Asia Regulatory Review | 22 - 29 April 2014

22 - 29 April 2014 | Issue 201 Spotlight Brokers prepare for trading windfall "This is obviously a big deal, and I might even say a big-big deal. It cements Hong Kong's position as a stable gateway to China, and, also brokers and exchanges in both cities, in theory, will be getting more volumes. Certain key details about how the scheme will be implemented have not been disclosed yet, such as how quotas will be applied and how currencies will be converted." said Nick Ronalds at ASIFMA. (IFR Asia) ASIFMA Asia Credit Report: Q1 2014 ASIFMA is pleased to share our Asia Credit Report for Q1 2014. International Monetary Fund urges structural reform of Asian economies Asian policymakers must push ahead with structural changes to ensure the region continues to lead global growth and withstand volatility as the US reduces monetary stimulus, the IMF said. Asian economies will face higher interest rates and bouts of volatility in capital flows and asset prices as global liquidity tightens amid a recovery in advanced nations, the Washington-based lender said in its Regional Economic Outlook for Asia and Pacific. (SCMP) Update CHINA China must move cautiously in cutting leverage ratio: PBOC official China must act cautiously in cutting leverage ratios in the corporate and government sectors, as any abrupt move could deal a blow to an economy that is already slowing, a senior central bank official said in remarks published on Monday. Xu Nuojin, a deputy director of the statistics department of the People's Bank of China, said the slowing economy could expose the property sector and local government financing vehicles to high risks, potentially becoming the biggest concern for world's second-largest economy. (Reuters) Six Chinese Banks Allowed to Use New Capital Rules China's banking regulator is letting six big banks use their own models for calculating their capital ratios, giving them greater flexibility in risk evaluation and the use of their assets. (WSJ) China securities regulator encourages small firms to list in Shanghai The mainland's securities regulator has tipped the balance in favour of the Shanghai Stock Exchange as the mainland's premier financial bourse, encouraging small firms to list shares on it in a move reinforcing the city's efforts to transform itself into a global financial centre. (SCMP) Shenzhen Stock Exchange updates trading rules for QFIIs and RQFIIs (Chinese Only) The Shenzhen Stock Exchange (SZSE) has issued the 'Implementing Rules on Securities Trading of Qualified Foreign Institutional Investors and Renminbi Qualified Foreign Institutional Investors on the Shenzhen Stock Exchange'. The rules, which became effective immediately, supersede all the previous trading rules applicable to Qualified Foreign Institutional Investors (QFIIs) issued by SZSE and apply to the Renminbi Qualified Foreign Institutional Investors (RQFIIs). Conditions exist for yuan's two-way fluctuation: official Conditions for the two-way fluctuation of the Chinese currency's exchange rate are already in place and there is no need to overreact to the yuan's depreciation since mid February, an official said on Thursday. "It is a normal phenomena for a currency's exchange rate to either rise or fall and we should pay more attention to the medium and long-term trend of the yuan," said Guan Tao, head of the balance of payment department under the State Administration of Foreign Exchange. (Xinhua) China to play big role in new regional lender China's planned US$50 billion Asian Infrastructure Investment Bank (AIIB) will help Beijing strengthen its leadership in regional issues, observers say. It is the second multilateral lender on the drawing board in which China will play a major role, after the BRICS Development Bank that Brazil, Russia, India, China and South Africa have proposed setting up to fund their economic development. (SCMP) China's growth forecast revised up The International Monetary Fund yesterday revised its forecast of China's economic growth to 7.5 percent for this year and 7.3 percent in 2015 but it warned the slowdown in the country's economy was "sharper than envisaged" despite the upward adjustment. (Shanghai Daily) HONG KONG Order on tax information exchange agreement with the US gazetted An order made by the Chief Executive in Council under the Inland Revenue Ordinance was gazetted today (April 25). The order implements the agreement with the United States of America (US) for exchange of information relating to taxes. HKEx revises FAQs relating to listing rule changes to complement new sponsor regulation Hong Kong Exchanges and Clearing Limited (HKEx) has revised its series of frequently asked questions (FAQs) relating to listing rule changes to complement new sponsor regulation, which took effect on 1 October 2013, by adding a new question 23A. The new question relates to the redaction of information in an application proof or a Post Hearing Information Pack (PHIP) by a listing applicant. SINGAPORE Singapore government focuses on big data, open data, cloud & security Technology will continue to revolutionise the way governments operate. The Singapore government will be leveraging the opportunities provided by Big Data, sensors, cloud and open data to improve productivity and citizen services, while ensuring information security, said Zaqy Mohamad, Member of Parliament & Chairman for the Government Parliamentary Committee, Ministry of Communications and Information (MCI), Singapore. INDIA Rajan to remain RBI boss in Modi govt, says Goyal The BJP has dismissed speculation that it would be looking to replace RBI governor Raghuram Rajan, known for his hawkish stance on inflation control, should the party form the next government. "Just because he's been appointed by someone else doesn't mean we have an agenda to remove him," Piyush Goyal, BJP's treasurer told news agency Bloomberg in an interview. (Hindusten Time) RBI panel suggests Financial Resolution Authority to deal with failing institutions An RBI working group has recommended setting up a Financial Resolution Authority (FRA) to effectively deal with failing financial institutions and ensure overall stability in the system. "There should be a single FRA mandated under the law for resolving all financial institutions and FMIs (Financial Market Infrastructure), in coordination/cooperation with the respective financial sector regulators, as deemed necessary by the FRA. (Economic Times) RBI clamps down on offshore refinancing; bankers expect restructurings to rise India has taken steps to clamp down on the growing trend among banks to convert rupee exposure into overseas debt in a move likely to trigger a rise in onshore restructurings. In a notice issued on Tuesday evening, the Reserve Bank of India warned that Indian banks should not lend through their overseas branches or issue any kind of credit guarantee to help companies repay their rupee obligations with offshore debt. (Economic Times) Sebi eases rules for market making in illiquid equity cash segment Capital market regulator Securities and Exchange Board of India (Sebi) on Wednesday eased rules for market making in illiquid equity cash segment. The move is aimed at encouraging stock exchanges to offer this scheme for the cash segment, which will help retail investors gain exit from illiquid stocks. (Economic Times) JAPAN BOJ Said to Be Concerned Japan Bond Market Ignores Inflation Bank of Japan officials are increasingly concerned the nation's bond market is failing to reflect emerging inflation, raising the risk of a sudden surge in yields, according to people familiar with the matter. (Bloomberg) U.S., Japan Fail to Clinch Trade Deal The U.S. and Japan failed to clinch a last-minute deal on free trade, damping hopes for an early conclusion of a broader trade deal across the Pacific. Japan's economy minister Akira Amari told reporters Friday morning that the two countries have been unable to reach accord on any of the major contentious issues, including market access for automobiles and agricultural products. (WSJ) AUSTRALIA Australian government's obligations under the FATCA intergovernmental agreement with the US On 28 April 2014 the Treasurer on behalf of the Australian Government, signed an intergovernmental agreement with the Government of the United States of America to improve international tax compliance and implement FATCA. Income Levy Debate: Australia's Budget Realities Tax Abbott It's the A$6.4 billion question taxing Australian Prime Minister Tony Abbott as his center-right government finalizes its first federal budget: whether to introduce a temporary levy on income to help repay mounting national debt. (WSJ) THAILAND Monetary Policy Committee's Decision on 23 April 2014 Mr. Paiboon Kittisrikangwan, Secretary of the Monetary Policy Committee (MPC), announced the outcome of the meeting on 23 April 2014. PHILIPPINES Government drafting legal framework for Islamic banking in the country Islamic banking offers the same services as conventional banking system except that it strictly adheres to the rules and values set by Islamic Shariah. It is also known as interest-free banking system as the Shariah disallows the acceptance of interest rate for the accepting and lending of money. Finance Undersecretary Jose Emmanuel Reverente said the Aquino administration remains committed to promoting and nurturing Islamic financing in the country. (Philstar) INTERNATIONAL IMF Regional Economic Outlook: Asia and Pacific Sustaining the Momentum: Vigilance and Reforms William Coen appointed as the next Secretary General of the Basel Committee The Basel Committee on Banking Supervision announced today that it has appointed William Coen as its next Secretary General, for an initial term of three years. He will also serve as the Chairman of the Committee's Policy Development Group. UNITED STATES Debt Paydown Projected by U.S. to Be Biggest in Seven Years The U.S. Treasury Department announced the biggest quarterly paydown of government debt in seven years, as a stronger labor market helps boost tax revenue. (Bloomberg) U.S. Trade Aspirations Could Spark Backlash in Malaysia Trade is one of the key pillars of the U.S.'s plans to rebuild its influence and pivot back to Asia. But the ambitious scope of the Trans-Pacific Partnership initiative risks a backlash in the some of the countries where the U.S. is hoping to gain the most ground. (WSJ) EUROPE EU Nations Seeking Transaction Levy Remain Stuck on What to Tax European Union nations that want a financial-transaction tax remain deadlocked on what trades they should include, as the clock runs down before next month's European Parliament elections. (Bloomberg) Draghi Tells German Lawmakers ECB Bond-Purchases Unlikely European Central Bank President Mario Draghi told German lawmakers that a quantitative-easing program isn't imminent and is relatively unlikely for now, according to a euro-area official present at the meeting. (Bloomberg) ECB's Liikanen says regulation could be extended to shadow banks Major organisations that carry out banking activities, but are not banks, may become so important to the financial system that they need to be regulated like traditional banks, a European Central Bank governing council member said. (Reuters) ECB publishes 2014 report on financial integration in Europe The European Central Bank (ECB) has released its annual 'Financial Integration in Europe' report. EU Commission publishes 2014 report on European financial stability and integration The EU Commission has released its annual 'European Financial Stability and Integration Report' report. EU Commission publishes equivalence decisions on Argentina, Brazil, Hong Kong, Mexico, and Singapore The EU Commission has adopted five implementing decisions which confirm that the rules on credit rating agencies (CRAs) in place in Argentina, Brazil, Hong Kong, Mexico, and Singapore are equivalent to those in the EU. The adoption of these decisions follows the positive technical assessment of the regulatory environments in these jurisdictions by the European Securities and Markets Authority (ESMA), the EU supervisor for credit rating agencies. EU court to rule on UK challenge to transaction tax Britain may lose its challenge to stop plans by 11 euro zone countries to tax financial transactions when the European Union's top court rules next week, lawyers said. Britain is challenging an EU decision allowing the group of EU members to push ahead with their plans to tax stock, bond and derivatives trades to help make banks pay for the public money they received in the 2007-09 financial crisis. (Reuters) Features ASIFMA Homepage ASIFMA Careers ASIFMA Events Data Asia Oil and Gas Quarterly Australian and Canadian Banks' Different Strategies for Capital Non-Financial Corporate Global Industry Sector Office-Backed Loans in Japanese CMBS Transactions Rising Natural Gas Prices in Eastern Australia Fitch Assesses Taiwan's First Basel III Tier 1 Instrument CITIC Securities' Product Resembles ABS More Than REIT Fitch Affirms 3 Indonesian Palm Oil Producers; Revises Outlooks to Stable Global Reinsurers Report Solid Profits as Catastrophes Remain Manageable Asia-Pacific Energy Trade: A Hungry Region Extends Its Global Footprint Asia's National Oil And Gas Companies Use Their Financial Heft To Support Increasing Investments China's Search For Energy Leads It Outside The Region China's Shale Gas Industry May Be Booming, But It Still Provides Just A Fraction Of Needed Energy China's Department Stores Face An Uphill Battle As Competition Intensifies And Economic Growth Slows Taiwan Banks Can Tolerate Moderate Stress From Property Market Fluctuations Once Interest Rates Rise 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.