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ASIFMA Asia Regulatory Review

12 January 2016 | Issue 282


Job opening at ASIFMA - Manager, Office of the CEO

ASIFMA now seeks a Manager to provide coordination, research and analytical support for the office of the CEO. This person will play a central role in coordinating daily work and projects across ASIFMA and will support the CEO directly in his external role, including providing high quality briefing and speaking notes. This person will also contribute to our corporate governance by supporting our senior management and board processes. Application deadline: 22 January 2016.



RMB rate to depend more on basket of currencies: PBOC economist
The Chinese yuan's exchange rate will be determined with more reference to a basket of currencies, as it faces persistent depreciation pressure against the U.S. dollar, according to a senior economist with the central bank. "Giving more consideration to a basket of currencies means the RMB's value will be kept basically stable against the whole basket," said Ma Jun, chief economist of the People's Bank of China's research bureau. (Xinhua)

China banking regulator to address risks in 2016
China Banking Regulatory Commission (CBRC) vowed to further detect and mitigate financial risks in key areas in 2016. The CBRC said in an online statement that it will try to contain debt risks of financing vehicles and properly deal with credit risks concerning cash-strapped housing developers. The commission will work to prevent a chain reaction following debt defaults and guard against the amplification of financial risks. The CBRC will ask banks to improve their ability to cope with non-performing assets in a market-based, diverse and comprehensive way. "It is a bottom line to ward off financial risks," said the CBRC statement. (China Daily)

China suspends circuit breaker amid market madness
China's securities regulator has suspended its newly implemented circuit breaker mechanism designed to tame market volatility after it exacerbated stock selloffs and shut down equity trading early twice in one week. The China Securities Regulatory Commission announced late on Thursday night that the circuit breaker system would be halted from Friday, only four days after introduction, without saying how long the suspension will last. (FinanceAsia)


HKMA - Return on Liquidity Monitoring Tools (Form MA(BS)23)
The HKMA informed the electronic file for Parts 1 to 3 of the Return on Liquidity Monitoring Tools are now available for downloading from the HKMA's supervisory communication website (http://www.stet.iclnet.hk) for the purpose of reporting starting from the position of 31 December 2015.


SGX seeks feedback on proposed amendments to align Listing Rules with Companies Act
Singapore Exchange (SGX) is consulting the public on proposed Mainboard and Catalist Listing Rules changes including the electronic transmission of notices and documents to shareholders. The proposals are to align the Rules with the amended Companies Act passed in October 2014. SGX is also seeking feedback on policy positions highlighted by other recent statutory changes.

SGX consults on "comply or explain" sustainability reporting rules and guide
Singapore Exchange (SGX) will be introducing sustainability reporting on a "comply or explain" basis and is inviting public comment on the proposed rules and guide. This marks further progress from the voluntary reporting that has been in place since 2011, and is a timely response to the growing global interest in sustainability information.

SGX - Gearing up audit committees for 2016 - raising the bar in financial reporting and audit
Over 400 audit committee and board members gathered at the annual Audit Committee Seminar to hear first-hand from corporate regulators on key areas of focus for 2016. During the seminar, the Accounting and Corporate Regulatory Authority of Singapore (ACRA) shared the key learning lessons from companies found to be non-compliant with the accounting standards and whose directors were issued advisory or warning letters under ACRA's Financial Reporting Surveillance Programme. A summary of the seminar is outlined, please click on the link to learn more.


The Bank of Japan - Summary of Opinions at the Monetary Policy Meeting on December 17 and 18, 2015

The report contains the Bank of Japan's opinion on economic and financial developments, and monetary policy.

JSDA - Interim Report of the Working Group on Shortening Stock Settlement Cycle
In July 2015, JSDA, TSE (Tokyo Stock Exchange) and JSCC (Japan Securities Clearing Corporation) set up the "Working Group on Shortening Stock Settlement Cycle (WG)" as its secretariat to conduct discussion amongst market participants and related parties for realization of shortening stock settlement cycle in Japan (change of settlement cycle to T+2). On December 29, the WG published :Interim Report of the Working Group on Shortening Stock Settlement Cycle", which included results of the discussions at the WG to date and the target schedule for the change of settlement cycle to T+2.


RBI Technical Advisory Committee on Financial Markets meets
The Technical Advisory Committee reviewed the recent developments in money, government securities and foreign exchange markets and discussed various issues relating to the financial benchmarks, disclosure and reporting requirements for commercial papers (CP) and relaxations in the documentation-related requirements for hedging in the forex market. The TAC also reviewed the recommendations of the Working Group on Interest Rate Options (Chairperson: Prof P.G. Apte) and Implementation Group on encouraging retail participation in government securities (Chairperson: Smt. Rekha Warriar). The TAC approved the constitution of a Standing Group under the TAC to suggest measures for compliance with global standards in the OTC derivative market. The Committee also deliberated on measures for development of corporate bond and the term money market.

SEBI - Mandatory requirements / Exit Policy for Commodity Derivatives Exchanges
SEBI has reviewed the said circular and decided that, if there is no trading operation on the platform of any commodity derivatives exchanges for more than twelve months, then in terms of the above circular, such exchange shall be liable to exit. Other rules are detailed in the circular.

SEBI Board Meeting
The SEBI Board met in Mumbai and took the following decisions regarding: 1. Review of prudential limits on investments by Mutual Funds; 2. Introduction of "Primary Market Debt Offering through private placement on electronic book"; 3. Exit opportunity to dissenting shareholders under Companies Act, 2013; and 4. Disclosure requirements for issuance and listing of Green Bonds.

Australia Government - Mid-year Economic and Fiscal Outlook 2015/16
The 2015 16 MYEFO document was released on 15 December 2015 by the Treasurer, the Hon. Scott Morrison MP, and the Minister for Finance, Senator the Hon. Mathias Cormann.


FSC Holds Meeting over Risk Factors in Financial Markets in 2016
The FSC held a meeting on January 7 with the FSS, KRX and KCIF to examine internal and external risks in financial markets in 2016 and ensure prompt policy responses to stabilize markets if needed.

FSC - Amendments to the Enforcement Decree of Financial Investment Services and Capital Markets Act
Crowdfunding rules will take effect January 25 this year as relevant amendments to the Enforcement Decree of the Financial Investment Services & Capital Markets Act were approved in a Cabinet meeting on January 5, 2016.

FSS - Annual Report (2014)
The Financial Supervisory Service released the English translation of the 2014 Annual Report that the Financial Supervisory Service published on June 30, 2015. The report outlines the major supervision activities and accomplishments of the FSS for the preceding year. In addition to summary statistics on financial institutions and market activities, it highlights supervisory initiatives that the FSS undertook throughout the preceding year to promote the safety and soundness of financial services firms and the financial services industry.


Government to form committee to develop sharia finance industry
The government decided to immediately establish a new national committee to develop the sharia financial industry, which still holds a small market share. The committee is to be led by President Joko "Jokowi" Widodo and will comprise a number of relevant ministers. The Indonesian Ulema Council (MUI) will act as its advisory board. Among the committee's tasks is to harmonize laws, National Development Planning Minister Sofyan Djalil said. (Jakarta Post)

OJK starts listing 'important' banks
The Financial Services Authority (OJK) has postponed the completion of a list of the country's major banks pending the endorsement of a financial system bill by the House of Representatives sometime in early 2016. The financial authority is preparing the list of the banks, known as domestic systemically important banks (DSIB), while at the same time drafting a regulation requiring those lenders to increase their capital. OJK chairman Muliaman D. Hadad said the list of the important lenders needed to await the passing of the Financial System Safety Net (JPSK) bill. The government and the House are expected to resume deliberations on the bill soon. (Jakarta Post)


BIS - Revised market risk framework and work programme for Basel Committee is endorsed by its governing body
At its meeting in Basel on Sunday 10 January, the Basel Committee's oversight body, the Group of Central Bank Governors and Heads of Supervision (GHOS), endorsed the new market risk framework. The fundamental review of the market risk standard is a core component of the Basel III reform package. Notable improvements in the new risk framework, which takes effect in 2019, include: - A revised boundary between the banking and trading books that will reduce scope for arbitrage; - A revised internal models approach with more coherent and comprehensive risk capture; - An enhanced model approval process and more prudent recognition of hedging and portfolio diversification; and - A revised standardised approach that serves as a credible fall-back and floor to the model-based approach, and facilitates more consistent and comparable reporting of market risk across banks and jurisdictions.

BIS - Guidance on the application of the Core principles for effective banking supervision to the regulation and supervision of institutions relevant to financial inclusion
This consultative document builds on past work by the Committee to elaborate additional guidance in the application of the Committee's Core principles for effective banking supervision to the supervision of financial institutions engaged in serving the financially unserved and underserved. This includes a report of the Range of practice in the regulation and supervision of institutions relevant to financial inclusion, and expands on Microfinance activities and the Core Principles for Effective Banking Supervision. The proposed Guidance identifies 19 of the total 29 Core Principles where additional guidance is needed, and both Essential Criteria and Additional Criteria which have specific relevance to the financial inclusion context. Deadline for comments: 31 March 2016

A Regulator Reflects on Lessons Learned from the Global Financial Crisis
An exclusive interview with David Wright, secretary general of IOSCO frankly reveals the challenges still facing the financial industry. (Regulation Asia)


SEC Announces 2016 Examination Priorities
New Areas of Focus Include Liquidity Controls, Public Pension Advisers, Product Promotion, Exchange-Traded Funds and Variable Annuities

SEC Seeks Public Comment on Transfer Agent Rules
The Securities and Exchange Commission voted to issue an advanced notice of proposed rulemaking (ANPR) for new requirements for transfer agents, together with a concept release requesting public comment on the Commission's broader review of transfer agent regulation. The Commission identifies in the ANPR certain areas in which it intends to propose specific rules or rule amendments, including registration and annual reporting requirements, safeguarding of funds and securities, antifraud requirements in connection with the issuance and transfer of restricted securities, and cybersecurity and information technology, among others.


European Commission - Single Resolution Mechanism to come into effect for the Banking Union
The Single Resolution Mechanism (SRM) will become fully operational on 1 January 2016. The SRM implements the EU-wide Bank Recovery and Resolution Directive (BRRD) in the euro area. The full resolution powers of the Single Resolution Board (SRB) will also apply as of 1 January 2016 (IP/14/2784).

The Single Resolution Board publishes the list of banks under its remit
In accordance with the Single Resolution Mechanism Regulation, the entities and groups which currently fall under the direct responsibility of the SRB are the following: (1) The entities and groups directly supervised by the European Central Bank. (2) Other cross-border groups.

European Parliament releases report on stocktaking and challenges of the EU Financial Services Regulation
The report outlines the impact and the way forward towards a more efficient and effective EU framework for Financial Regulation and a Capital Markets Union

ESMA consults on transaction reporting, reference data, record-keeping and clock synchronisation under MIFIR
The European Securities and Markets Authority (ESMA) has published a Consultation Paper (CP) on guidelines regarding the Markets in Financial Instruments Regulation (MiFIR) under which ESMA has to develop the implementing details.

ESMA publishes results of second market abuse directive peer review
The European Securities and Markets Authority (ESMA) published the results of its follow-up review of national competent authorities' (NCAs) supervisory regimes with regard to the Market Abuse Directive (MAD).

ESMA publishes MIFID II guidelines on cross-selling practices
The European Securities and Markets Authority (ESMA) has published its Guidelines on Cross-Selling Practices under MiFID II (guidelines) to ensure investors are treated fairly when an investment firm offers two or more financial products or services as part of a package.

ESMA consults on transaction reporting, reference data, record-keeping and clock synchronisation under MIFIR
The European Securities and Markets Authority (ESMA) published a Consultation Paper (CP) on guidelines regarding the Markets in Financial Instruments Regulation (MiFIR) under which ESMA has to develop the implementing details.The CP seeks stakeholders feedback on future guidance regarding: Transaction Reporting; Reference Data; Order Record Keeping; and Clock Synchronisation. The CP specifies individual scenarios applicable to a given transaction or order activity. Each of the scenarios is accompanied with the sample of XML ISO 20022 format to be used by firms to represent the values to be reported. The consultation is open for comment until 23 March 2016.

ESMA assesses regulators' compliance with market maker exemption under short-selling regulation
The European Securities and Markets Authority (ESMA) published the results of a targeted review it conducted among five national competent authorities under the Short-Selling Regulation.

ESMA to cooperate with Canadian and Swiss regulators on CCPS
The European Securities and Markets Authority (ESMA) have established three Memoranda of Understanding (MoUs) under the European Markets Infrastructure Regulation (EMIR). The MoUs establish cooperation arrangements, including the exchange of information, regarding Central Counterparties (CCPs) which are established and authorised or recognised in Canada or Switzerland, and which have applied for EU recognition under EMIR.

UK FCA - Consultation Paper - Consequential changes to the Senior Managers Regime
In the paper, the FCA sets out a number of technical rule changes to the Senior Managers & Certification Regime (SM&CR). These changes reflect the removal of the requirement on firms, as set out under section 64B(5) of the Financial Services and Markets Act 2000 (FSMA), to report known and suspected breaches of our Rules of Conduct to the FCA. Deadline: 05 February 2016.

UK FCA - Policy Development Update - Issue 29
The Policy Development Update provides information on: publications issued since the last edition; information about recent Handbook-related and other developments; other publications - consumer publications, guidance consultations and finalised guidance; and an updated timetable for forthcoming publications.

Lawmakers to grill UK watchdog over scrapping of banking culture review
The heads of Britain's Financial Conduct Authority will be asked later this month by a panel of lawmakers to explain their "curious decision" to ditch a review into banking culture. The review was part of the FCA's 2015 business plan but last month it was shelved, sparking concern among some lawmakers that the watchdog was under pressure from the government to soften its approach to banks. Improving the way they operate is seen as core to restoring trust in banks that have been fined billions of dollars over the past four years for trying to rig interest rate benchmarks and foreign exchange markets. The FCA has said that engaging with banks individually was a better way of improving conduct. (Reuters)


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