One, we will broaden the scope of eligible investments to include blended finance structures in which financial institutions in Singapore have been substantially involved. Two, we will give more recognition to concessional capital invested in such blended finance structures. Concessional capital is capital that accepts lower returns or higher risks, compared to other investors, and can help catalyse commercial capital into worthwhile but less attractive green and transition projects. The ability to crowd in capital from other investors is why we want to encourage and give extra recognition to concessional capital. Hence, for every dollar of concessional capital invested, we will recognise it as equivalent to up to $ of investments for the purpose of assessing if the SFO has met its investment requirement. Three, we will recognise grants that SFOs give to support such blended finance structures. Grants have no expectation of income or return of principal. Given its deeply concessional nature, we will recognise as $ for every dollar of grant given to blended finance structures. Second, we will encourage SFOs to invest in climate-related projects. For the purpose of assessing if the SFO has met its investment requirement, we will recognise its climate-related investments – anywhere in the world, and not limited to Singapore. 12/16  BIS - Central bankers' speeches  Climate change is a global problem that is not bounded by national borders. As a low-lying island state, Singapore is particularly vulnerable to climate change. We should thus recognise all efforts made to address climate change issues.

In March this year, we issued a circular, telling financial institutions to be alert to additional money laundering/terrorism financing risks when dealing with legal persons and arrangements which are used for wealth management purposes, including family offices. Family offices in Singapore are already substantially covered for money laundering risks. Multi Family Offices, which manage third-party funds and are licensed by MAS, are already subject to the same anti-money laundering controls that we apply on all regulated financial institutions. Likewise, the majority of SFOs in Singapore – which are granted tax incentives by MAS – are required to have an account with a bank in Singapore, and are thus subject to the anti-money laundering controls applied by our banks. The remaining SFOs are likely to have engaged the services of other financial institutions or professional services entities such as lawyers or corporate service providers in Singapore who are similarly required to apply suitable anti-money laundering measures on their clients. MAS will take additional measures to strengthen surveillance and defence against money laundering risks in the SFO sector. Specifically, we will require all SFOs to: notify MAS when they commence operations and also annually; and maintain a business relationship with an MAS-regulated financial institution that would perform anti-money laundering checks on these SFOs. MAS will soon release a public consultation paper on these proposals. Even as we manage the risks posed by wealth inflows, it is important that the management of this wealth benefits Singapore and serves a larger purpose.