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Industry roundup: 13 September

In its comments last month to the Financial Stability Board’s (FSB) Consultation Report on Policy Proposals to Enhance Money Market Fund Resilience, ICD shared trading data from its platform to show the relative strength of money market funds (MMFs) with stable net asset values (NAV). 

Among the MMF proposals under consideration for further regulation is the elimination of stable NAV funds, also known as low volatility (LV) NAV funds, the assets of which are valued at amortised cost. But trading data on ICD Portal shows that during March 2020, when the impact of the global pandemic caused a rush to liquidity, LVNAV funds in Europe were more resilient than prime funds in the US, with outflows at 11% and 30%, respectively. 

ICD explained: "Amending MMF regulation to eliminate stable NAV funds could have the unintended consequences, as we’ve seen in the US, of small losses due to temporary dislocation in mark-to-market valuation for investments designed to be held to maturity. It will potentially cause additional investor outflows, above and beyond what ordinarily would be expected with a stable NAV product that values itself at amortised cost. In addition, the unintended result of the proposal to switch from LVNAV to VNAV will result in significantly less utilisation of the funds as we saw following the imposition of a floating NAV in the US in October 2016."

In June, ICD also sent comments opposing the elimination of stable NAV to the European Securities and Markets Authority (ESMA) in response to its Consultation Paper on the EU Money Market Fund Regulation - legislative review.

 

Citi, HSBC, and StanChart among 15 finalists for MAS Global CBDC Challenge 

The Monetary Authority of Singapore (MAS) has announced the 15 finalists for the global competition to develop retail central bank digital currency (CBDC) solutions (Global CBDC Challenge). The finalists, comprising financial institutions, fintechs and technology solution providers, will progress to the Acceleration Phase of the Global CBDC Challenge, before they pitch their solutions to a panel of judges and an international audience at this year’s Singapore FinTech Festival.

The Global CBDC Challenge attracted over 300 submissions from more than 50 countries, with more than half of the submissions coming from Asia. Participants were invited to address 12 problem statements relating to: (i) CBDC instrument; (ii) CBDC distribution; and (iii) CBDC infrastructure; covering topics such as inclusivity, interoperability and programmability. The proposals from the finalists sought to address multiple problem statements through a variety of technology approaches including hardware wallets, digital identity and asset tokenisation solutions. 

The finalists were selected by an independent panel of judges comprising policy and technical experts, academia and senior representatives from some of the intergovernmental organisation partners. The finalists shortlisted are: ANZ Banking Group; Bitt; Citibank Singapore Branch; cLabs; Consensys; Criteo; Extolabs; Giesecke+Devrient advance52; HSBC Bank (Singapore) Limited and HSBC Holdings; IBM; IDEMIA; IOG Singapore; Soramitsu; Standard Chartered Bank; and Xfers.

The finalists will next go through an eight-week Acceleration Phase, supported by Tribe Accelerator, where they will develop and refine their solutions. Finalists will participate in masterclasses, to be held weekly over the eight-week Acceleration Phase, which will cover topics crucial to the development of a robust retail CBDC, allowing finalists to tap onto fresh perspectives and insights to enrich their final solutions. They will also have networking sessions with industry experts and be given access to the API Exchange (APIX) Digital Currency Sandbox for rapid prototyping of their digital currency solutions. 

During the Global CBDC Challenge’s Demo Day as part of the Singapore FinTech Festival 2021, the finalists will present their innovations and the top three will win S$50,000 in prize money each. All 15 finalists will be fast-tracked in their applications for grant funding of up to S$200,000, under the MAS Financial Sector Technology and Innovation (FSTI) Proof-of-Concept Scheme. The solutions of the finalists as well as key insights from the other submissions will be featured in a post-event report.

 

Sensibill and FreeAgent to offer digital receipt and expense management solutions 

Sensibill, a customer data platform that enriches SKU-level data specifically for the financial services industry, and FreeAgent, provider of cloud accounting software for small businesses and accountants, have announced a partnership supporting more than 110,000 business customers to better manage their business expenses. The two companies say they will help small businesses and accountants automate and organise their finances, accounting, and taxes.

Leveraging Sensibill’s technology within the FreeAgent solution in a new feature called Auto Extract, small businesses can capture, organise, and categorise their receipts, attaching them to corresponding bank transactions. This ultimately makes receipts easier to find and reference. By extracting data from receipts, Sensibill and FreeAgent are reducing errors from manual entries, providing greater visibility and accuracy behind purchases while helping alleviate the stress of tax season.

"Automation is at the centre of our business, which is why partnering with Sensibill was a natural choice," said Roan Lavery, CEO and co-founder of FreeAgent. "Through this partnership - which powers our new Auto Extract feature - we aim to increase customer satisfaction and engagement, while making the lives of our small business customers and accountant partners much easier. It’s great to be working alongside Sensibill to help businesses get back to pursuing their passions - without all of the administrative hassles."

"By joining forces with FreeAgent, we’re eliminating the time and money businesses have traditionally spent manually entering data into clunky and cumbersome spreadsheets and systems," added Danny Piangerelli, chief technology officer of Sensibill. "Instead, we’re delivering item-level details that enable faster, better expense management. Our combined technologies make it possible for these businesses and accountants to take care of their business, anywhere and anytime. Together, we are arming small businesses with the right tools to run their businesses with more efficiency, speed, and accuracy – something that has never been more important than in the current climate."

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