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Singapore is flexing its fintech muscles

Business Insider logoBusiness Insider 13/3/2018 Maria Terekhova

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Singapore Exchange (SGX) has announced two new measures designed to make the city more attractive to technology companies, including fintechs.

First, SGX is proposing to allow companies listing on it to issue dual-class shares, a structure preferred by tech companies’ founders, as it lets them keep control of the entity after taking it public, according to Bloomberg.

Second, SGX has partnered fintech Smartkarma, which runs a platform that gives investment insights into Asian markets, to launch a cloud-based platform that allows capital market stakeholders (including investors, analysts, and public companies) to communicate and share information more seamlessly and stay on top of market trends.

Singapore is one of many APAC players vying to attract fintech activity and companies in a race to become the region’s predominant tech hub. At the moment, China is miles ahead in terms of producing the biggest companies, but rivals like Singapore and Hong Kong are trying to up their game.

Singapore, for instance, has been passing new laws to spur fintech innovation in the city, striking partnerships with fintech-friendly regulators like the UK's FCA to give local companies access to more diverse markets, and has published detailed roadmaps on how to boost its status as a regional fintech hub. That SGX is now trying to making listings more attractive, and stay on top of market trends better, are likely the latest steps in this arms race.

China may still be APAC's big fish when it comes to producing tech stars, but Singapore seems well on its way to carving out a different niche for itself. While China’s status as the leading tech and fintech giant powerhouse in APAC is unlikely to wane, its ability to convince these companies to stay and list on the mainland is less certain. China has been taking a reactionary stance to fintech regulation, and especially to sectors like online lending, which has driven some of its most successful fintechs to seek listings elsewhere. Because Singapore already has a reputation for being progressive and fintech-friendly, as well as having links to international markets, and it now seems to be streamlining tech listings even further, it could well secure a spot for itself as the go-to location for fintech listings in the region.

This is especially the case as it’s already secured Chinese alt lending giant Lufax to list on its exchange, beating the mainland and Hong Kong. By attracting regional fintech behemoths to list in its jurisdiction, besides becoming a hotbed for fintech activity, Singapore also stands to earn transaction fees, as well as spur business for local traders and analysts.

BI Intelligence, Business Insider's premium research service, has written the definitive Fintech Ecosystem report that:

  • Looks at how the environment in which the fintech industry operates is changing, and what that means for the digitization of financial services.
  • Gives an overview of the main subsegments within the global fintech industry, and discusses which categories have had to adapt to survive, which have reaped benefits from their original game plans, and which new segments have come to the fore in the past twelve months.
  • Outlines the adaptations that incumbent financial institutions have begun making to adjust to an economy that's inevitably shifting to digital, and in which tech-savvy fintechs are increasingly setting the standards.
  • Discusses what the future of financial services will look like as fintech embeds itself into the financial mainstream.

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