Looking Back: 2022
Staying focused on fulfilling Singapore's commitments under the United Nation's 2030 Sustainable Development Agenda and Paris Agreement, in 2022, the Singapore Government continued to roll out various measures and incentives to help businesses and its people transition to sustainable development and sustainable living. According to a study by McKinsey (as reported in January 2022), an extra S$3.5 trillion is required each year for the world to get to net-zero in 2050. Therefore, financing is critical to support Singapore's commitment to achieve net zero emissions by 2050.
To this end, the Singapore Green Bond Framework was launched to lay the foundation for the issuance of green bonds by the Singapore Government to finance expenditures in support of the Singapore Green Plan 2030, such as green infrastructure projects.
To boost investors' confidence on sustainable financing products, the Monetary Authority of Singapore (MAS) has tightened the disclosure and reporting guidelines for retail ESG funds. Investors and financial institutions now have access to better quality environmental, social and governance ("ESG") data on ESGnome, an online disclosure portal set up by Singapore Exchange (SGX) to improve ESG reporting by listed issuers.
Singapore endeavours to grow our digital economy and maritime industry while advancing our climate change agenda. So, environmental sustainability standards are introduced for data centres, the Green Ship Programme and Green Port Programme were enhanced to incentivise the use of low or zero-carbon marine fuel and a legislative framework was put in place to govern and facilitate charging of electric vehicles.
The "social' and "governance" elements in ESG are not overlooked as directors and chief executives of companies are to observe the principles in a new Code of Practice to prevent lapses in workplace safety and health and companies are required to keep a register of nominee shareholders.
As part of Singapore's continuing efforts to further enhance its capabilities and attractiveness as an international dispute resolution and debt restructuring hub, a new framework for conditional fee agreements was introduced and the Singapore International Commercial Court (SICC) is given jurisdiction over international restructuring and insolvency matters.
Even before the "crypto winder" descended on us in mid-2022, MAS has cautioned that cryptocurrency trading is highly risky and not suitable for retail investors. A set of guidelines outlining restrictions on promoting digital payment tokens (incl. cryptocurrencies) to the Singapore public were issued. As the cryptocurrency market suffered a setback in 2022, Singapore emerges as the crypto restructuring hub. The Singapore Courts granted the first reported freezing injunction against "persons unknown" for stolen cryptocurrency assets. Separately, another landmark decision by the Singapore Courts recognised non-fungible tokens (NFTs) as property.
The following developments took place in line with the Singapore IP Strategy 2030, a 10-year blueprint to strengthen Singapore's position as a global intangible assets and intellectual property ("IP") hub:
- new simplified track for IP litigation;
- legislative changes enabling a more efficient and business-friendly IP registration system;
- enhanced IP border enforcement measures.
To combat the proliferation of online scams, banks and financial institutions are required to implement security measures to deal with scams and e-commerce marketplaces are given safety ratings. In addition, cybersecurity service providers are subject to a new licensing framework.
Other key areas with important developments include:
- New converged Code of Practice for Competition in the provision of telecommunication and media services was issued.
- Tax incentive schemes for family offices in Singapore were enhanced.
- New guidance to financial institutions on assessing responsible artificial intelligence (AI) use was issued.
- Trade sanctions were imposed on Russia in response to its invasion of Ukraine.
Gazing Into: 2023
Following from the 26th Conference of Parties (COP26) to the United Nations Framework Convention on Climate Change ("UNFCC") in 2021, Singapore announced in October 2022 that it will raise its national climate target to achieve net zero emissions by 2050. This is part of Singapore's Long-Term Low-Emissions Development Strategy ("LEDS") document to the UNFCC.
Among other things, the following key areas will be actively explored to support Singapore's LEDS:
- Leveraging low-carbon hydrogen as an alternative fuel and industrial feedstock. The National Hydrogen Strategy was announced to support this.
- Strengthening collaborations with international partners on carbon markets, green finance and low-carbon technologies. A global carbon marketplace based in Singapore was launched to provide for secure and reliable high-quality carbon credit trading.
- Implementing an effective carbon tax regime. Legislative changes to the Carbon Pricing Act 2018 were passed by Parliament to increase carbon tax rate progressively from 2023 to 2026.
- Scaling up use of solar power as renewable energy alternatives. There have been active developments in the area of solar energy, which remains Singapore's most promising renewable energy source.
In September 2022, the Monetary Authority of Singapore ("MAS") published the "Financial Services Industry Transformation Map (ITM) 2025" which outlines the vision of further developing Singapore as a leading financial centre in Asia. The strategies to do so include, among other things, developing the potentials in the following areas:
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Development of innovative solutions to scale up sustainable and transition financing. The Green Finance Industry Taskforce in Singapore aims to finalise a new taxonomy for Singapore-based financial institutions that will help businesses and investors identify with greater certainty projects and investments that promote sustainability. This would in turn encourage more capital flow towards sustainability activities.
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Enhancement of payments connectivity. Apart from embarking on innovative projects like Project Nexus and Project Orchid, Singapore regulators are proposing regulatory changes to support innovation in e-payment landscape and strengthen participation in SGQR code scheme.
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Building an innovative and responsible digital asset ecosystem. In this regard, MAS sought comments on the regulatory approach for stablecoin.
MAS will maintain its policy against cryptocurrency speculation and tighten the regulation of digital payment token ("DPT") service providers. It has proposed to enhance regulatory measures for DPT service providers to reduce the risk of consumer harm in cryptocurrency trading and to regulate Singapore DPT service providers carrying out activities outside Singapore for the purposes of anti-money laundering and countering of the financing of terrorism.
In addition, the following key trends or developments are to be noted:
- Need for regulatory frameworks to govern responsible use of metaverse as a primary computing platform and the commercialisation of metaverse.
- New obligations on regulated online communication services and internet access service providers to ensure online safety.
- Enhanced corporate governance practices on board renewal and remuneration disclosures for issuers listed on the Singapore Exchange Securities Trading Limited (SGX-ST).
- Proposed legislative changes to address data, digitalisation and corporate transparency issues for business entities in Singapore.
- Proposed new regulatory framework for collective management organisations for copyright owners.
- Proposed new disclosure framework to increase transparency and commercialisation of intangibles of business entities.
- Enhancements to healthcare services framework to strengthen safeguards for patient safety and welfare.
Full Report
Click on the link below for the full report which provides summaries of the key legal developments related to the above areas.
