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ASIFMA Asia Regulatory Review

16 - 23 FebruAry 2016 | Issue 287


ASIFMA's 6th China Capital Markets Conference to be held on Wednesday 27 April 2016 in Singapore
ASIFMA's signature conference provides an industry-wide and timely platform for global and regional policymakers, senior regulators, asset managers, corporate treasurers, infrastructure and green financing firms, fintech firms and China-watchers to discuss the development of China's capital markets as the country's story has grown beyond offshore RMB and RMB internationalization. Register now given seats are limited!



PBC Promulgates Regulatory Measures for Counter Business in China's Interbank Bond Market
The People's Bank of China (PBC) promulgated Administrative Measures for Counter Business in China's Interbank Bond Market on February 14, specifying all types of bonds and transactions in which qualified investors can invest through counter business. This measure is to promote the development of bond market and expand the proportion of direct financing, the PBC says. (NAFMII Newsletter)

Liu Shiyu replaces Xiao Gang as head of China's securities watchdog
Liu Shiyu was appointed as Party leader and chairman of the China Securities Regulatory Commission(CSRC), according to decisions made by the Communist Party of China Central Committee and the State Council. Xiao Gang, former head of the CSRC, was removed from his post as the chairman as well as the Party leader of the commission. (Xinhua)


HKMA - Basel Committee on Banking Supervision revised the "General guide to account opening"
The Basel Committee on Banking Supervision ("BCBS") issued the revised "General guide to account opening" 1 ("the revised Guide") as an annex to the paper on "Sound management of risks related to money laundering and financing of terrorism", which was published in January 2014 and the subject of our earlier circular dated 10 February 2014. The HKMA is undertaking a review of local legal and regulatory anti-money laundering and counter-terrorist financing ("AML/CFT") requirements for authorized institutions ("AIs") in order to implement the revised international standards and will also have regard to this paper during that review. In the meantime, AIs are encouraged to review the paper in the context of, and assess the implications for, enhancing their AML/CFT control processes.

HKMA - Circular Issued by the Securities and Futures Commission ("SFC") on Protecting Client Assets Against Internal Misconduct
HKMA informs the attached circular issued by the SFC to licensed corporations ("LCs") licensed for dealing in securities on protecting client assets against internal misconduct ("The Circular"). In the course of its supervisory work, the SFC observed that some LCs have weak internal controls and lax management supervision that render those LCs susceptible to the threat of internal misconduct.

Second SFC Regulatory Forum focuses on market connectivity
Forum participants shared perspectives and insights on current regulatory trends in light of recent events in global capital markets. Panels focused on the implications of greater interaction with and global significance of Mainland markets, leading risks faced by financial firms, the effect of enforcement actions on the financial industry and the need to prioritise investor protection as the means to access financial products relies increasingly on technology.

SFC issues third-quarter report
Highlights this quarter included a revamp of the SFC's authorization process for new public investment fund applications which aims to reduce overall processing time.

HKEx to launch gold futures contracts denominated in yuan
HKEx chief executive Charles Li Xiaojia said at a regulatory forum that the new product will be different from the US dollar-denominated version, which was discontinued in March after languishing in thin trade for a year following a rocky debut in 2008 during the height of the financial crisis. Li said the yuan gold futures will add to HKEx's growing list of yuan-related offerings. "We have a RMB futures against the US dollar which is very popular. We will launch other yuan futures against other currencies such the yen, the euro, the Malaysian dollar and others," Li said. (SCMP)


SGX consults on changes to derivatives rules and contract specifications
The amendments are related to the new derivatives trading and clearing systems which SGX is investing in. The proposed amendments and enhancements consulted on include: - The use of the previous day's price limits during the initial part of the T+1 session until the daily settlement price (DSP) for the preceding T session is available. - Enhanced functionalities including the ability for trading members to set pre-trade risk controls, and a tool to prevent self-trading where both sides of the trade belong to the same party. - Revised price limits for SGX CNX Nifty Index futures and SGX MSCI India Index futures. The consultation paper is open for comments till 10 March 2016.

ASEAN+3 Macroeconomic Research Office - Singapore Hosts First ASEAN+3 International Organisation
The ASEAN+3 Macroeconomic Research Office ("AMRO") held its opening ceremony in Singapore to commemorate its establishment as an international organisation. AMRO was formally accorded the legal status of an international organisation on 9 February 2016, when the agreement signed by ASEAN+3 member states to establish AMRO entered into force. AMRO is the first international organisation established by the ASEAN+3 member states and is headquartered in Singapore. It has close to 40 staff from ASEAN+3 countries.


The Bank of Japan - Liquidity Indicators in the JGB Markets

The report provides a summary of Liquidity Indicators in the JGB Markets which includes the JGB futures markets, JGB Cash Market, and the SC Repo Market.

The Bank of Japan - The Bank's Semi-annual Report on Currency and Monetary Control
Statement before the Committee on Financial Affairs, House of Councillors. By Haruhiko Kuroda, Governor of the Bank of Japan.

JFSA - Corporate Boards Seeking Sustainable Corporate Growth and Increased Corporate Value over the Mid- to Long-Term Statement
The Council of Experts Concerning the Follow-up of Japan's Stewardship Code and Japan's Corporate Governance Code Opinion Statement No. 2


RBI - Summary of the Electronic Consultation with the Technical Advisory Committee on Monetary Policy: January 2016
Some of the issues discussed by members included concerns on global developments, domestic growth, inflation target, concerns in capital outflows and other issues.

SEBI - Shri U K Sinha takes charge as Chairman, SEBI
On his reappointment as Chairman, SEBI, Shri U. K. Sinha has assumed the charge on February 18, 2016.

Sebi steps up vigil for Mutual Fund's exposure to distressed corp bonds
Amid growing concerns over rising bad debt levels of corporates, market regulator Sebi has stepped up its vigil for mutual funds' exposure to distressed bonds, especially those downgraded by rating agencies. (Financial Express)


RBA - The Evolving Risk Environment
Speech by Malcolm Edey, Assistant Governor (Financial System)

RBA - The Ongoing Evolution of the Australian Payments System
Speech by Tony Richards, Head of Payments Policy Department

RBA - Interest Rate Benchmarks
Speech by Guy Debelle, Assistant Governor (Financial Markets)

RBA - Payments System Board Update: February 2016 Meeting
A number of issues were discussed which included the Review of Card Payments Regulation, 2014/15 Assessment of Chicago Mercantile Exchange Inc (CME) and ASX recovery planning.


Ministry of Strategy & Finance - Government Unveils New Round of Investment Boosting Measures
The government unveiled the new round of measures to boost the private sector investment following the 9th Presidential Meeting to Promote Trade and Investment held on February 17. The new round of measures, drawn up to encourage investment in promising areas and subsequently stimulate job creation, focus on: - providing investment opportunities in promising projects, - promoting investment in new growth engines, such as services and the farming and fishery sector, - attracting investment in the Saemanguem area.

BOK chief says more uncertainty in global financial market
South Korea's central bank head forecast additional difficulties for the economy, saying uncertainties in the global financial market were increasing more than ever before. "Since the beginning of the year, uncertainties in the global financial market have increased due to the instability in the Chinese market, additional drops in global oil prices and the introduction of a negative interest rate by the Bank of Japan," Bank of Korea Gov. Lee Ju-yeol said in a meeting with top financial officials and bankers. He also said North Korea-related geopolitical risks have further heightened such uncertainties. (Korea Herald)


BI, OJK, Supreme Court to work together

Bank Indonesia (BI) and the Financial Services Authority (OJK) will provide workshops and hold discussions to improve the knowledge of justices at the Supreme Court about monetary policy and financial services. Under a memorandum of understanding signed in Jakarta, the three institutions will hold routine training sessions and discussions between their officials and justices across the country on various monetary and financial-services issues. (Jakarta Post)

Financial authority plans new rule to regulate interest rates
Growing calls for lower lending rates nationwide have pushed the Financial Services Authority (OJK) to prepare for a new policy to regulate interest rates in the banking industry, a senior official has said. OJK deputy commissioner for banking supervision Irwan Lubis said that the new policy would be issued soon, but declined to mention details. (Jakarta Post)


IOSCO plays a key role in responding to global securities markets' challenges
The Board of the International Organization of Securities Commissions (IOSCO) met for two days in Madrid to discuss and respond to the many ongoing and emerging challenges facing global securities markets. 'The meeting again underscored IOSCO's role as the key reference point for global securities regulation, through our work firstly in identifying and responding to emerging risks, secondly in assisting our members in building capacity and co-operating to develop, supervise and enforce laws and thirdly acting as an advocate for the collective interest of our members,' said Board Chairman Greg Medcraft.

FATF - Outcomes of the Plenary meeting of the FATF, Paris, 17-19 February 2016
The updates include the: the approval of a Consolidated FATF Strategy on Combating Terrorist Financing, focus on effective exchange of information, considering whether changes are necessary to the FATF Standards for combatting terrorist financing, assessing and improving implementation of counter terrorist financing measures, and the future work on combatting terrorist financing.

FATF - Improving Global AML/CFT Compliance: on-going process
As part of its on-going review of compliance with the AML/CFT standards, the FATF has to date identified the following jurisdictions which have strategic AML/CFT deficiencies for which they have developed an action plan with the FATF. While the situations differ among each jurisdiction, each jurisdiction has provided a written high-level political commitment to address the identified deficiencies.

BIS - Booms and banking crises
By Frederic Boissay, Fabrice Collard and Frank Smets.

BIS - Big data: the hunt for timely insights and decision certainty
By Per Nymand-Andersen.

IMF Executive Board Selects Christine Lagarde to Serve a Second Term as Managing Director
The Executive Board of the International Monetary Fund (IMF) selected Christine Lagarde to serve as IMF Managing Director for a second five-year term starting on July 5, 2016. The Board's decision was taken by consensus.


CFTC Staff Extends Request for Comment Period on Draft Technical Specifications for Certain Swap Data Elements
The request for comment seeks public input on 80 enumerated questions addressing 120 data elements for several swap data reporting topics including counterparty-related elements, price, clearing, product, periodic reporting, orders, package transactions, options, additional fixed payments, notional amount, events, rates and foreign exchange. The draft technical specifications include certain swap data elements that are reportable under Part 45 and related provisions of the CFTC's regulations, as well as certain swap data elements that are not currently reportable under the CFTC's regulations, but which have been identified by staff as data elements that - when reported in a consistent and clear manner - may assist the CFTC in fulfilling its regulatory mandates, including systemic risk mitigation, market monitoring and market abuse prevention. The comment period will be extended to March 7, 2016.

CFTC's Division of Market Oversight Provides Time-Limited No-Action Relief for End Users from the Form TO Filing Requirement
Under CFTC Regulation 32.3(b)(2), counterparties to trade options that are not required to be reported to a swap data repository (SDR) must submit a Form TO filing by March 1 following the end of any calendar year during which they entered into one or more unreported trade options.

CFTC Staff to Host a Public Roundtable March 3 Regarding the Residual Interest Deadline
The roundtable discussion will be open to the public with seating on a first-come, first-served basis.

US Treasury - Sheets Op-ed: The Importance of China's Transition to Smarter Growth
In an op-ed published on Medium, Treasury Under Secretary for International Affairs Nathan Sheets underscored the importance of China's transition to a consumption-led economy, noting that if China implements the reforms that it has committed to, it has the necessary tools to support domestic demand and succeed in this economic transition.


European Commission - A new settlement for the UK in the EU
Following its first session in which European Union government leaders agreed to accelerate action on the refugee crisis, the European Council agreed a new settlement for the United Kingdom in the European Union.

EBA publishes Guidelines on cooperation agreements between deposit guarantee schemes
The European Banking Authority (EBA) published its final Guidelines on cooperation agreements between deposit guarantee schemes (DGSs). These Guidelines include a multilateral cooperation framework agreement and minimum prescriptions to promote the rapid and consistent conclusion of cooperation agreements between DGSs, as provided under the new Deposit Guarantee Schemes Directive (DGSD).

ESMA adds list of clearing members to its public register on EMIR
The European Securities and Markets Authority (ESMA) published an update of its Public Register for the Clearing Obligation.

ESMA publishes translations of its transparency directive standard form for home member state disclosure
The European Securities and Markets Authority (ESMA) published translations of its standard form for the disclosure of home Member State by issuers under the Transparency Directive (TD).

ESMA updates EMIR Q&A
The European Securities and Markets Authority (ESMA) issued an update of its Question and Answers (Q&As) regarding the implementation of the European Market Infrastructure Regulation (EMIR).

ESMA issues follow-up review on money market fund guidelines
The European Securities and Markets Authority (ESMA) issued a follow-up peer review into the compliance of national competent authorities (NCAs) with guidelines regarding money market funds.

FCA - Regulation round-up February 2016
The FCA Regulation round-up is the FCA monthly email to all regulated firms, updating participants on the latest news that affects sectors.

PRA's approach to identifying other systemically important institutions (O-SIIs)
The Prudential Regulation Authority (PRA) policy statement (PS) provides feedback to responses to Consultation Paper (CP) 39/15, 'The PRA's approach to identifying other systemically important institutions (O-SIIs)'.The PS also contains a statement of policy on the PRA's approach to identifying O-SIIs and the PRA's 2015 list of UK firms designated as O-SIIs. The consultation set out the PRA's proposed approach to identifying and designating as O-SIIs those firms whose distress or failure would have a systemic impact on the UK or the EU economy or financial system due to size, importance (including substitutability or financial system infrastructure), complexity, cross-border activity, and interconnectedness.


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