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29 April - 08
May 2014 | Issue 202
ASIFMA, together with
Standard Chartered and Thomson Reuters, today launched the "RMB
Roadmap", a new white paper which advocates and anticipates more open
capital markets and increased global usage of renminbi as part of the
currency's rise to greater prominence.
CHINA
PBoC: China to
keep monetary policy continuous, stable
The People's Bank of China (PBoC), the central bank, vowed to maintain
continuity and stability of its monetary policy in a report released on
Tuesday. PBoC will continue to adopt prudent monetary policy and fine tune
it in light of changes so that the policy can stabilize growth, boost
reforms, adjust structures, enhance people's welfare and prevent risks,
said the report. (Xinhua)
The People's Bank of China
(PBC) recently released China Financial Stability Report 2014, laying out
the work focus of 2014, which mainly includes the following aspects:
improving the prospectiveness, pertinence and collaboration of macro
control and introducing reform and innovation throughout all fields and
links of economic and social development to stimulate market vitality;
accelerating interest rate liberalization and improving market-oriented RMB
exchange rate formation mechanism, etc. (NAFMIII Newsletter)
China Regulator
Warns Lenders Over Personal Loan Abuses
China's banking regulator asked lenders in the nation's capital to tighten
up risk management over personal loans after it found people were using the
money to buy homes and stocks. Some Beijing-based lenders have approved
large amounts of borrowings with maturities that extend too long for
typical personal loans, according to a notice posted today on the website
of the China Banking Regulatory Commission. (Bloomberg)
China's PBOC to
Boost Property, LGFV Credit Supervision
China will strengthen monitoring of credit extended to local government
financing vehicles, real estate developers and industries facing
overcapacity, the nation's central bank said. The People's Bank of China is
taking steps to minimize potential contagion to the entire financial system
from risks in those areas, according to a quarterly monetary-policy report
posted on its website yesterday. (Bloomberg)
Bank of China, the country's
third-largest bank, plans to issue 2.5 billion yuan (HK$3.15 billion) of
yuan bonds in Luxembourg. The bonds, the first to be listed in the euro
zone by a Chinese firm, will be issued by BOC's Luxembourg branch and carry
a maturity of three years, according to a term sheet seen by the Post.
(SCMP)
China's CSRC asks
IPO candidates to submit issuance plans
The China Securities Regulatory Commission has asked IPO candidates which
have already passed listing hearings to submit issuance plans and related
materials, according to multiple sources familiar with the situation,
signalling that the next round of IPOs is about to come. (IFR Asia)
Further to the policy
announcement of the Shanghai-Hong Kong Stock Connect scheme, the Shanghai
Stock Exchange (SSE) has issued a consultation draft of the 'Implementing
Rules for the Shanghai-Hong Kong Stock Connect Pilot Scheme' for public
comment. Besides setting out the rules on the operational level for the
Shanghai-Hong Kong Stock Connect. The consultation period will end on 16
May 2014
China will launch its first
carbon-linked financial product on Thursday, a debt note linked to the
performance of carbon offsets on the Shenzhen Emissions Exchange, issued by
a unit of China General Nuclear Power Group (CGN). The launch will be a
first test of financial market confidence in China's emerging emissions
markets, as trading houses generally consider outright trade in carbon
permits unattractive, since it is limited to spot deals. (Reuters)
Bank of China, one of China's
biggest commercial banks, decided to raise renminbi capital of its
Frankfurt branch, in a move to strengthen its competitiveness in offshore
business of Chinese currency renminbi (RMB), said the bank on Wednesday.
Capital of Bank of China in Frankfurt would be boosted by one billion yuan
(about 162.49 million U.S. dollars), said the bank in Berlin. This was the
biggest capital increase in Chinese currency ever since by Chinese banks
operating in the euro zone, according to the bank. (Xinhua)
HONG KONG
SFC outlines
risks of crowd-funding and potential regulatory issues
The Securities and Futures Commission (SFC) today issues a notice reminding
parties engaging in crowd-funding activities of the potential application
of relevant securities laws and regulations, and reminding the public of
potential risks relating to participating in crowd-funding activities in
view of the increase in such activities internationally and in Hong Kong.
SFC issues guidelines
on internal product approval process
The Securities and Futures Commission (SFC) has issued a circular to
introduce a set of guidelines on the internal product approval process for
product providers of SFC authorised unit trusts and mutual funds, investment-linked
assurance schemes and unlisted structured investment products. The
guidelines are effective from 1 May 2014.
The U.S. Commodity Futures
Trading Commission's (Commission) Division of Clearing and Risk today
issued a time-limited no-action letter stating that DCR will not recommend
that the Commission take enforcement action against OTC Clearing Hong Kong
Limited (OTC Clear) for failing to register as a derivatives clearing
organization.
SINGAPORE
INDIA
The Sub-Committee of the
Financial Stability and Development Council (FSDC) constituted a high level
Working Group, with Shri Anand Sinha, the then Deputy Governor, RBI as
Chairperson and Dr. Arvind Mayaram, Secretary, Department of Economic
Affairs, Ministry of Finance, Government of India as Co-Chairperson to
suggest extensive strengthening of the resolution regime taking into
consideration the structure of Indian financial institutions and the Financial
Stability Board's Key Attributes of Effective Resolution Regime for
Financial Institutions. The Group has submitted its report to the Governor,
RBI and Chairman of the Sub-Committee of FSDC.
JAPAN
Japanese Prime Minister
Shinzo Abe on Tuesday launched a spirited defence of his
"Abenomics" reforms aimed at kickstarting the world's
third-largest economy, saying the policy blitz had yielded great results.
The reforms, based on big government spending, central bank monetary easing
and structural change, had been hailed internationally as an opportunity to
reverse deflation and sluggish growth after Abe launched them in 2012 when
elected for a second term. (Channel News Asia)
The Bank of Japans views on
the economic growth trend and potential risks in 2014 - 2016.
AUSTRALIA
Miscellaneous
amendments to the taxation laws
The exposure draft law and draft explanatory memorandum cover proposed
miscellaneous amendments to the taxation laws. The community's views are
sought on these amendments. The amendments seek to ensure the law operates
as intended by correcting technical or drafting defects, removing anomalies
and addressing unintended outcomes. The amendments are part of the
Government's commitment to the care and maintenance of the taxation laws.
THAILAND
Thailand's caretaker
government installed an acting prime minister to stave off collapse after a
court removed Yingluck Shinawatra, casting doubt on a general election
planned for July and risking renewed protests. (Bloomberg)
Thailand's sluggish economic
growth is expected to bottom out, as witnessed by improved domestic
consumption and private investment in March after shrinkage in the previous
two months, says a senior Bank of Thailand official. (Bangkok Post)
INDONESIA
The Indonesian government is
still scrambling to connect areas nationwide before it can move ahead with
15 ASEAN connectivity projects, which will connect member states to one
another. Indonesia could lose out in regional competition if ASEAN
connectivity outpaces domestic connectivity once the ASEAN Economic
Community (AEC) comes into effect next year, which will allow for the rapid
movement of goods, services and people within the region, say government
officials. (Jakarta Post)
MYANMAR
Japan to Assist in Drafting
Myanmar's Stock Exchange Regulations
Japanese Ministry of Finance's research team, Tokyo Stock Exchange and
Myanmar's Ministry of Finance will together draft rules and regulations for
Yangon Stock Exchange, said Dr Maung Maung Thein, deputy minister for
finance. He added that Japanese Ministry of Finance will also help to draw
the regulations for Stock Exchange Commission (SEC). (Eleven Myanmar)
INTERNATIONAL
Brazil, Russia, India, China
and South Africa are set to launch a contingency fund during a July summit
in Brazil, Brazilian Finance Minister Guido Mantega said Tuesday. The $100
billion fund is meant to be a buffer for the group of emerging economies
known as the Brics countries. (WSJ)
The global economy will
strengthen over the coming two years, but urgent action is still required
to further reduce unemployment and address other legacies from the crisis,
according to the OECD's latest Economic Outlook. "Advanced economies
are gaining momentum and driving the pick-up in global growth, while
once-stalled cylinders of the economic engine, like investment and trade,
are starting to fire again," OECD Secretary-General Angel Gurria said
while launching the Outlook during the Organisation?s annual Ministerial
Council Meeting and Forum in Paris.
UNITED STATES
Chair Janet L. Yellen.
Before the Joint Economic Committee, U.S. Congress, Washington, D.C.
The U.S. derivatives markets
regulator is preparing a proposed rule for automated trading, a senior
regulator said, after earlier asking market participants for insights on a
long list of questions. "I understand that Commission staff is
starting to work on a proposed rule," Scott O'Malia, a member of the
Commodity Futures Trading Commission, said in a speech. (Reuters)
EUROPE
EU Council adopts
rules on bank recovery and resolution
The EU Council has formally adopted the Recovery and Resolution Directive
(RRD). The Directive provides national authorities with tools to pre-empt
bank crises by introducing instruments at preparatory and preventative,
early intervention and resolution stages of bank failure. Member States
have until 31 December 2014 to transpose the Directive into national law.
Steven
Maijoor, Chair, European Securities and Markets Authority made a speech at
the AFME conference about the reporting of OTC and ETD.
Europe aims to
resolve FX dispute by late summer
European regulators aim to finalise their definition of foreign exchange
derivative by late summer, in a dispute that will determine whether part of
the $5tn-a-day forex market could face tougher legislation. Authorities
have been struggling for more than two months to determine if forex forward
contracts come under new rules designed to bring more transparency to
opaque off-exchange markets. (FT)
EU regulators to
focus on asset management
The revised Markets in Financial Instruments Directive will establish
controls on dark pools, as well as high-frequency and algorithmic trading,
says Sharon Bowles, chairwoman of the European Parliament Economic and
Monetary Affairs Committee. "We have not killed HFT or dark
pools," she said. "There are opportunities for venues to use additional
controls as a selling point, and the buy side can refuse to use venues that
do not do this." (Markets Media)
The United Kingdom and Sweden
attacked the bloc of EU nations pressing ahead with a Financial Transaction
Tax (FTT) after the group announced plans for the levy at Tuesday's (6 May)
meeting of European finance ministers in Brussels. France, Germany,
Austria, Belgium, Estonia, Greece, Italy, Portugal, Slovakia and Spain said
a tax on shares and some derivatives would be implemented in their
countries by 1 January 2016 at the latest. (EurActiv)
German Federal
Government publishes draft act to reduce dependence on ratings
The German Federal Government (Bundesregierung) has published a draft act
to reduce reliance on ratings. The act is intended to implement recently
enacted EU legislation on the regulation of rating agencies and the
supervision of institutions for occupational retirement provision,
undertakings for collective investment in transferable securities and
alternative investment funds managers in respect of over-reliance on credit
ratings.
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