Asia Regulatory Review | 11 - 18 Mar 2014

11 - 18 March 2014 | Issue 195 Spotlight MAS: Singapore's Perspectives on RMB Internationalisation Welcome Address by Mr Leong Sing Chiong, Assistant Managing Director, Monetary Authority of Singapore, at the ASIFMA 4th Offshore Renminbi Markets Conference on 13 March 2014 Indian regulations limit offshore rupee bonds This is the first time an instrument has been denominated in rupees or linked to rupees that's also clearable by Euroclear. It helps investors who want the ease of a bond instrument that can be cleared and settled conveniently, said Vijay Chander, executive director of fixed income at ASIFMA. (IFLR) China's central bank holds bailout talks with property developer China's central bank and one of its largest state lenders are holding emergency talks over whether to bail out a defaulting real estate developer. The talks come barely a week after Premier Li Keqiang dubbed defaults "unavoidable", highlighting the tightrope officials tread between courting moral hazard and undermining the debt-laden financial sector. (FT) Update CHINA PBC Public Announcement Effective from 17 March 2014 onwards, the floating band of RMB against US dollar on the inter-bank spot foreign exchange market is enlarged from 1 percent to 2 percent, i.e., on every trading day on the inter-bank spot market, the trading prices of RMB against U.S. dollar will fluctuate within a band of 2 percent below and above the central parity as released by the China Foreign Exchange Trade System on that day. PBOC tightens screws on internet finance The People's Bank of China has issued two drafts for consultation aimed at cracking down further on internet finance by limiting online shopping and money transfers for online-payment service providers, according to mainland media reports. (SCMP) Private Banks in Pilot Will Have Four Models to Choose From The five planned privately owned banks will adopt one of four models, an official with the China Banking Regulatory Commission (CBRC) says. The regulator announced the names of the companies that can open the banks on March 11. Shang Fulin, chairman of the CBRC, said their opening date depends on whether the founders have met the regulator's standards. (Caixin) China Regulator Says Bond-Market Risks Controllable Risks on China's bond market are controllable overall, although the possibility of individual cases of default cannot be ruled out, Zhang Xiaojun, spokesman of the China Securities Regulatory Commission, said Friday. (WSJ) China easing financial leasing regulations China's financial leasing sector, which has seen rapid growth in recent years, is set to embrace fewer regulatory restrictions, according to new rules released by China's top banking regulator, in a fresh push for promoting market-oriented reforms in the financial arena. (Global Times) BOC rolls out first offshore renminbi index China's most internationalized bank, Bank of China (BOC) rolled out its first offshore renminbi index (ORI) on Tuesday, in a move to push globalization of the currency. The bank's ORI mainly tracks development of the yuan's deposit scale, operation, use of financial tools and other aspects with five indicators reflecting performance in the international financial market. (Xinhua) NAFMII announces the evaluation result of category B underwriting business (Chinese Only) NAFMII organized market participants, Bond Market Professional Committee and infrastructure institutions to evaluate the lead underwriters business of category B. The first batch of four local banks - Bank of Jiangsu, Bank of Tianjin, Huishang Bank and Beijing Rural Commercial Bank are qualified to conduct category B lead underwriting business. They are eligible to lead underwrite debt financing instruments of non-financial enterprises in the province (autonomous region or municipality directly under the central government) of registration. (NAFMII Newsletter) NAFMII releases the Guideline of centralized book-building (Chinese Only) With approval of People's Bank of China, NAFMII release the Guideline of centralized book-building of non-financial enterprises debt financing instruments. According to the guideline, lead underwriters of category B should use centralized book-building system to do underwriting business. Category A can make book-building themselves or through the centralized system. Beijing Financial Asset Exchange (CFAE) delegates the power from NAFMII to provide technical support of centralized book-building of debt financing instruments, and be responsible of disclosure and security management of information. (NAFMII Newsletter) China positive on investment treaty negotiations with U.S China said on Tuesday that it is positive on negotiations over an investment treaty with the United States and hopes for the two sides to work for an agreement at an early date. Spokesman for China's Ministry of Commerce Shen Danyang made the remarks at a press conference. (Xinhua) HONG KONG HKEx chief Charles Li Xiaojia urges reform as Alibaba opts for New York Stock exchange chief Charles Li Xiaojia says the city must be ready to reform its share-listing rules if it wants to stay a globally competitive financial centre, but it was right to stick to principles that saw it lose out yesterday to New York for the potential HK$100 billion listing of Alibaba. (SCMP) Hong Kong's market watchdog streamlines push for more oversight Hong Kong's market watchdog is boosting its corporate investigations staff by more than 10 per cent and bringing in litigators to speed up probes as it moves to improve its monitoring of company behaviour. (FT) SINGAPORE MAS to develop real time gross settlement system for yuan Singapore's bid to be a top yuan clearing hub received a boost on Thursday, after the central bank announced it will develop a real time gross settlement system for the Chinese currency.(Channel News Asia) Exchange CEOs say they are on high alert over cyber security Bocker said spending on cyber security is on the rise, but said exchanges need to do a better job of sharing information with each other on effective ways of combating cyber criminals. (Reuters INDIA Indian economy performs better than forecast before elections as production rises, inflation cools India's flagging economy delivered rare good news on Wednesday with a slight expansion of industrial production and further cooling in consumer prices, offering some respite to the ruling coalition before next month's general election. Improved consumer demand helped industrial output expand 0.1 percent on year in January, the first growth in four months, data from the federal statistics ministry showed on Wednesday. (Financial Express) JAPAN Japan's Central-Bank Chief Defends Consumption-Tax Rise Bank of Japan Gov. Haruhiko Kuroda said he was ready to carry out additional monetary-easing measures even before all data are available on the effects of a consumption-tax rise in April. (WSJ) AUSTRALIA RBA Saw More Signs Low Interest Rates Helping Spur Economy Australia's central bank said it saw more signs record-low interest rates were boosting growth, and reiterated a period of steady borrowing costs was likely. Timely indicators were consistent with some improvement in economic conditions over recent months, the Reserve Bank of Australia said in minutes released today of its March 4 meeting. (Bloomberg) SOUTH KOREA Incoming BOK Governor Sees Korea Rate Increase Looming Incoming Bank of Korea Governor Lee Ju Yeol said South Korean households need to prepare for higher interest rates, bolstering analysts forecasts for an increase as inflation picks up. "Even when the government asks the central bank to play a role in boosting the economy, the Bank of Korea should decide after considering price stability and all other aspects of the economy, such as financial stability, growth and employment," Lee wrote in a document in response to questions by opposition Democratic Party lawmaker Kim Hyun Mee. (Bloomberg) FSS to strengthen consumer protection in high-risk financial investment As part of an effort to strengthen financial consumer protection, the Financial Supervisory Service (FSS) has announced that the prevention of financial products mis-selling will be its top priority in 2014. A study of banks selling of financial investments showed that many investors chose investments with greater risk than they are willing to take. Accordingly, the FSS intends to improve the way high-risk investments are being promoted and effectively protect financial consumers by helping them choose investments appropriate for their risk tolerance level. Government to stimulate mergers and acquisitions The Ministry of Strategy and Finance (MOSF) has announced the measures that the Korean Government has decided to take to stimulate mergers and acquisitions (M&As). THAILAND Thailand Lifts State of Emergency Slightly Before Expiration The Thai government will lift the state of emergency it imposed in late January for Bangkok and some adjacent areas, replacing it with the less-severe internal-security law. (WSJ) MALAYSIA Hong Kong the top FDI source for Malaysia Hong Kong was Malaysia's top source of foreign direct investment (FDI) in the final quarter of 2013, compared with ninth spot the year before. In 2013, Hong Kong-Malaysian trade total trade rose 1.7% to US$14.65bil, of which, US$4.9bil accounted for FDI outflow from Malaysia into Hong Kong in the last quarter. This was conveyed at a press conference by the Hong Kong Trade Development Council deputy executive director Margaret Fong, who urged Malaysian small-medium enterprises to bring their businesses into Hong Kong. (The Star) INDONESIA Indonesia steps up single market preparation Government will be forming a national committee to ensure that Indonesian products can compete with those from other ASEAN countries after the launch of the ASEAN economic community (AEC) at the end of 2015. (Jakarta Post) BI keeps key rate same amid signs of economic recovery Bank Indonesia (BI) kept its key interest rate unchanged for a fourth consecutive month, as a stabilize rupiah and declining inflation allowed the central bank to prolong the pause in monetary tightening. BI's six-man board of governors led by Agus Martowardojo kept its interest rate at 7.5 percent, a four-year high that has been kept the same since November, as the economy is "running on the right track". (Jakarta Post) VIETNAM Vietnam cuts rates as it seeks to spur growth The State Bank of Vietnam cut the refinancing rate charged on loans to commercial banks to 6.5% from 7%. (Channel News Asia) INTERNATIONAL Global regulators to intensify efforts to revive securitisation Global regulators will intensify their efforts to revive a securitisation market tarnished by the financial crisis and now seen by policymakers as a key source of funds for the economy. (Reuters) EU, US Say Progress Made In Transatlantic Trade Deal The European Union and the Unites States concluded a fourth round of talks Friday aimed at eliminating tariffs on all goods between the two economies in an attempt to cut costs for businesses and boost growth on both sides of the Atlantic. (MNI News) UNITED STATES Fed likely to adapt forward guidance at policy meeting At the meeting, to be followed by a press conference, the Fed is likely to adapt its "forward guidance" on future interest rates, and explain more about how it will behave once unemployment falls below its threshold of 6.5 per cent - the level above which it says it will not raise interest rates. (FT) US SEC proposes new rules to safeguard clearing agencies U.S. regulators proposed long-awaited rules on Wednesday designed to safeguard the country's largest clearing agencies from collapsing and spreading systemic market risks. (Reuters) EUROPE Draghi Says ECB Forward Guidance May Help to Curb Euro European Central Bank President Mario Draghi said his forward guidance may help to weaken the euro and lower real interest rates, easing the risk that inflation won't return to the goal set by policy makers. (Bloomberg) ECB to take tough stance in bank health check The European Central Bank (ECB) will press banks to revalue their assets and take a more realistic view on likely losses when it probes their balance sheets in coming months, signalling a new, more aggressive era of banking supervision in the bloc. (Reuters) France and Germany squabble over who pays for EU banking union France and Germany are squabbling over who should foot the bill for Europe's banking union, with Paris fearing its banks will pay the biggest share towards a 55bn Euro rescue fund. (FT) Carney Will Spell Out Strategy as He Pushes BOE Revamp Mark Carney will unveil the results of his McKinsey & Co. review of the Bank of England tomorrow, using a platform that's previously seen his predecessors and U.K. chancellors set out their visions. (Bloomberg) BoE starts review of clearing houses The Bank of England has begun a review of how clearing houses test their resilience to market shocks in an effort to ensure that some of the world's largest clearing houses pass tough new European industry standards. (FT) Features ASIFMA Homepage ASIFMA Careers ASIFMA Events Data Asia Credit: Fed Tapering Will Lead to Greater Credit Differentiation in Asia Assessing Set-off Risk for Australian Securitisation and Covered Bond Transactions Australian Prime RMBS Arrears Banking System Outlook: Mongolia Banking System Outlook: Pakistan China Bond Market Credit Analysis on Australia's state of Tasmania APAC Basel III Issuance at the Forefront Fitch Rates Mizuho's Tier 2 Notes; First Basel III Issue by Japanese Bank Localised Policies to Help China Reach Housing Equilibrium Fitch Rates Wynn Macau's USD750m Sr Notes Add-On Issuance 'BB' Fitch Rates NAB's First Domestic Covered Bond 'AAA'/Stable No Rating Impact on Yuanta Group from Acquisition, JV Can China Come To Grips With Soaring Public Debts And Moral Hazard In The Financial System? Cracks in the Fortress? Challenges Rise Within China's Financial Sector The Growing Pressure For China To Shine More Light On Financial Risks First Onshore Default Is Landmark Event For China's Bond Market Hong Kong's Resolution For Distressed Financial Institutions Will Boost Government's Ability To Manage Financial Crises Thailand's Rice Support Scheme Highlights Policy Risk But Won't Hurt The Sovereign Rating FATCA IGA Status Contacts Eric Tang    Publications GFMA Daily Smartbrief GFMA Weekly Update ARR Archive Subscriber Tools Lead Editor: Eric Tang                                                                          subscribe     share     SEND FEEDBACK Change e-mail address  |  Unsubscribe In accordance with our Privacy Policy, we occasionally distribute information and announcements that are relevant to the development of capital markets in Asia to our ASIFMA Regulatory Review distribution list.