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Singapore reviews venture capital regulations for fintech

Singapore is reviewing its regulatory framework for venture capital in a bid to improve funding for financial technology startups.25 Aug 2016

Singapore is keen to become a top Asian destination for financial technology companies but suffers from a shortage of capital and of tech talent, Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), has said.

Speaking at the launch of MAS's new financial technology innovation lab, Looking Glass @ MAS, Menon said that Singapore is lagging behind leading centres of financial technology innovation when it comes to capital.

"Although there are lots of VCs (venture capitalists) here, there are many startups and good ideas chasing funds," Menon said.

MAS is therefore reviewing the regulatory requirements on these types of funds, he said.

"We have just started the review so I can't say more. Our policy framework is evolving," Menon said.

Technology venture capital expert Bryan Tan of Pinsent Masons MPillay, the Singapore joint venture partner of Pinsent Masons, the law firm behind Out-Law.com, said: "The regulation of venture capital funds in a one-size-fits-all regulatory structure leaves room for improvement – just like in the west, a number of the more successful venture capital funds have drawn their talent from successful founders instead of from the financial industry."

Global venture capital funding in financial technology has more than doubled in the past year, a recent study by KPMG and CB Insights found

VC funds totalling $13.8 billion were invested in financial technology businesses last year, up from $6.7bn in 2014, the study said.

According to the KPMG and CB Insights report, $7.7bn of VC funding for financial technology companies in 2015 was invested in North America in 378 deals, with $4.5bn invested in Asia in 130 deals. In Europe, there were 125 VC funding deals for financial technology businesses recorded, valued at $1.5bn in total.

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