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Minister of Finance Pierre Gramegna meets with Singaporean counterpart, Tharman Shanmugaratnam
On the last leg of his Asia trip, Minister of Finance Pierre Gramegna met with HE Tharman Shanmugaratnam, Deputy Prime Minister and Minister of Finance of Singapore, to discuss a number of points of common interest on the international agenda as well as bilateral issues.
Minister Gramegna and Minister Tharman had an exchange of views on the latest economic developments and shared their optimism that the economic recovery is on track.
Discussing the role both countries play in the context of the internationalisation of the Chinese currency, both Ministers agreed to intensify their cooperation on this issue. An international RMB Forum to be held in Luxembourg in 2015 will be an opportunity for both Ministers to address possible synergies between major hubs in the area of RMB business.
Minister Gramegna underlined during the discussions with his counterpart the commitment by the Luxembourg government towards increased tax transparency, an objective shared by his counterpart. Luxembourg and Singapore stress the need to ensure a level-playing field between all international financial centers. The renewed bilateral double taxation agreement will be ratified swiftly.
Earlier in the day, Minister Gramegna has given a key-note speech at a conference titled "Singapore and Luxembourg, combining excellence in international finance". The conference gathered about 200 professionals from both financial centers and focused on synergies in the asset management as well as the wealth management industries.
Minister Gramegna furthermore had a series of meetings with a number of major Singaporean financial actors.
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Luxembourg delegation calls for greater international finance cooperation with Singapore
Luxembourg for Finance hosted a seminar in Singapore for bankers and fund managers aimed at driving greater strategic cooperation with the country in the field of international finance. Titled “Luxembourg and Singapore, combining excellence in international finance”, the event was led by H.E. Pierre Gramegna, Minister of Finance for the Grand Duchy of Luxembourg, who spoke about how the unique strengths and similarities of the two countries can be leveraged to mutual benefit.
Mr. Gramegna was accompanied by a high-profile delegation that included Nicolas Mackel, CEO of Luxembourg for Finance. Numerous executives from Luxembourg’s financial sector also took part in the seminar, including: Yves Maas, Chairman, The Luxembourg Bankers’ association (ABBL) and Marc Saluzzi, Chairman, Association of the Luxembourg Fund Industry (ALFI).
“As smaller nations bordered by larger economic regions, Luxembourg and Singapore are two significant and absolutely complementary financial centres – but challenges and opportunities lie ahead as our unique financial ecosystems enter a period of transition,” said Mr. Gramegna. “In both private banking and asset management, Luxembourg has made it a specialty to provide customised solutions to sophisticated clients with multi-jurisdictional needs, while setting up legal frameworks that make us particularly attractive to investors and fund promoters. These factors allow us to act as a gateway into Europe – just as Singapore acts as a gateway to Asia for clients here. We therefore see a strong opportunity to share best practices in these areas and build on existing connections between our two countries.”
Singapore and Luxembourg finish fourth and 12th, respectively, in the latest Global Financial Centre Index of the most important financial centres in the world. The strength of existing links between the countries is illustrated by the fact that Singapore is one of the top markets for Luxembourg-domiciled investment funds; 1,678 out of 2,418 funds registered for distribution and 49 of the top 50 asset management groups distributing funds in Singapore are domiciled in Luxembourg.
“Luxembourg and Singapore already enjoy a productive and long-standing relationship, with many companies headquartered in Luxembourg using Singapore as their hub in Asia,” said Mr. Mackel. “There is potential to do more, though. As we embrace complete financial sector transparency, we foresee opportunities to collaborate on the promotion of global standards for the Exchange of Information. We also hope to drive increased cooperation in cross-border financial services, wealth and asset management – particularly as the Undertakings for Collective Investment in Transferable Securities (UCITS) begins to more significantly affect Asian investors.”
Recently, the Grand Duchy has been expanding its Asian footprint. Many Asian banks have already made Luxembourg their European hub, with RMB business in the country posting impressive growth in recent years. Luxembourg currently holds the largest pool of RMB deposits in Europe (over RMB 79.4 billion), while fund houses in Luxembourg manage RMB 256.4 billion of RMB assets.
Mr Gramegna said, “As we move forward, we are increasing our collaboration with Chinese counterparts regarding Luxembourg's role in the internationalisation of the Renminbi, which Singapore also plays a major part in. This is a tribute both to the success of our diversification strategy and expertise in this area, which we hope to share with our partners here.”
Earlier this week, Luxembourg’s Central Bank and PBoC announced the signing of a Memorandum of Understanding setting the framework for a future designation of a Renminbi clearing bank in Luxembourg. In addition, the Minister also announced the arrival of two new Chinese banks, China Merchants Bank and Agricultural Bank of China.
Furthermore, Alipay, one of the major online payment platforms in China, will establish its European entity in the Grand Duchy of Luxembourg.
The seminar served as a platform for sharing the latest information about Luxembourg’s position as a strategic partner for Singapore. Key discussion topics included:
- Similarities between Singapore and Luxembourg and areas for increased cooperation in cross-border financial services, wealth and asset management
- Updates on the development of the wealth management sector, including family offices, wealth structuring vehicles and other services for international private banking clients
- Transparency and the application of global standards on the Exchange of Information
- Latest trends and figures for the fund industry
- Added-value of UCITS for Asian asset managers
- Latest information about Luxembourg as European centre for regulated alternative investment funds and why the Alternative Investment Fund Managers Directive (AIFMD) is important for Asian managers
- Leading developments in international RMB business
- Insight in Luxembourg’s legal and regulatory framework, allowing for tailor-made investment funds and products
Mr. Gramegna also met with the Singapore Minister for Finance, Mr Tharman Shanmugaratnam, to discuss further cooperation between Singapore and Luxembourg.
To find out more about the work and initiatives of Luxembourg for Finance, visit www.luxembourgforfinance.com
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