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ASIFMA Asia Regulatory Review

26 January - 2 FebruAry 2016 | Issue 285


ASIFMA wishes you all a Healthy, Happy & Prosperous Year of the Monkey!  The Asia Regulatory Review will take a short break and will return on 16 February.



PBC expands pilot macro-prudential management of all-dimension cross-border financing | (Chinese Only)

The PBC (People's Bank of China) decided to expand the pilot macro-prudential management of all-dimension cross-border financing for 27 financial institutions and the enterprises registered in the four FTZs (Free Trade Zones) of Shanghai, Tianjin, Guangdong and Fujian featuring the integration of Chinese and foreign currencies from January 25, 2016. PBC and SAFE (State Administration of Foreign Exchange) won't carry out pre-approval of foreign debt for the financial institutions and enterprises participating in the pilot project, and they can carry out cross-border financing independently, either in Chinese or foreign currency, within the limit linked with their capital or net assets. (NAFMII Newsletter)

Chinese premier, IMF chief discuss economic, financial situation over phone
Chinese Premier Li Keqiang talked with International Monetary Fund (IMF) Managing Director Christine Lagarde on the phone upon her request about the global economic and financial situation and that in China. Li said that the world economy, which is in the middle of deep adjustments, remains in a complicated situation, weighed down by a weak recovery and rising uncertainties. An international consensus has emerged on the need to bolster growth, take forward restructuring and enhance cooperation. (Xinhua)

CSRC releases Code for Annual Report on Corporate Bonds and supplementary rules | (Chinese Only)
The CSRC (China Securities Regulatory Commission) recently released the Code on the Content and Format of Information Disclosure by Public Corporate Bond Issuers No.38 - Content and Format of Annual Report on Corporate Bonds and the Supplementary Rules on Information Disclosure in the Annual Report of Listed Companies that Issue Corporate Bonds Publicly. The CSRC will continuously improve the regulatory system of corporate bond information disclosure, and intensify interim and post-supervision to push for standardization, so as to keep enhancing the quality and standard operation of information disclosure by corporate bond issuers and protect the investors' legal rights and interests. (NAFMII Newsletter)

Shenzhen-Hong Kong Stock Connect ready for launch: Official
The long-planned Shenzhen-Hong Kong Stock Connect Program is likely to be launched this year, Shenzhen Stock Exchange deputy general manager Lin Fan said. Lin said technological and rule preparations are ready for a link program which will allow investors to trade on both bourses under a quota. (China Daily)

China Allows More Foreign Banks To Trade In Onshore FX Market
China said it will allow more foreign banks to trade in the onshore foreign-exchange market, a move that further opens up the market to overseas financial institutions. The China Foreign Exchange Trade System, a unit under the People's Bank of China that manages on the onshore forex market, announced that overseas yuan participant banks will be able to trade forex onshore after applying for membership of the CFETS. Overseas yuan participant banks foreign banks who conduct daily yuan business with clients overseas - whether companies or individuals. Eligible overseas banks need to have large yuan purchase/sales business, have international influence and a presence in the region to qualify, CFETS said. Once they've been approved, banks will be able to trade all onshore products, including yuan spot, forwards, swaps and options. (MNI News)


HKMA - Hong Kong Banking Sector: 2015 Year-end Review and Priorities for 2016
Slides from Arthur Yuen's speech, Deputy Chief Executive, HKMA.

HKMA Insight - The Hong Kong Dollar Linked Exchange Rate System
This article is aimed to promote better understanding by the public and market participants of our currency board system so as to avoid unwarranted concerns.

HKMA Insight - Norman Chan on Get a Full Grasp of the Situation and Stay Calm
Norman Chan's insight on public concerns and anxieties on the Hong Kong dollar exchange rate and fund flows recently.

HKEX Launches Real-time Price Information of Selected Futures Contracts on HKEX website
Hong Kong Exchanges and Clearing Limited (HKEX) has introduced real-time price information of selected futures contracts on the HKEX website to help further promote the contracts. HKEX website is now providing real-time price information of: RMB Currency Futures, or USD-CNH Futures, The London Metal Mini Futures, and Stock Futures.

HKEx Publishes Results of its Latest Review of Disclosure in Issuers' Annual Reports
HKEx published a report on the findings and recommendations from its review of issuers' annual reports for the financial year ended in December 2014. As part of its regular regulatory activities, the Exchange reviews issuers' annual reports to monitor their compliance with its Listing Rules (the Rules), corporate conduct and disclosure of material events and developments, and releases its findings and recommendations to improve transparency and promote a fair, orderly and informed market.

Taiwan Stock Exchange and Singapore Exchange sign Strategic Partnership Agreement, TWSE subsidiary to join SGX as remote trading member
Taiwan Stock Exchange (TWSE) and Singapore Exchange (SGX) announced the establishment of a strategic partnership, where a subsidiary of TWSE, Global Link Securities Co. Ltd, will join SGX as a remote trading member, a significant first step towards wider partnership between the two exchanges. The agreement will allow TWSE member brokers to directly trade SGX-listed securities, thus making such international trades more efficient and cost effective for Taiwan investors. Trading of Singapore listed securities through Global Link is expected to go live in second quarter of 2016.


MAS - "Regulatory Landscape for 2016: Positioning for a Dynamic, Trusted and Vibrant Market"
Keynote Address by Mr. Ong Chong Tee, Deputy Managing Director, Monetary Authority of Singapore.

IBF and SGX Announce New Initiatives To Upskill Stockbroking Industry
With the aim of upskilling the stockbroking industry, the Institute of Banking and Finance Singapore (IBF), the national accreditation and certification agency for financial sector competencies, and Singapore Exchange (SGX) announced new training and development initiatives, following an extensive survey and feedback received from the stockbroking industry last year.


The Bank of Japan - Introduction of "Quantitative and Qualitative Monetary Easing with a Negative Interest Rate"

The Policy Board of the Bank of Japan decided to introduce "Quantitative and Qualitative Monetary Easing (QQE) with a Negative Interest Rate" in order to achieve the price stability target of 2 percent at the earliest possible time.

The Bank of Japan - Outlook for Economic Activity and Prices (January 2016)
The Bank's View on Japan's economic outlook.


RBI - Financial Reforms - Past and Present
Speech by Dr. Raghuram Rajan, Governor.

RBI - Research Imperatives for the Indian Banking Sector
Speech by Shri S. S. Mundra, Deputy Governor.

RBI asks Banks to file FDI related Forms Online from February 8
The Reserve Bank of India has asked authorised dealers (AD) Category - I banks to mandatorily file, from February 8, 2016, forms Advanced Remittance Form (ARF), Foreign Collaboration General Permission Route(FC-GPR) and Foreign Collaboration Transfer of Shares (FC-TRS) only through online mode on e-Biz portal. Physical filing of these forms will be discontinued from February 8, 2016.


Australian Government - The Treasury - resilience and collateral protection and client money reforms
The Australian Government is seeking comment on its resilience and collateral protection reform package, and important changes to the client money regime.

ASIC update on red tape reduction
ASIC has provided a further update on its work to cut red tape and reduce compliance costs. ASIC Commissioner John Price said, 'ASIC has already made deregulatory savings for business of more than $470 million since September 2013 and we are working to further cut red tape for businesses and individuals'.

FSC - Financial Policy Roadmap for 2016
The FSC outlined a roadmap for financial policy initiatives in 2016, focused on two main themes: Financial Reform and Financial Stability.

FSC - Omnibus Account' for Foreign Investors to be Introduced
The FSC announced its plan to introduce an 'omnibus account' in an effort to make it easier for foreign investors to trade locally-listed stocks in the Korean stock market.


Indonesia must join multilateral trade pacts: Jokowi
President Joko "Jokowi" Widodo has insisted that Indonesia must join multilateral free-trade agreements to deal with regional and global competition. In 2016, the government would focus on improving the national economy to boost competitiveness in the midst of global and regional changes, including the ASEAN Economic Community (AEC), the president said. (Jakarta Post)

Financial safety net bill may be passed in first quarter
Lawmakers at the House of Representatives hope to pass the Financial System Stability Net (JPSK) bill into law in the first quarter to provide legal certainty for policy makers when making crucial financial decisions in times of need. According to Hendrawan Supratikno of the Indonesian Democratic Party of Struggle (PDI-P), also a member of Commission XI overseeing finance and banking, deliberations on the bill are almost complete.

IDX, Kadin team up to attract more firms to bourse
The Indonesian Stock Exchange (IDX) and the Indonesian Chamber of Commerce and Industry (Kadin) will jointly organize coaching clinics nationwide as part of efforts to encourage more companies to float shares on the bourse. IDX president director Tito Sulistio said that the clinics and incubation programs would start in April. "We, together with underwriters, will hold the clinics to provide an understanding of the bourse and of IPO [initial public offering] procedure to Kadin's members," he told reporters after signing the agreement at the IDX office in South Jakarta. (Jakarta Post)


Federal Reserve Board releases supervisory scenarios for 2016 Comprehensive Capital Analysis and Review (CCAR) and Dodd-Frank Act stress test exercises and issues instructions to firms participating in CCAR
CCAR evaluates the capital planning processes and capital adequacy of the largest U.S.-based bank holding companies, including the firms' planned capital actions such as dividend payments and share buybacks and issuances. The Dodd-Frank Act stress tests are a forward-looking component to help assess whether firms have sufficient capital. Strong capital positions can absorb losses and help ensure that banking organizations have the ability to lend to households and businesses even in times of financial and economic stress.

Federal Reserve Board extends comment period to March 21, 2016, for proposed policy statement detailing the framework the Board would follow in setting the Countercyclical Capital Buffer (CCyB)
The CCyB is a macroprudential tool that can be used to increase the resilience of the financial system by raising capital requirements on internationally active banking organizations when there is an elevated risk of above-normal losses in the future. The CCyB would then be available to help banking organizations absorb shocks associated with declining credit conditions. The proposed policy statement provides background on the range of financial system vulnerabilities and other factors the Board could take into account as it evaluates settings for the buffer.

CFTC Grants Eurex Clearing AG Registration as a Derivatives Clearing Organization
The U.S. Commodity Futures Trading Commission (CFTC) issued an order granting Eurex Clearing AG (Eurex Clearing) registration as a derivatives clearing organization (DCO) under the Commodity Exchange Act (CEA). This action furthers the CFTC's commitment to working across borders to promote central clearing.

CFTC Signs MOU with Two German Authorities to Enhance Supervision of Cross-Border Clearing Organizations
The U.S. Commodity Futures Trading Commission (CFTC) announced that CFTC Chairman Timothy Massad signed a Memorandum of Understanding (MOU) with the Bundesanstalt fur Finanzdienstleistungsaufsicht (BaFin) and Deutsche Bundesbank (Bundesbank) regarding cooperation and the exchange of information in the supervision and oversight of clearing organizations that operate on a cross-border basis in the United States and in Germany.

A Few Minutes With FINRA - 2016 Regulatory and Examination Priorities Letter
Dan Sibears, FINRA's Executive Vice President of Regulatory Operations - Shared Services, provides further information on several key issues that are included in FINRA's 2016 Annual Regulatory and Examination Priorities Letter.


ESMA issues technical standards on settlement discipline under CSDR
The European Securities and Markets Authority (ESMA) has published draft regulatory technical standards (RTS) on settlement discipline which ESMA has to deliver for the implementation of the Central Securities Depository Regulation (CSDR).

ECA publishes report on ESMA'S supervision of credit rating agencies
The European Securities and Markets Authority (ESMA) welcomes the European Court of Auditors' (ECA) Report on ESMA's role as the single supervisor of credit rating agencies (CRAs) in the European Union (EU).

ESMA updates CRR standard on main indices and recognised exchanges
The European Securities and Markets Authority (ESMA) has its Implementing Regulatory Standard (ITS) on main indices and recognised exchanges under the Capital Requirements Regulation (CRR). ESMA suggests adding the Russell 1000 Index, the Shanghai Shenzhen CSI 300, the S&P BSE 100 Index and the FTSE Nasdaq Dubai UAE 20 Index to the list of main equity indices. ESMA also suggests replacing the Nikkei 225 with the Nikkei 300 and the NZSE 10 with the S&P NZX 15 Index. But ESMA is of the opinion that the Hang Seng Composite Index and the Russell 3000 Index should not be added to the list of main equity indices.

ESMA comments on the IASB'S exposure draft
The European Securities and Markets Authority (ESMA) published its comment letters to the IASB and to EFRAG on the IASB's Exposure Draft Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts.

ESMA publishes consolidated UCITS Q&A
The European Securities and Markets Authority (ESMA) has published a consolidated Questions and Answers on the application of the Undertakings for the Collective Investment In Transferable Securities Directive (UCITS).

ESMA consults on MAR guidelines regarding market soundings and delayed disclosure of inside information
The European Securities and Markets Authority (ESMA) has opened a public consultation on draft guidelines clarifying the implementation of the Market Abuse Regulation (MAR). MAR strengthens the existing market abuse framework by extending its scope to new markets, platforms and trading behaviours. It contains prohibitions for insider dealing and market manipulation, and provisions to prevent and detect these

ESAS submit a joint letter to the European Commission on cross-selling of financial products in the EU
The Chairpersons of the three European Supervisory Authorities (ESAs) - EBA, EIOPA and ESMA - sent a joint letter on cross-selling of financial products to Jonathan Hill, the European Commissioner for Financial Stability, Financial Services and Capital Markets Union.

ESMA to cooperate with Mexican and South African regulators on CCPs
The European Securities and Markets Authority (ESMA) has established two Memoranda of Understanding (MoUs) under the European Markets Infrastructure Regulation (EMIR) with the Mexican Comisión Nacional Bancaria y de Valores (CNBV) and the South African Financial Servcies Board (FSB) respectively.

EBA 5th anniversary conference to discuss achievements and future work of the agency
As the European Banking Authority (EBA) gets ready to mark its first five years of activities with its conference in London, Chairperson Andrea Enria explains the conference will be about dialogue with banking stakeholders on achievements and remaining challenges in strengthening the EU banking sector.

EBA launches an impact assessment of IFRS 9 on banks in the EU
In the context of the forthcoming implementation of the IFRS 9 Financial instruments standard (IFRS 9) in the EU, the European Banking Authority (EBA) is launching an impact assessment of the standard on a sample of approximately 50 institutions across the EU.

Andrew Bailey appointed as new Chief Executive of the FCA
HM Treasury announced the appointment of Andrew Bailey as the new permanent Chief Executive of the Financial Conduct Authority (FCA).

FCA - Clarifying our supervisory intentions: overall responsibility for the legal function under the Senior Managers Regime
It has come to our attention that there is uncertainty as to whether an individual in charge of a firm's legal function requires approval under our Senior Managers regime. This statement describes our plans to consult on this area; and makes clear that firms that have sought to make decisions in good faith about whether or not approval is needed, on the basis of our published rules and other communications, should not need to change their approach in the interim.

FCA and PRA investigations into HBOS senior managers
The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have decided to start investigations into certain former HBOS senior managers.

FCA - Reform of the legacy Credit Unions sourcebook
In this policy statement the FCA and PRA provide feedback on responses to CP15/21 'Reform of the legacy Credit Unions sourcebook' and set out final rules and guidance. We also provide the changes to our Credit Unions Sourcebook (CREDS) as a result of our December 2014 consultation on forms, transitional and consequential aspects of the new accountability.

The Bank of England - The Financial Policy Committee's Framework for the Systemic Risk Buffer (SRB)
It is proposed that those banks and building societies with total assets above 175bn pounds will be set progressively higher SRB rates as total assets increase through defined buckets (see table below).HM Government required the FPC to produce a framework for the SRB at rates between 0% and 3% of risk-weighted assets (RWAs). Under the FPC's proposals, ring-fenced bank sub-groups and large building societies in scope with total assets below 175bn poundswill be subject to a 0% SRB.

The Bank of England - A New Heart for a Changing Payments System - speech by Minouche Shafik
The speech covers the evolution in the payments landscape, a blueprint for RTGS and the Bank's settlement infrastructure, and a blueprint with buy-in.

Post crisis reforms: the lessons of balance sheets - speech by Andrew Bailey
Given at the International Financial Services Forum, Dublin.


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