Singapore currently offers the most favorable conditions for the development of securitization in the Asia-Pacific region. The country has a highly regarded judicial process and a transparent legal system; a well-regulated banking system; and a long history of consumer lending, which includes auto loans, credit cards, and housing loans.
A key factor pushing securitization to the forefront in Singapore is the government's wish to develop a healthy secondary local debt market. New regulations, promulgated in September 1999, permit individuals to invest their pension funds in bonds with a minimum rating of single-A. These regulations governing eligible investments for the Central Provident Fund (CPF), Singapore's pension system, could further increase interest in rated securitized bonds. The regulations increase the universe of eligible investments for CPF contributors and create a new class of investors with a natural appetite for Singapore dollar-denominated investments.