Monday, October 7, 2013

ASIFMA: 17 - 24 Sep 2013 | Issue 172



17 - 24 Sep 2013 | Issue 172
Spotlight
Brokers and fund managers from Australia to the US could be ensnared by new electronic trading rules due to come into effect in Hong Kong next year. (Financial News)
GFMA and our nine global trade association partners will discuss the progress and developments in establishing a global system for legal-entity identifiers. The LEI Regulatory Oversight Committee has set forth key requirements for local operating units to participate in the global LEI system. In addition, other milestones have been reached, including steps toward the establishment of the Global LEI Foundation and calling for applicants for the board of directors. As regulators finalise reporting requirements worldwide requiring use of LEIs and as LOUs comply with rules, financial-market participants will be interested to hear about these important developments.

Update
CHINA
Central Bank Signs Memorandum of Cooperation with IFC on Joint Financing | (Chinese)
On the morning of September 17, 2013, Dr Zhou Xiaochuan, Governor of the People’s Bank of China (PBC), signed a memorandum of cooperation on joint financing in Beijing with President of World Bank Group Jim Yong Kim, in a move to further promote cooperation between China and IFC. (NAFMII Newsletter)
The report outlines the performance of the economy was stable in the first half of 2013, with structural adjustments and upgrades making new headway, with consumption growing steadily, and investment expanding rapidly.
Banks circle Shanghai zone
Dealmakers are closely watching the launch of the Shanghai Free Trade Zone next month for clues as to how China will open up the world’s second-largest economy to foreign banks and investors. Authorities are expected to introduce a 29-sq km trade zone around Shanghai’s international airport on October 1. (IFR)
China's financial reform gains steam
With a clearer outline and more concrete steps, China's financial reform is gaining traction amid calls to better facilitate the real economy and guard against risks. The city of Yiwu, best known for its wholesale market in east China's Zhejiang Province, has joined a list of Chinese cities to carry out special financial reform programs and target innovation in both the financial system and practices, hopefully to boost international trade in the area. (CCTV)
China’s first small-loan securitisation makes debut
The product released by Alibaba opens the way for small loan companies in China to raise funds directly from capital markets, providing more options than traditional methods. (Finance Asia)

CBRC set to regulate 'Chaotic' WMPs

Wealth management products should be put under better regulation to make them a regular item in banks' mixed portfolios as the industry moves forward with its market-oriented reform, the country's banking regulator said . Shang Fulin, chairman of the China Banking Regulatory Commission, encouraged banks to explore new services in wealth management services, while guarding against risks. (China Daily)
HONG KONG
Anti-Money Laundering Seminars 2013
The seminar will address international and regulatory developments in this area as well as measures to identify, assesses and combat tax crime related risks. The HKMA will present findings from recent on-site examinations of AIs’ anti-money laundering and counter-terrorist financing (“AML/CFT”) systems and controls, including those relating to laundering the proceeds of tax evasion.
SFC and European authorities sign MOU on supervision of alternative investment fund managers
SFC has entered into memoranda of understanding (MOU) with competent authorities of 28 European Union or European Economic Area countries concerning the consultation, cooperation and exchange of information related to the supervision of Alternative Investment Fund Managers Directive (AIFMD) entities.

SINGAPORE
Singapore and other APEC Economies Sign Statement to Advance the Asia Region Funds Passport
The Finance Ministers of Singapore, Australia, Korea and New Zealand today signed a Statement of Intent in Bali, Indonesia, to jointly develop the Asia Region Funds Passport (ARFP) that facilitates the cross-border offering of funds in Asia.

MAS consults on amendments to corporate governance regulations
MAS has launched a consultation proposing amendments to the corporate governance regulations. The consultation considers the developments in corporate governance requirements, as well as recent amendments to the Securities and Futures Act. The consultation paper sets out the proposed Securities and Futures (Corporate Governance of Approved Exchanges, Approved Clearing Houses, Licensed Trade Repositories and Approved Holding Companies) Regulations 2013.
Mr Leong Sing Chiong, Assistant Managing Director, Monetary Authority of Singapore addresses the prospects of further RMB developments and role in intermediating RMB flows between China and their trading partners.
Ravi Menon: Allianz and Singapore – growing a specialist insurance hub in Asia
Opening remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the launch of Allianz’ Regional Centre, Singapore, 18 September 2013.

INDIA
Raghuram Rajan, the new governor of the Reserve Bank of India, on Friday confounded market predictions and prompted dismay from domestic business groups by raising the central bank’s main interest rate in an attempt to combat stubbornly high inflation. (FT)

Banks begin to tap dollar loans under concessional swap programme
Banks have begun tapping a new concessional swap facility for overseas fundraising, one of a spate of measures the Reserve Bank of India (RBI) has taken to attract offshore funds to support the battered rupee. (Reuters)

RBI permits banks to open branches without its permission
Within days of new RBI Governor Raghuram Rajan making comments to this effect, the central bank today allowed lenders to open branches, including in big cities, without its permission provided they fulfil certain conditions. With the objective of further liberalising and rationalising the branch authorisation policy, the general permission to domestic scheduled commercial banks (other than RRBs) is now allowed to open branches in Tier 1 centres, the Reserve Bank said in a notification. (Economic Times)

New tax rules aim to rein in disputes on transfer pricing
The government introduced new tax rules on Wednesday aimed at reducing litigation with multinational firms over cross-border transactions the government considers tax avoidance schemes. The new "safe harbour" rules aim to clarify transfer pricing, over which disputes have surged under a government drive for revenue to narrow a yawning fiscal deficit and stave off a threatened ratings downgrade. (Reuters)

SEBI eases FII investment in debt
SEBI has allowed foreign institutional investors to get directly in the debt market, by doing way with the auction process. “FIIs/QFIs can now invest in government debt without purchasing debt limits till the overall investment reaches 90 per cent, after which the auction mechanism shall be initiated for allocation of the remaining limits, as currently in place for FII investments in corporate debt,” (Business Standard)

RBI hikes repo rate to 7.5%, reduces MSF rate to 9.5%
The Reserve Bank of India Governor Raghuram Rajan shocked investors by raising the key repo rate by a quarter point to fight inflation living up to the Chicago School's anti-inflation tradition, even as he partially rolled back some of the liquidity tightening measures to fight the currency slide. (Economic Times)

JAPAN
Abe picks corporate tax fight
The Japanese prime minister has not yet formally announced his decision to raise Japan’s national sales tax – that is expected to happen on October 1 – but he is already embroiled in a new and similarly contentious debate, this time over corporate income taxes. (FT)
Monetary Policy and Forward Guidance in Japan
Speeches at the International Monetary Fund (September 19) and the Board of Governors of the Federal Reserve System (September 20)
Haruhiko Kuroda: Overcoming deflation and quantitative and qualitative monetary easing
Speech by Mr Haruhiko Kuroda, Governor of the Bank of Japan, at the Kisaragi-kai Meeting,
Tokyo, 20 September 2013.

MALAYSIA
Zeti Akhtar Aziz: Strengthening Malaysia's financial system
Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the launch of the Finance Accreditation Agency, Kuala Lumpur, 6 September 2013.
THAILAND
The Government plans to seek at least 60 percent of the two-trillion-baht loans for infrastructure projects from domestic sources, while up to 40 percent of the loans will come from foreign sources.

INTERNATIONAL
Speaking after the Fed’s decision last week to maintain monthly asset purchases of $85bn, Mehmet Simsek, Turkey’s finance minister, highlighted the growing challenges facing developing countries, which have become reliant on extraordinary inflows of capital. (FT)

IOSCO discusses how to advance work on global regulatory reform
IOSCO members discussed how to progress with the work requested by the G20 on key issues for securities markets, including OTC derivatives, financial benchmarks, credit rating agencies and shadow banking. The Board agreed to begin work on a strategic plan for 2015-2020 that would define the outcomes IOSCO would seek to achieve by 2020 and lay down the roadmap for meeting those outcomes.
IOSCO reinforces standard on cross-border cooperation
IOSCO has adopted measures designed to encourage non-signatory members to sign the IOSCO Multilateral Memorandum of Understanding on cooperation and exchange of information (MoU). The MoU is an instrument used by securities regulators globally which establishes an international benchmark for cooperation and information sharing.
IOSCO and IFRS Foundation agree joint protocols to enhance consistency in global implementation of IFRS
IOSCO and the International Financial Reporting Standards (IFRS) Foundation have published a joint statement of protocols designed to deepen their cooperation in support of their commitment to global financial reporting standards.
APEC Finance Ministers welcome OECD report on disaster risk financing in the Asia Pacific region
To address growing concerns raised by APEC member economies’ high exposure to disasters, APEC Finance Ministers launched, last year, an initiative aimed at strengthening practices in disaster risk financing and supporting, within the region, the exchange of knowledge and practices on financial strategies to manage disaster risks.
Bank for International Settlement
UNITED STATES
US economy lacks momentum, says Fed official
The US economy does not have enough momentum to justify a slowing of Federal Reserve asset purchases, according to the most senior Fed policy maker to speak since the central bank surprised investors by deciding not to taper its bond buying last week. (FT)
Senior Fed official weighs October taper if economic data improve
Mr Bullard defended the Fed’s decision and said tapering could “certainly” start at the next meeting of the Federal Open Market Committee in late October, if the central bank sees a measurable improvement in the economic outlook, including stronger inflation and employment numbers. (FT)

CFTC Chairman and FCA Chief Executive discuss progress on international derivatives reforms
Gary Gensler, Chairman of the US Commodity Futures Commission (CFTC) gave a speech at the ISDA European conference in which he discussed the progress made on swaps market reform over the past five years. Mr. Gensler highlighted the progress made in relation to transparency, and noted that, starting from 2 October 2013, all market participants will have impartial access to swap execution facilities (SEFs) where they can leave live, executable bids or offers in an order book.
EUROPE
EU Commission proposes regulation on indices used as benchmarks in financial instruments and financial contracts
The proposed regulation is designed to enhance the robustness and reliability of benchmarks, facilitate the prevention and detection of their manipulation and clarify responsibility for and the supervision of benchmarks by the authorities.
EBA consults on draft XBRL taxonomy for secondary reporting
The EBA has launched a consultation on the draft XBRL Taxonomy for second level supervisory reporting. The consultation paper, which is based on the EBA's final draft Implementing Technical Standards and the related Data Point Model(s) (DPM), aims at ensuring that the data that national competent authorities collect from credit institutions and investment firms is transmitted to the EBA in a uniform and consistent manner.

ESMA publishes trends, risks and vulnerabilities report for second quarter of 2013
ESMA has published its trends, risks, vulnerabilities report for the second quarter of 2013. The report examines the performance of securities markets in the first half of 2013, assessing both trends and risks in order to develop a comprehensive picture of systemic and macro-prudential risks in the EU.
EU watchdog says new short-selling rules not harmful
Banning bets on falling share prices in the European Union has not damaged prices or ramped up volatility on stock markets, the bloc's securities regulator said on Friday, largely refuting market players' concerns. (Reuters)
Chancellor Angela Merkel's conservative party has won Germany's election, but finished just short of an absolute majority, official results show. (BBC)
UK government consults on country-by-country reporting requirements
The UK government has launched a consultation on country-by-country reporting under the Capital Requirements Directive (CRD 4). Under CRD 4, institutions are required to disclose their name, the nature of their activities and geographic location, number of employees, and their turnover on a country-by-country basis on 1 July 2014.


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