30 Sep - 08 Oct 2013 | Issue 174
Spotlight
Asian markets largely were under regulated before the global financial crisis, ASIFMA CEO Mark Austen says, but the pendulum has swung toward excessive regulation. (BBC)
China’s environment may pose additional challenges for a bond contract because government bonds are not investments well understood by retail investors - in good part, no doubt, because they can’t trade the cash product.
ISDA hosts two Hong Kong Conferences:
Update
CHINA
China called on the U.S. to take necessary steps to avoid defaulting on government debt, in the first official comment on the shutdown impasse from Washington's largest foreign creditor. Noting that China is a major holder of U.S. Treasurys, Chinese Vice Finance Minister Zhu Guangyao warned that failure by the U.S. to raise its debt ceiling would have global ramifications. (WSJ)
PBOC To Continue 'Prudent' Monetary Policy, Fine-Tuning if Needed
China's central bank said Sunday that it will continue with a "prudent" monetary policy as the domestic economic situations are largely stable but will take fine-turning measures if necessary. In a statement released after the third-quarter meeting of its monetary policy committee, the People's Bank of China reiterated its policy objectives, saying that it will push forward with interest rate liberalization and keep the yuan exchange rate at overall steady levels. (WSJ)
"The Asia-Pacific has long been an important engine of world economic growth. To push forward a recovery at a time of a sluggish global economy, economies in the Asia-Pacific should have the courage to do what has never been done before." Chinese president Xi said. (China Daily)
The Asia-Pacific Economic Cooperation mechanism should lead and coordinate the negotiations over free trade areas in the region, President Xi Jinping said, as several FTAs are competing for dominance. (China Daily)
ADB further trims growth forecast for China
The Asian Development Bank (ADB) downscaled this year's growth forecast for China to 7.6 percent due to weak domestic demand. (Xinhua)
In a closed-door meeting Sunday, Mr. Xi told a Taiwanese presidential envoy, Vincent Siew, that China "is ready to conduct equal consultations with Taiwan on cross-Strait political issues," according to a summary of the comments from China's official Xinhua News Agency. (WSJ)
China elevates Malaysia ties, aims to triple trade by 2017
China and Malaysia agreed on Friday to elevate bilateral ties to a "comprehensive strategic partnership", aiming to boost military cooperation and nearly triple two-way trade to $160 billion by 2017. (Reuters)
Regulators in Britain and China can help more Chinese banks open branches in the United Kingdom, City of London Lord Mayor Roger Gifford said. "We would like the regulators to be comfortable with each other so that we can have branches here as well as subsidiaries, because we would like to see more banks opening here," Gifford told. (China Daily)
HONG KONG
Hong Kong Exchanges and Clearing Limited (HKEx) rolled out the first phase of its Orion Market Data Platform (OMD), one of the HKEx Orion technology initiatives, today (Monday) with the introduction of the new system in its securities market.
The Securities and Futures Commission updates FAQs on post authorisation compliance issues of SFC-authorised unit trusts and mutual funds
The SFC has updated its set of frequently asked questions (FAQs) on the post authorisation compliance issues of SFC-authorised unit trusts and mutual funds by adding a new Question 15. The new question relates to requirements applicable to a partial re-allocation of the Renminbi Qualified Foreign Institutional Investor (RQFII) quota from an existing SFC-authorised RQFII fund for other uses.
SINGAPORE
The Monetary Authority of Singapore (MAS), the Securities Commission of Malaysia, and Securities and Exchange Commission of Thailand signed an agreement today to facilitate the cross-border offering of collective investment schemes to retail investors in the three countries. The signatories expect to implement the framework in the first half of 2014.
Singapore targets golden trading future
Not content with its efforts to become Asia’s regional hub for the trading of commodities such as coal, iron ore and crude oil, Singapore now has a shiny new cluster in its sights: gold. (FT)
Singapore & Malaysia should look for more cross-border opportunities to collaborate on Islamic financing according to speakers at the inaugural Islamic Finance Services Conference on Tuesday. Experts said Singapore should also widen its breadth of Islamic finance products to cover the areas of retail, real estate and equities, in order to spur growth in this area. (Channel News Asia)
Companies in Southeast Asia are looking at Singapore as a viable alternative for high-yield bond issues in amounts that would be too small for dollar investors.The push comes as so-called junk bonds became a predominant theme this year in the Singapore market, with a record number of small-cap and sub-investment grade companies selling debt in the Lion City, attracting investor interest by offering juicy coupons. (Reuters)
Consultation Paper on Proposed Amendments to MAS Notice 637 on Disclosure and Submission Requirements for Assessing Global Systemically Important Banks and Point of Non-Viability Requirements
MAS is seeking public feedback on Proposed Amendments to MAS Notice 637. MAS invites interested parties to comment on the paper by 4 November 2013.
INDIA
"There is a need to review the Free Trade Agreements with other nations as a measure to assess their impact on our own country's trade. The basic objective would be to analyse if there are any hurdles faced by the exporters and determine the inputs required to further the growth of trade," Minister of State for Commerce and Industry D Purandeswari said. (Economic Times)
India's State-Run Banks to Get Funds to Expand Lending
India's government said Thursday it would provide additional funds to state-run banks so that they would offer cheaper loans to buy two-wheeled vehicles and other consumer durables, a move aimed at stimulating demand in an economy hurt by slowing growth and high interest rates. (WSJ)
Condition free foreign listing to help companies raise funds, finance government’s current account deficit
"It has now been decided with the approval of the Union finance minister that unlisted companies may be allowed to raise capital abroad without the requirement of prior or subsequent listing in India," the finance ministry said in a statement on Friday. (Economic Times)
Foreign institutional investors (FIIs) infused Rs 13,000 crore in the Indian stock market during September 2013
FIIs have invested Rs 13,000 crore in the Indian stock market during September 2013, after the announcement of new measures to boost the economic growth by Mr Raghuram Rajan, Governor, Reserve Bank of India. Moreover, the US Federal Reserve’s decisions to leave its stimulus programme unchanged also encouraged foreign investors to park funds in Indian equities. (IBEF)
The Reserve Bank is likely to complete initial scrutiny of 26 applications for new bank licences in a month, a senior RBI official said. Thereafter, the shortlisted names will be forwarded to the Bimal Jalan panel for further action. (Economic Times)
With an aim to make Indian capital markets an easier and attractive investment destination for overseas investors, Sebi has finalised detailed regulations for 'foreign portfolio investors' (FPIs). The new norms provide an operational framework for FPIs, a new class of overseas investors that club all existing class of investors like Foreign Institutional Investors (FIIs) and Qualified Foreign Investors (QFIs). (Business Standard)
The Asian Development Bank (ADB) has approved $700 million in loans to support the Indian government's efforts to accelerate investment in infrastructure which the country requires to ensure strong economic growth. (Business Standard)
To keep a tab on possible unfair practices, the Competition Commission of India has begun a study of the functional aspects of the country’s growing financial sector, including banking and insurance segments. (Hindu Businessline)
Inaugural address by Mr H R Khan, Deputy Governor of the Reserve Bank of India on “Adoption of ISO 20O22 in RTGS” on 30 September 2013.
Inaugural address by Mr B Mahapatra, Executive Director of the Reserve Bank of India on “Implications of new bank licenses”, at the National Institute of Bank Management on 28 September 2013.
JAPAN
Speech by Takahide Kiuchi, Member of the Policy Board, at a Meeting with Business Leaders in Kushiro on Sept. 19, 2013.
The Bank of Japan Governor Urges U.S. to Resolve Deadlock
The Bank of Japan on Friday left its monetary policy unchanged citing a continuing economic recovery, but uncertainty looms ahead over global growth and the impact of a sales tax hike next April. The absence of fresh action from the BOJ's policy board was widely expected. (WSJ)
The Bank of Japan Refrains From More Stimulus as Business Confidence Up
The Bank of Japan refrained from adding to unprecedented monetary stimulus after business confidence surged and Prime Minister Shinzo Abe decided the economy was strong enough to weather a sales-tax increase. Governor Haruhiko Kuroda’s board retained a goal of expanding the monetary base by 60 trillion to 70 trillion yen ($720 billion) a year, the central bank said in Tokyo today. (Bloomberg)
BoJ lifts assessment of Japan’s economic health
Haruhiko Kuroda, governor of the Bank of Japan, has thrown his weight behind plans to raise consumption taxes, saying he does not think the fiscal squeeze will “break” the world’s third-largest economy. After a two-day policy meeting on Thursday the BoJ said that Japan’s economy is “recovering moderately”, boosted by a pick-up in exports and in companies’ investment in fixed assets. (FT)
AUSTRALIA
ASIC releases further guidance on hedge fund disclosure ASIC has today refined the definition of a hedge fund to ensure our disclosure requirements are appropriately targeted at those funds that pose more complex risks to investors.
SOUTH KOREA
Deputy Prime Minister Hyun Oh-Seok presided over the 22nd Ministerial Meeting on the Economy on October 8 and led discussions on follow-up measures for the 3rd Round of Measures to Boost Investment, the current status of major economic legislation in the National Assembly, and trends and implications of the Shanghai Free Economic Zone.
After a monthly rate-setting meeting on Thursday, the Bank of Korea (BOK) could cut next year's growth prospect for South Korea to between 3.8 percent and 3.9 percent, citing a possible move by the International Monetary Fund (IMF) to slash its growth forecast for the world economy in 2014, they said. (Global Post)
MALAYSIA
Dato’ Tajuddin Atan, Chief Executive Officer of Bursa Malaysia Berhad and the Chairman of Bursa Malaysia Derivatives said, “The launch of the new Bursa Gold Futures Contract underscores the commitment of Bursa Malaysia to continuously introduce new products and asset classes, thereby bringing more trading and investment opportunities to more Malaysians.”
Bursa Malaysia launched the 2nd edition of the Corporate Governance Guide to reflect the principles and recommendations of the Malaysian Code on Corporate Governance (MCCG) 2012 and changes in the Listing Requirements of Bursa Malaysia Berhad.
THAILAND
Address by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the Fitch Ratings 100th Anniversary Conference, Bangkok, 27 September 2013.
It is crucial for Thailand to restructure tax revenue to rely less on income tax and more on consumer, wealth and asset taxes over the next five years to prepare itself for the ageing society. Without a structural change in the system, tax revenue could shrink as Thailand will soon become an ageing society,
INTERNATIONAL
IMF Chief Warns U.S. Risks 'Seriously Damaging' Global Economy
The U.S. risks "seriously damaging" the global economy if lawmakers fail to raise the government's borrowing limit in the coming weeks, the head of the International Monetary Fund, Christine Lagarde, warned Thursday. (WSJ)
Global economy in ‘epic scale’ change, says IMF’s Lagarde
The global economy is experiencing “transitions on an epic scale”, the International Monetary Fund managing director said on Thursday, warning that turbulence in emerging markets could knock 0.5 to 1 percentage point off their growth. (FT)
Don't play with fire on U.S. debt, say policymakers worldwide
Top officials of U.S. and international financial institutions ramped up warnings on Thursday that failure to raise the U.S. debt ceiling to prevent the world's largest economy from defaulting would deal a serious blow worldwide.(Reuters)
IOSCO included Principles 6 and 7 in the IOSCO Principles in 2010 as part of its response to the global financial crisis. Principle 6 requires regulators to have or contribute to a process to monitor, mitigate and manage systemic risk, appropriate to their mandate. Principle 7 requires regulators to have or contribute to a process to review the perimeter of regulation regularly.
Bank for International Settlement
UNITED STATES
U.S. to Default If Debt Ceiling Not Raised, Lew Says
Treasury Secretary Jacob J. Lew said Congress needs to pass a debt-ceiling increase by Oct. 17 or the U.S. will be “dangerously low” on cash and risk defaulting on its payments. “On the 17th, we run out of our ability to borrow, and Congress is playing with fire,” Lew said on CNN’s “State of the Union” today. “If they don’t extend the debt limit, we have a very, very short window of time before those scenarios start to be played out.” (Bloomberg)
US banks fearing default stock up on cash
US banks were stocking cash machines with extra funds, investors dumping Treasury bills and US equity indices sinking on Thursday in a sign of mounting unease that Washington risks defaulting on its debt later this month. (FT)
EUROPE
ECB clashes with national supervisors over bank review
The European Central Bank plans to review banks' balance sheets, putting it at odds with national regulators. The goal is to ensure ECB knowledge of what's on banks' books, but national supervisors are concerned about possible surprises. (Economist)
ESM debut may struggle to repeat history
The eurozone will take an important step towards building a permanent firewall against future sovereign bailouts next week when the European Stability Mechanism (ESM) debuts in bond markets, but the deal may struggle to live up to its predecessor’s inaugural trade. (IFR)
ESMA publishes official translations of guidelines and recommendations regarding written agreements between members of CCP colleges
ESMA has published the official translations of its guidelines and recommendations regarding written agreements between members of colleges for central counterparties (CCPs) as envisaged in the opinion issued by ESMA on 14 March 2013 on draft regulatory technical standards (RTS) on CCPs and as envisaged in Recital 5 of those draft RTS.
ESMA publishes second set of technical advice on equivalence of regulatory regimes
ESMA) has published its second set of technical advice to the EU Commission on the equivalence of the regulatory regimes for OTC derivatives clearing, central counterparties (CCPs), and trade repositories (TR) of non-EU countries with the European Markets Infrastructure Regulation (EMIR).
EBA publishes 2014 work programme
EBA has published its work programme for 2014, which describes and summarises its main objectives and deliverables in the forthcoming year. The EBA's regulatory work will focus in particular on credit and market risk, the prudential areas of liquidity and leverage, as well as on recovery and resolution in 2014.
ESA Joint Committee publishes work programme for 2014
The Joint Committee of the European Supervisory Authorities (ESAs) has published its work programme for 2014. The Joint Committee intends to give high priority to the areas of consumer protection and cross-sectoral risk analysis. The Joint Committee also intends to bring forward its regulatory work in key areas such as financial conglomerates, anti-money laundering, benchmark setting processes and credit rating agencies.
EU Swaps Platforms in Limbo as CFTC Closed on Deadline Day
European Union attempts to win exemptions from U.S. rules for swaps trading platforms that take effect today have been hampered by the partial shutdown of the American government. Michel Barnier, the EU’s financial services chief, was unable to broker a deal with the U.S. Commodity Futures Trading Commission ahead of a budget standoff that’s left many government offices shuttered. (Business Week) Germany’s Merkel Is Key to Currency-Trading Levy German Chancellor Angela Merkel’s choice of coalition partner will play a key role in deciding how far the foreign-exchange market is burdened by a proposed financial-transactions tax in 11 European Union states. (Bloomberg) |
Wednesday, October 16, 2013
ASIFMA - 30 Sep - 08 Oct 2013 | Issue 174
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