Asia Regulatory Review | 28 May - 03 June 2014

28 May - 03 June 2014 | Issue 206 Spotlight ASIFMA-EuroCham Breakfast with Tilman Lueder ASIFMA and the European Chamber of Commerce are pleased to co-host a breakfast discussion on the occasion of the visit to Hong Kong of Tilman Lueder, Head of Asset Management at the European Commission. Mr. Lueder will highlight the latest regulatory developments in Europe regarding UCITS and the recent announcement of the HK-PRC mutual recognition scheme from an EU viewpoint. We hope you will consider joining us for this interesting and timely discussion on funds passporting from the European and Asian perspectives. First Annual Symposium on EU-Asia Relations in Financial Services Promoting Convergence and Investments in EU-Asian Financial Markets, co-organised by ASIFMA & CEPS. Shanghai-Hong Kong Stock Connect: a mutually beneficial arrangement The Shanghai-Hong Kong Stock Connect provides each exchange with a new menu of equity products to offer investors, plus a potentially large new customer base says Nick Ronalds, managing director and head of equities at ASIFMA. (The Banker) Updates CHINA China PBOC Official Calls For Bond Purchases To Lower Rates Yang Ping, an official with the research office of the central bank, said traditional easing measures, such as lowering the deposit reserve requirement or benchmark interest rates, won't benefit the real economy, and recommended the PBOC make selective bond purchases in the market to guide down longer-term corporate rates and prime loan rates. (MNI News) CSRC & PBOC vow to lower financing costs China has made a renewed commitment to support the real economy. After the State Council last week announced cuts to administrative costs for companies, China's central bank and the securities regulator have also made their commitments in this area. Over the weekend, the China Securities Regulatory Commission promised to lower financing costs for SMEs, by enhancing transparency for financial institutions, and ensuring institutions simplify financing procedures. (CCTV) China bank watchdog says property loan risk under control but steps up oversight China's banking regulator said on Friday it was stepping up oversight to prevent risks from some failed property developers from spreading into the broader financial system, but said overall risk from property loans was controllable. (Reuters) China targeting 2014 launch of first crude oil futures China is aiming to launch its first crude oil futures contract this year, the vice chairman of the securities regulator said on Wednesday, a move that would give the world's second largest oil consumer greater influence in global pricing. The long-delayed contract, proposed by the Shanghai Futures Exchange (SHFE), will be China's first commodity futures contract that allows participation from overseas institutional investors without setting up a local subsidiary. (The Star) HONG KONG FSTB publishes consultation conclusions on improving corporate insolvency law and detailed proposals for introducing new statutory corporate rescue procedure The Financial Services and the Treasury Bureau (FSTB) has published the conclusions of its April 2013 consultation on the corporate insolvency law improvement exercise and the detailed proposals for introducing a statutory corporate rescue procedure (CRP) and insolvent trading provisions. SFC introduces online system for dealing disclosures under Takeovers Code The Securities and Futures Commission (SFC) today launches a new online platform to streamline the submission process for disclosures of dealings under Rule 22 of the Code on Takeovers and Mergers (Takeovers Code). Starting 1 July 2014, all Rule 22 dealing disclosures must be submitted using the online system (Note 1). SINGAPORE Re-appointments in the MAS Board of Directors The members of the MAS Board of Directors are listed in the Annex. New financial reporting framework for SGX-listed firms by 2018 Companies listed on the Singapore Exchange (SGX) will have to adhere to a new financial reporting framework identical to the International Financial Reporting Standards (IFRS) in 2018. The Singapore Accounting Standards Council (ASC) and SGX issued a joint statement on Thursday (May 29) stating companies must apply the new framework for annual periods beginning on or after Jan 1, 2018. (Channel News Asia) ASEAN Exchanges Introduces Three New Tradable ASEAN Indices ASEAN Exchanges today announced an expanded FTSE ASEAN Index Series including a comprehensive suite of indices broadly covering the growing ASEAN equity market. The three new tradable ASEAN indices are the FTSE ASEAN All-Share Index, FTSE ASEAN Stars Index and FTSE ASEAN All Share Ex-Developed Index. INDIA Narendra Modi prepares to raise India's FDI limits India's new government is preparing to ease restrictions on foreign direct investment in the country, including in arms manufacturing, as part of its plan to boost economic growth and create jobs, government officials in New Delhi said on Friday. (FT) Modi offered breathing space as Reserve Bank of India holds rates India's central bank has given the new government of Narendra Modi breathing space by keeping interest rates steady - despite high inflation - in the bank's first policy statement since the prime minister was elected with a mandate to revive the economy. (FT) India's economic growth disappoints India's economic growth has remained subdued, due largely to a slowdown in the manufacturing sector, official figures have shown. The economy grew at an annual rate of 4.6% between January and March, below analysts' forecasts and the same pace as the previous quarter. (BBC) Concerns about Competitive Monetary Easing Governor Dr. Raghuram G. Rajan's remarks in the Policy Panel Discussion, at the '2014 BOJ-IMES Conference on Monetary Policy in a Post-Financial Crisis Era' KYC: Compliance vs Convenience Shri R Gandhi, Deputy Governor, Reserve Bank of India concludes the KYC structure built by us is not of our own only; it is based on the consensual approach by all the committed nations. It is for the general good of the citizens of the world. We seek the understanding and the cooperation of all bank customers in complying with the KYC requirements on an ongoing basis. No security comes free of cost or inconvenience. That said, it will be our continued endeavour to minimize such cost and inconvenience. Reserve Bank is committed to ease of operations by bank customers, while requiring the banks to be vigilant about nefarious designs of anti-social elements and terrorists to use the banking and financial systems. New Indian Government Seeks Issuance of More Bank Licenses India's new government, led by pro-business Prime Minister Narendra Modi, wants regulators to issue more banking licenses to make the country's financial-services industry more competitive, the head of the Department of Financial Services. (WSJ) JAPAN Japan's Growth Potential and Quantitative and Qualitative Monetary Easing Kikuo Iwata, Deputy Governor of the Bank of Japan - Remarks at a Panel Discussion at The Bank of Korea International Conference 2014. FAQ on Financial Instruments and Exchange Act The Japanese Financial Services Agency published the latest FAQs on the Act. Abe's Japan reform plan draft leaves tough questions unanswered A draft plan to boost Japanese growth promises to overhaul corporate governance, promote technology and attract private investment, but it leaves many of the toughest questions unanswered as the country seeks to claw its way out of a crippling cycle of deflation. (Reuters) Japan Sees Trouble Ahead for Public Pension Japan's health ministry released a financial outlook for the public pension system Tuesday, paving the way for the nation's massive pension reserve fund to reshuffle its investment portfolio. (WSJ) AUSTRALIA Monetary Policy Decision At its meeting today, the Board decided to leave the cash rate unchanged at 2.5 per cent. Providing Certainty for Contractual Loss Absorption Provisions in Regulatory Capital The purpose of this paper is to assist in the preparation of advice to Government on the need for legislative amendments to facilitate the effective operation of new prudential requirements on the loss absorbency of regulatory capital. INDONESIA RI prepares Islamic finance road map Indonesia's capital market regulator is preparing a five-year road map for Islamic finance to expand the industry in Southeast Asia's largest economy. The plan will help boost the number of Islamic capital market products and expand the industry's investor base, the Financial Services Authority (OJK) said in a statement. (Jakarta Post) Indonesia FEMC Issued Market Code of Conduct (CoC) of Indonesia Financial Market Indonesia Foreign Exchange Market Committee (Indonesia FEMC) symbolically presented Market Code of Conduct (CoC) to the Governor of Bank Indonesia Agus D.W. Martowardojo and Head of Financial Service Authority, Muliaman D. Hadad, in Bank Indonesia Jakarta, 26 May 2014. This handing over of CoC to the authority is a manifestation of agreement of the market players for participating in the development of an Indonesia financial market which is credible, resilient, maintained its stability, continuously growing and conducive to support the development of the national economy, and able to compete in an international market. THAILAND Businesses will propose full economic overhaul Seven business associations plan to submit a joint proposal for national economic reform to the National Council for Peace and Order (NCPO), saying they are ready to support the army to drive for changes to enhance Thailand's long-term competitiveness. (Bangkok Post) INTERNATIONAL IOSCO Seeks Stakeholder Views on its 2015 - 2020 Strategic Plan IOSCO is undertaking a review to develop a strategic plan for the period from 2015 to 2020. The objectives of the review are to: Define the outcomes IOSCO wants to achieve by 2020; Develop a strategic plan for IOSCO and the IOSCO Secretariat to achieve those outcomes; Determine funding and resourcing needs of the IOSCO Secretariat to implement the strategic plan and annual business plans; and develop a financing plan to meet the funding and resourcing needs. Principles for financial market infrastructures: CPSS and IOSCO publish update on implementation monitoring The Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO) have published the first update to the Level 1 assessments of implementation monitoring for the principles for financial market infrastructures (PFMIs). UNITED STATES US economy contracted in first quarter of 2014 The US economy shifted into reverse in the first three months of 2014 shrinking by an annualised rate of 1%, official estimates have shown. It is the worst economic performance since the first quarter of 2011. (BBC) EUROPE Financial Stability Review shows progress in strengthening banks and sovereigns; hunt for yield contributing to the build-up of new risks Euro area financial system stress has remained moderate over the last half-year, according to the new Financial Stability Review of the European Central Bank (ECB). Investor concerns regarding the global financial crisis have continued to diminish, amid on-going action to address "legacy" risks of past crises for both banks and sovereigns. Building growth: Country-specific recommendations 2014 The European Commission has adopted a series of economic policy recommendations to individual Member States to strengthen the recovery that began a year ago. The recommendations are based on detailed analyses of each country's situation and provide guidance on how to boost growth, increase competitiveness and create jobs in 2014-2015. EU Commission requests technical advice from ESMA on implementing acts The EU Commission has issued a request to the European Securities and Markets Authority (ESMA) for technical advice on implementing acts concerning the regulation on insider dealing and market manipulation (MAR). ECB launches public consultation on draft ECB regulation on supervisory fees The European Central Bank (ECB) has today published a draft ECB Regulation on supervisory fees for public consultation. The ECB will take over as supervisor of euro area banks in November 2014 as part of the Single Supervisory Mechanism (SSM). The SSM will directly supervise up to 130 institutions and work with national competent authorities to oversee smaller banks. ECB and EBA publish updated classification system for their reporting frameworks The European Central Bank (ECB) and the European Banking Authority (EBA) have published an updated version of the classification system that links their respective reporting frameworks. EBA consults on technical standards on supervisory benchmarking The European Banking Authority (EBA) has launched a consultation relating to draft Implementing Technical Standards (ITS) and Regulatory Technical Standards (RTS) for specifying the EU framework for the supervisory benchmarking exercise under CRD 4 that will look at the consistency and comparability in risk-weighted assets (RWAs) produced by institutions' internal modelling approaches (except for operational risk) for calculating own funds requirements for credit and market risk exposures. The consultation closes on 19 August 2014. ESMA publishes further Q&A on implementation The European Securities and Markets Authority (ESMA) has published a question and answer document intended to provide clarity on the requirements and practice in the application of the Credit Rating Agencies (CRA) Regulation and, in particular, the CRA 3 Regulation (Regulation (EU) No 462/2013 of 21 May 2013). BoE and ECB publish discussion paper on securitisation The Bank of England (BoE) and the European Central Bank (ECB) have jointly published a discussion paper on securitisation. The paper considers options that authorities could support to revitalise the securitisation market, including developing high-level principles for 'qualifying securitisations' and harmonising securitisation standards across the EU. The deadline for comments is 4 July 2014. Features ASIFMA Homepage ASIFMA Careers ASIFMA Events Data Australian ABS Performance Review Q1 2014 Chinese Corporates: New Policy on Cross-Border Guarantees Credit Analysis on China Credit Quality of Australian Covered Bonds in Q1 2014 Implications of the New Nine Initiatives Indonesian Developers Potential Changes to India's Bank Resolution Framework Increasing Yuan Acceptance Drives Dim Sum Bond Demand Fitch Downgrades Bakrie Telecom to 'RD'; Recovery Rating to 'RR5' Chinese Life Insurers Continue to Improve Product Mix Fitch Affirms Thailand's 4 Largest Commercial Banks, Subsidiaries Suncorp Write-Down Reflects Wider Life Profit Challenges APAC SF Ratings Stable in 2013; Outlook Stable for 2014 India Bank Proposals Part of Wider RBI Reform Push Is Australia's Sovereign Rating On The Wane? China Still Has Work To Do On The Municipal Bond Market What's Driving The RMBS Comeback In Australia? Downside Pressure Eases Mid-2014 For Most Global Insurance Key Risks Singapore's Life And Property & Casualty Insurance Sectors Have Low Risk 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.