Looking Back: 2021
In 2021, the subject of sustainability was high on the agenda for Singapore as the Government announced the Singapore Green Plan 2030 to strengthen Singapore's commitments under the United Nation 2030 Sustainable Development Agenda and the Paris Agreement. Recognising that financial institutions (FIs) and listed companies play a significant role in funding sustainable developments and bringing awareness to sustainability issues, regulatory frameworks are put in place to require FIs, as well as companies listed on the Singapore Exchange Securities Trading Limited (SGX-ST), to make climate-related disclosures consistent with international standards.
FIs are given guidance on incorporating environmental considerations in their risk management frameworks and Singapore implements the Salvage Convention to reward salvors which help to prevent pollution events at sea.
The Singapore Exchange Limited (SGX) took a progressive step and launched the special purpose acquisition company (SPAC) listing framework to provide companies with an alternative capital fund raising route.
Various legislation took effect to support and facilitate cross-border trade amid the supply chain challenges exacerberated by the COVID-19 pandemic. These include the Apostille Act 2020 that facilitates cross-border use of public documents and the Multimodal Transport Act 2021 that facilitates market access for logistics operators in ASEAN. The Singapore Court of Appeal dealt with legal issues and uncertainties arising from trade finance transactions that are particularly relevant when markets are facing increasing financial distress. A legal framework has been put in place to enable the digitalisation of transferable documents that are often used in cross-border trade to combat fraud.
The COVID-19 pandemic continues to put tremendous strain on the economy globally and in Singapore. Various relief measures were implemented to help industries which are negatively affected, notably the Built Environment sector. With more business running into financial difficulties, the Singapore courts have ruled on significant restructuring and insolvency issues relating to construction law, cross-border insolvencies and the judicial management process.
With the proliferation of hacking incidents, personal data protection remains a key issue for businesses and individuals. Therefore, the Personal Data Protection Act 2012 and the accompanying regulatory documents were updated to strengthen organisational accountability. The Personal Data Protection Commission dealt with a novel issue relating to opinion data auto-generated by artificial intelligence (AI).
In the 2021 edition of a well-regarded survey, Singapore shared the top position with London as one of the most preferred seats of international arbitration in the world. To enhance Singapore's attractiveness as a leading dispute resolution hub, a new avenue for funding, conditional fee agreements, will be allowed and the scope of permissible third-party funding has been expanded to address concerns of parties in the arbitration and legal proceedings over costs in such proceedings.
As Singapore unveiled its Singapore IP Strategy 2030, a 10-year blueprint to strengthen Singapore's position as a global intangible assets and intellectual property (IP) hub, the new Copyright Act came into force to strengthen the copyright ecosystem. Legislative changes were also passed in Parliament to enhance and facilitate the registration processes of IP rights.
Other key areas with important developments include:
- Revised timeline for transition from Singapore Dollar Swap Offer Rate (SOR) to Singapore Overnight Rate Average (SORA) for a range of financial products.
- More stringent requirements on Technology Risk Management for FIs.
- Updated exemption frameworks to allow foreign branches or foreign related corporations of Singapore FIs to provide cross-border financial services in Singapore.
- A new guide for businesses to understand competition law issues arising from business collaborations.
- Implementation of property cooling measures to promote continued housing affordability.
Gazing Into: 2022
At the 26th Conference of Parties (COP26) to the United Nations Framework Convention on Climate Change (UNFCC) which took place from 31 October 2021 to 12 November 2021 in Glasgow, Singapore joined the Powering Past Coal Alliance (PPCA) and has signed the Global Coal to Clean Power Transition statement.
Constituting part of the Government's efforts to deal with climate change, legislative changes have been passed by Parliament to implement a regulatory framework to nudge electricity generation licensees to adopt low carbon generation sources. In addition, the newly launched national standards for Renewal Energy Certificates will support renewable energy deployment in Singapore and the region.
Adequate financing is key to supporting businesses transition into greener practices. Various initiatives are being developed to encourage and build investors' confidence in sustainability financing, including (i) a taxonomy for sustainability financing to guide Singapore financial institutions (FIs) on categorising "green" or "greener" activities, (ii) a common platform for ESG (environment, social and governance) disclosures; and (iii) a carbon exchange and marketplace that provides organisations with high-quality carbon credits.
Against the backdrop of a few high-profile incidents involving the sale and trading of cryptocurrencies and the rapid evolution of the technology supporting digital payments, more regulations and guidelines governing digital payment tokens are expected.
The coming into force of the Regional Comprehensive Economic Partnership (RCEP) Agreement will promote the trade and business ties between Singapore and the RCEP countries.
New Rules of Court governing civil proceedings in Singapore courts will be implemented to, among other things, modernise and expedite the litigation process. Structural changes to the judicial service and legal service were implemented so that the two services may benefit from greater specialisation and adopt a more flexible personnel management framework to meet the demands of an increasingly complex and rapidly evolving legal landscape. All of the Singapore statutes have been revised and updated to, among other things, simplify and modernise the language of more than 500 Acts, making the Acts more reader-friendly and accessible to the layman. These developments complement the efforts to strengthen Singapore's position as the leading dispute resolution hub in the region.
In addition, the following key trends and/or developments are to be noted:
- Enhanced corporate governance practices among companies listed on the Singapore Exchange Securities Trading Limited (SGX-ST) with new requirements on Board diversity and whistle blowing policies.
- Four digital banks, which were granted licences to offer digital banking services in Singapore, are expected to commence operations in 2022, delivering more choices to Singapore consumers.
- Use of technology to facilitate sharing of information to counter money laundering and sharing of data to address issues in the financial services industry and sustainability financing.
- The Infocomm Media Development Authority (IMDA) is partnering various stakeholders to drive adoption and commercialisation of 5G solutions.
- New legal requirements to enhance cybersecurity standards and counter foreign interference by electronic communications activity.
- Possible increase in the goods and services tax (GST), as surmised from the 2022 New Year Message by PM Lee Hsien Loong.
Full Report
Click on the link below for the full report which provides summaries of the key legal developments related to the above areas.
