a new firm - necessary in order to access tax breaks and other incentives - and make VC managers exempt from certain business conduct requirements. The MAS will conduct a public inquiry on its proposals in January 2017 with a view to introducing changes by July.

Shanmugaratnam added that consideration would also be given to altering the incentives currently available to asset managers to make them more suitable for venture capital and changing the criteria that must be met to qualify for these incentives.

Lattice80 is seen as integral to Singapore's efforts to develop a fintech ecosystem. The subsidized co-working space, which occupies 30,000 square feet close to the city's central business district, was launched by local investor Marvelstone Group. It has already signed up 20 tenants exploring technologies ranging from blockchain to trading systems.

Singapore claims to be home to more than 300 fintech start-ups, while more than 20 global banks and insurance companies have set up innovation labs and research centers in the city. Cooperation agreements have also been signed with fintech centers in Australia, India, Korea and the UK.

Shanmugaratnam observed that it is inaccurate to position fintech as a battle between innovative start-ups and traditional financial institutions, in part because the latter are investing heavily in the space. He noted that traditional financial institutions have the advantage of scale and reputation, but if they fail to keep up with technological evolution their business models will be disrupted. However, many fintech start-ups are likely to fail as well.

"It is in the nature of innovation that few new ideas and technologies will develop scale, sustain funding and end up as winners in the market. The collapse of many peer-to-peer lending platforms in the US, UK, and China is a reminder that it will not be plain sailing for fintech companies," Shanmugaratnam said.

Earlier this year, PayPal launched an incubation program in Singapore that offers infrastructure, mentorship and direction to local fintech start-ups. The nine-month program known as Start Tank is also expected to offer access to funding through PayPal's network and VC connections.

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• Topics
• Southeast Asia
• Early-stage
• Regulation
• Venture
• Technology
• Financials
• Singapore
• seed