The government has accepted most of the proposals for reform of the financial sector put up by the government-appointed private sector committee on financial sector competitiveness made public its report offering detailed proposals to promote Singapore as Asia's premier financial centre.
The key areas targeted for reform by the committee include fund management, trust companies, treasury/risk management, the stock market, general debt issues, corporate finance and venture capital, insurance and reinsurance, and cross-border electronic banking. Proposals accepted by the government include:
- encouraging statutory boards and government-linked companies to borrow from the debt market;
- having at least 20% of public sector funds managed by private fund managers in Singapore within 3 years;
- expediting listing of a Singapore stock index on SIMEX and allowing Singapore stock exchange members to trade stock index futures and options on SIMEX;
- reviewing and liberalizing investment limits for insurance funds;
- permitting share buy-backs by listed companies;
- reviewing the system of fixed brokerage rates;
- making more shares available for placement to institutional investors in a public offering;
- allowing more stock options to be made available to employees of listed companies and extending the life of stock options;
- encouraging listings on the Singapore stock exchange by foreign companies by simplifying procedures and offering incentives; and
- issue by the government of longer term government bonds for benchmarking and depth creation in the market.
Tax related recommendations of the committee are still under consideration. Details have to be finalized and regulatory framework set up including amendment of relevant laws and regulations and stock exchange and SIMEX rules, before the accepted proposals are implemented.