Wednesday, 13 Jun 2012
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UK/Singapore: Visit of Lord Mayor of City of London
British High Commission Singapore
Lord Mayor’s visit well-received by Singaporean interlocutors keen to hear how the City is handling the economic slow-down, the eurozone crisis and the debate on banking regulation. London’s pre-eminence as financial centre recognised, with Singapore vying for the lead in some sectors (wealth management), whilst settling for regional role in others (insurance/reinsurance, capital markets). Lots of appetite for cooperation on eg regulation, countering fraud, high speed transactions and their risk assessment. Useful discussions on retail banking and legal services liberalisation.
The Lord Mayor (LM), Alderman David Wootton, visited Singapore on 24-25 May, accompanied by the Sheriff, Alderman Alan Yarrow.
The LM used a speech to the British Chamber and an in-depth interview with the Business Times, as well as his meetings, to stress the City’s resilience and continuing leadership in financial services. London had held onto its share of the global financial services sector despite national and European recession.
The LM heard widespread messages of support for the City’s continuing role. Lim Siong Guan, Group President of GIC, hoped London could help Europe out of its current malaise. He expressed concern about lack of expansion at Heathrow.
Magnus Bocker, CEO of the Singapore Exchange (SGX), said Singapore aspired to be “the London of Asia”. The SGX was growing fast and Singapore would soon have more assets under management than Zurich. He thought Singapore was benefitting from the “Chinafication” of HK, as Singapore was seen as a more neutral location for investors. There was a high degree of trust between the LSE and the SGX, and excellent inter-operability. The LM pressed for SGX to adopt the new system of checks for high-speed transactions being introduced by the LSE. Bocker hoped for swift resolution of regulatory disagreements in Brussels.
Ravi Menon, Managing Director at the Monetary Authority of Singapore (MAS) said Singapore aimed to be a global leader in financial sectors such as foreign exchange, wealth management, derivatives, commodities, REITS. In other areas, such as insurance/reinsurance and capital markets, they sought to be a regional hub. On offshore Renminbi trading, Singapore wanted to be one of the key nodes. Menon felt there was room for both London and Singapore, but London had a time zone advantage.
The LM and Menon discussed retail banking liberalization in some detail. Menon was clear that Singapore’s priority was protecting retail customers. The EU/Sinagpore Free Trade Agreement negotiations were now focussing on the detail of this issue, along with the other outstanding items..
Menon said he would look into the new Combatting Financial Crime course and exam being offered by the UK’s Chartered institute for Securities and Investment. His staff referred to a Financial Crime Seminar being organized by the Association of Banks in Singapore. The LM offered to send an expert from the City of London Police to participate. Menon asked how London’s financial institutions were dealing with the proposed US Foreign Account Tax Compliance Act regulations. LM said he had not heard any complaints, but offered to follow up with the MAS on the detail. LM was particularly interested to hear from Menon that, in addition to its regulatory role, the MAS had a dedicated business development department, charged with actively considering how best to develop Singapore as a financial centre. LM thought this an excellent initiative.
The LM was briefed by major British law firms holding Qualifying Foreign Law Practice (QFLP) licences which give them more freedom than other international firms. All are pressing for further liberalization, particularly the freedom to litigate in Singapore’s courts, to offer training contracts and to do pro bono work.
In his meeting with Attorney-General Sundaresh Menon the LM extolled the virtues of truly open and transparent legal sectors which enabled firms such as his own (Allen & Overy) to “follow the business around the globe”. He noted that liberalization in Japan had benefitted local firms too, as demand had increased. The AG said he “shared this philosophy”. Singapore was keen to play the role for Asia that London played globally, and to “develop its axis with London.” Singapore was also growing its reputation as an arbitration centre. With only 5000 lawyers (of which 1000 foreign) for a population of 5 million, Singapore needed to expand its legal sector. But he saw this as a series of gradual steps. The AG intended to see how the upcoming 2nd round of QFLP licence-issuing went and then take stock.
Plenty of substance to follow up, and some good relationships forged. The detail of the exchanges and the appetite to hear from the Lord Mayor about developments in London demonstrate both the amount Singapore and the City have in common, and the value of keeping Singapore regularly on the Lord Mayor’s schedule.
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