Circular in relation to the clearing and record keeping rules for the OTC derivatives regime – changes to the list of persons designated as financial services providers
SFC,22 Nov 2019
The revised list of persons designated as financial services providers (FSPs) for the purposes of the Securities and Futures (OTC Derivative Transactions—Clearing and Record Keeping Obligations and Designation of Central Counterparties) Rules (Clearing Rules) is gazetted today, and becomes effective on 1 January 2020.
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Feedback from Recent Reviews on Selling of Investment Funds
HKMA,22 Nov 2019
Further to the circular issued by the Hong Kong Monetary Authority (“HKMA”) dated 8 April 2016 on “Feedback from recent reviews of the selling of investment products” and another circular dated 21 December 2018 on “Misconduct Risks in Selling of Investment Funds”, the HKMA has conducted some thematic reviews of relevant controls and practices of RIs in respect of selling of investment funds. Some control deficiencies, malpractices and good practices have been noted from the reviews. This circular provides further guidance (Annex) to facilitate RIs to prevent, detect and mitigate misconduct risks in the selling of investment funds.
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Encl.: Key Observations and Good Practices Noted in Recent Reviews on Selling of Investment Funds by RIs
Virtual Assets and Virtual Asset Service Providers
CIMA,22 Nov 2019
The Cayman Islands Monetary Authority (“the Authority”) is reminding the public that the provision of virtual asset services, pursuant to Schedule 6 of the Proceeds of Crime Law (2019 Revision),as amended (“POCL”), is an activity considered to be “relevant financial business” for the purposes of the Anti-Money Laundering Regulations (2018 Revision) (“AMLRs”). Virtual asset service providers (VASPs) are therefore required to take preventative measures under the AMLRs, including all customer due diligence measures.
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Singapore’s Financial Sector Wraps Up Two-day Exercise to Strengthen Business and Operational Resilience against Cyber Threats
MAS,22 Nov 2019
The Monetary Authority of Singapore (MAS) and the Association of Banks in Singapore (ABS) jointly conducted a cyber-themed business continuity exercise to strengthen the financial sector’s resilience to cyber-attacks and operational disruptions. Codenamed Exercise Raffles, the sixth edition of the exercise was conducted over two days ending yesterday.
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CFTC Orders BGC Financial, L.P. to Pay $3 Million for Supervision, Reporting, and Recordkeeping Violations
CFTC,22 Nov 2019
The U.S. Commodity Futures Trading Commission today issued an order filing and simultaneously settling charges against BGC Financial, L.P., a futures industry voice broker and registered futures commission merchant (FCM), for numerous supervision, reporting, and recordkeeping violations spanning over five years.
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Former Director Convicted of Furnishing False Statement to the SGX-DT
MAS,25 Nov 2019
Mr Joseph Chai Ming Leong (Mr Chai) was today convicted and sentenced to 4 weeks’ imprisonment for furnishing a false statement to Singapore Exchange Derivatives Trading Limited (SGX-DT). His conviction was a result of a joint investigation conducted by the Monetary Authority of Singapore and the Commercial Affairs Department of the Singapore Police Force.
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SEC Proposes to Modernize Regulation of the Use of Derivatives by Registered Funds and Business Development Companies
SEC,25 Nov 2019
The Securities and Exchange Commission has voted to propose a new rule designed to enhance the regulation of the use of derivatives by registered investment companies, including mutual funds, exchange-traded funds (ETFs) and closed-end funds, as well as business development companies. The proposed rule would provide an updated and more comprehensive approach to the regulation of funds’ derivatives use.
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CFTC Approves Amendments Simplifying Rules for Asset Managers at November 25 Open Meeting
CFTC,25 Nov 2019
Today, at an open meeting, the U.S. Commodity Futures Trading Commission approved amendments to Part 4 that will harmonize CFTC and SEC regulations for asset managers. On a 4-1 vote, the Commission approved amendments to Rules 4.7, 4.13, and 4.14 (Codification of Relief for Family Offices and Relief Related to the JOBS Act), that will exempt certain commodity pool operators (CPOs) meeting the definition of “Family Office” from certain registration requirements.
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SEC Revokes Registration of Adviser Engaged in $60 Million Fraud
SEC,26 Nov 2019
The Securities and Exchange Commission today revoked the registration of New York-based investment adviser International Investment Group LLC (IIG), which the Commission recently charged with securities fraud for hiding losses in its flagship hedge fund and selling at least $60 million in fake loan assets to clients.
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CFTC Orders Goldman Sachs to Pay $1 Million for Recordkeeping Violations
CFTC,26 Nov 2019
The U.S. Commodity Futures Trading Commission today issued an order filing and simultaneously settling charges against Goldman Sachs & Co. LLC for failing to make and keep certain audio recordings as required under CFTC regulations for swap dealers.
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Westpac CEO resigns amid money-laundering scandal
Business Times,27 Nov 2019
WESTPAC Banking Corp said on Tuesday chief executive Brian Hartzer will step down and chairman Lindsay Maxsted will bring forward his retirement, as the country’s biggest money-laundering scandal rocks Australia’s No 2 retail bank. Financial crime regulator AUSTRAC last week accused Westpac of 23 million breaches of anti-money laundering laws, including allowing payments between known child exploiters, triggering calls for Mr Hartzer’s resignation.
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Response to “Why are companies demanding employee’s credit reports?” – The Straits Times, 21 November 2019
MAS,27 Nov 2019
MAS refer to Mr Vincent Khoo’s letter (“Why are companies demanding employee’s credit reports?”, 21 November 2019). It is entirely appropriate for financial institutions (FIs) to assure themselves that their employees and representatives providing financial services to customers are in good financial standing. MAS requires FIs to conduct due diligence checks to ensure that their employees and representatives who serve customers are fit and proper. Financial soundness is one of the fit and proper criteria, along with honesty, integrity and reputation, as well as competency and capability. Regulators in other jurisdictions such as the United Kingdom and Hong Kong apply similar criteria that include financial soundness.
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ESMA publishes responses to consultation on aligning MIFIR to the changes introduced by EMIR REFIT
ESMA,27 Nov 2019
The European Securities and Markets Authority (ESMA) has today published the responses it received to its consultation on aligning the Markets in Financial Instruments Regulation (MiFIR) requirements to the changes introduced by the revision of the European Market Infrastructure Regulation (EMIR Refit).
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Interest Rate Risk in the Banking Book: Frequently Asked Questions
HKMA,28 Nov 2019
The HKMA has received a few more questions related to the local implementation of standards on interest rate risk in the banking book (IRRBB) since our last update to the list of frequently asked questions (FAQs) on 30 April 2019.
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HKEX signs MOU with Shanghai Shipping Exchange
HKEX,28 Nov 2019
Hong Kong Exchanges and Clearing Limited (HKEX) is today (Thursday) pleased to announce it has signed a Memorandum of Understanding (MOU) with the Shanghai Shipping Exchange in Shanghai for mutual cooperation in financial and shipping markets, and to promote the international development of Mainland China’s shipping indices.
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Update: AML/CFT Reporting Forms for MFAs
CIMA,28 Nov 2019
The Authority requires that the form, AML/CFT Inherent Risks – Investments – AIR-157- 26, be completed and filed by each licensed Mutual Fund Administrator. The form AML/CFT Risk Controls – Investments – ARC-158-26 is to be completed by those Mutual Fund Administrators that only holds a Mutual Funds Administrators Licence and has no other licence pursuant to any of the other regulatory laws. These filings are required pursuant to regulation 53(A) of the Anti-Money Laundering Regulations, 2019.
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Form 6 – Omnibus Statement of Trust Accounts under Regulation 19(1)
MAS,28 Nov 2019
Form for licenced trust companies and exempt persons providing trust services to provide information on assets under trusteeship, within 60 days from the end of the calendar year.
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China comes down hard on cryptocurrencies as it seeks to rein in market prone to excesses
SCMP,28 Nov 2019
China’s latest cryptocurrency-crackdown is already claiming its first casualties. At least five local exchanges have halted operations or announced they will no longer serve domestic users this month, after regulators issued a series of warnings and notices as part of a clean-up of digital currency trading. China’s stepping up scrutiny of its massive cryptocurrency industry just weeks after President Xi Jinping ignited a market frenzy by declaring Beijing’s support for blockchain technology. Financial watchdogs including the Chinese central bank have in past weeks ordered cryptocurrency firms to shutter and warned investors to be wary of digital currencies, seeking to rein in a market prone to excesses.
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In nod to market, SGX seeks to scrap minimum trading price rule
Business Times,29 Nov 2019
THE Singapore Exchange Regulation (SGX RegCo) is formally looking at scrapping the minimum trading price (MTP) rule, confirming a report by The Business Times earlier this year. The move, coming more than three years after the rule was implemented, would affect the status of about 100 companies now languishing in the SGX watch list for falling short of the MTP of S$0.20 a share. Under the rules adopted in 2016 and then modified and effected the following year, a mainboard-listed company must maintain a six-month volume-weighted average share price of at least 20 Singapore cents, and a six-month average daily market capitalisation of at least S$40 million.
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