Singapore ILS grant scheme
A Monetary Authority of Singapore scheme that, since 2018, covers the issuance costs of catastrophe bonds domiciled in the city-state.
A catastrophe bond is expensive to put together before it raises a single dollar: legal counsel, modeling, rating, structuring and a dedicated vehicle. For a first-time issuer these fixed costs weigh heavily, and they mainly hold back midsize Asian cedents. The Monetary Authority of Singapore decided to remove the obstacle by reimbursing these upfront costs for issues domiciled there, for any risk and not only natural catastrophes. The problem targeted is competition between financial centers: Bermuda held most vehicles, and a domicile is won through the first issue more than through the rulebook. Hong Kong answered in 2021 with its own regime and its own grant.
Announced in November 2017 by the authority's chairman, Lim Hng Kiang, the scheme took effect on January 1, 2018 and covered 100% of the upfront costs of issuing a catastrophe bond domiciled in Singapore.
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