Written reply to PQ on Developments Towards Singapore’s Digital Warehouse Receipt Systems and Metal Warrant Financing Framework

Question:

Mr Kenneth Tiong Boon Kiat: To ask the Deputy Prime Minister and Minister for Trade and Industry (a) why digital Singapore-based warehouse receipts remain underutilised for financing critical minerals despite the 2021 Electronic Transactions Act (ETA) amendments; (b) whether the Ministry will operationalise section 16Q of the ETA to accredit trusted issuers; and (c) how does Singapore's framework for metal warrant financing compare to systems already operational in Dubai and the UK.

Written Answer by Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong

1.      Most critical minerals traded by Singapore-based companies are stored and financed through the London Metal Exchange (LME) ecosystem, including LME-approved warehouses in Singapore and overseas. Banks which are LME members recognise and accept LME’s digital warehouse receipts as collateral in trade financing.  

2.      We understand that some companies may store metals in non-LME warehouses in Singapore, due to lower storage costs or to hold the metals for end-use rather than trading. These warehouses typically issue physical receipts, as they and the banks do not have the economies of scale and hence, the commercial incentive to adopt separate local digital receipt platforms.  

3.      Metal warrant financing in Dubai and the UK similarly relies on internationally recognised exchange-based systems such as the LME. EnterpriseSG engages the industry regularly and will review the need to accredit trusted issuers if and when there is sufficient market interest.