On 3 November 2016, ASIC and Ontario Securities Commission (OSC) signed an agreement to support innovative businesses. For further detail, please click here
On 3 November 2016, APRA released updated governance requirements for APRA-regulated superannuation trustees (RSE licensees) with a final revised prudential standard and prudential practice guide on governance. The amendments to the prudential standard include requiring RSE licensees to have in place a governance framework which sets out policies and procedures to support effective governance practices, and requirements for these policies to address the nomination, appointment and removal of directors, board renewal, director tenure limits and board size. For further details, please click here
On 10 November 2016, ASIC issued a consultation on 2 ‘sunsetting’ class orders about internet offers, hawking and PDS obligations. The first class order gives relief for foreign offerors of securities to persons outside Australia, where the offer or advertisement is accessible incidentally to Australians. The second one gives technical relief so that securities and interests in managed investment schemes are not subject to two differing hawking prohibitions. For further details, please click here
On 10 November 2016, APRA released the final revised Prudential Standard APS 120 Securitisation which is accompanied by the Response to Submissions Paper Revisions to the prudential framework for securitisation November 2016. APRA also released a draft revised Prudential Practice Guide APG 120 Securitisation. For further details, please click here
On 17 November 2016, ASIC released a consultation to remake three class orders relating to time-sharing schemes, which are due to expire as at 1 April 2017 or 1 October 2017. The consultation seeks feedback on whether amendments are required to current requirements to improve consumer protections, including in relation to cooling-off, disclosure and sales practices. For further details please click here
On 17 November 2016, ASIC remade 3 class orders relating to specific financial services disclosure requirements that are due to expire in 2017. The respective class orders are Class Order – Product Disclosure Statements: Top-up relief for managed investment schemes, Class Order – Updated information in Product Disclosure Statements, and Class Order – Further relief for joint Product Disclosure Statements. For further details, please click here
On 22 November 2016, ASIC extended its relief for foreign financial service providers (FFSPs) from the requirement to hold an AFS licence when providing financial services to Australian wholesale clients by Luxembourg fund managers. The relief applies to Luxembourg fund managers who are either:
- Management companies, which can manage undertakings for collective investment in transferable securities relating to the undertaking for collective investment of Luxembourg;
- Investment companies established under Part I of the 2010 Law that have designated themselves as “self-managed”
For further details, please click here
On 23 November 2016, ASIC approved the FPA Professional Ongoing Fees Code and provided relief for members of the Financial Planning Association of Australia (FPA) who subscribe to the FPA Professional Ongoing Fees Code from compliance with the opt-in requirement. Advisers who subscribe to the FPA Code get relief if they meet certain requirements when entering into ongoing fee arrangements, delivering services under an ongoing fee arrangement and renewing the arrangement. For further details, please click here
On 23 November 2016, ASIC issued a consultation on repealing ASIC class orders about holding client assets. For further details, please click here
On 24 November 2016, APRA released for consultation draft guidance on successor fund transfers and wind-ups for APRA-regulated superannuation trustees (RSE licensees). The draft also includes new guidance in the key areas of ‘equivalent rights’ in a successor fund transfer, transfers between MySuper products and considerations for the operational risk financial requirement in undertaking a successor fund transfer. For further details, please click here
On 28 November 2016, ASIC launched new digital toolkit to help Australians navigate financial advice. ASIC’s MoneySmart Financial Advice Toolkit is a free educational tool that breaks down the complexity around the financial advice process. It will assist consumers with their research and help them evaluate the financial advice they receive. For further details, please click here
On 29 November 2016, ASIC extended the transition period for trustees of superannuation funds and responsible entities of managed funds and other managed investment schemes to comply with updated fee and cost disclosure requirements in relation to product disclosure statements. The transition period will now end by 30 September 2017 for issuers that notify ASIC in writing by 31 January 2017 that they intend to take advantage of this extension in relation to a PDS and Issuers that do not want to take of advantage of this extension will have to comply with the updated requirements by 1 February 2017. For further details, please click here
Enforcement
On 1 November 2016, ASIC suspended the AFS licence of Rural & General Insurance Broking Pty Limited for failing to lodge financial statements, auditor’s opinions for the financial years ending 30 June 2014 and 30 June 2015. This is in breach of both its legal obligations under the Corporations Act and its licence conditions. For further detail, please click here
On 3 November 2016, ASIC banned a life insurance financial adviser, Mr Christopher Young, from providing financial services for a period of five years for failing to act in his clients’ best interests when providing advice and comply with several financial services laws. For further details, please click here
On 7 November 2016, ASIC permanently banned Mr George Karakatsanis, from providing any financial services after it found that he engaged in conduct that was misleading and deceptive whilst recommending clients invest in unsecured fixed interest notes. For further details, please click here
On 15 November 2016, ASIC permanently banned former insurance broker, Mr Sergio Amaranti, from the financial services industry for engaging in misleading and deceptive conduct and dishonest conduct in relation to client funds. For further details, please click here
On 15 November 2016, the Court sentenced former financial adviser, Mr Darren John Wise to 7 years imprisonment for forgery and misuse of client assets. Mr. Wise created six applications for margin loans on which he forged eight of his clients’ signatures and obtained a total of AUS$1,070,700. For further details, click here
On 17 November 2016, ASIC banned Stephen Michael Beckton, a financial adviser and former authorised representative of Sentinel Private Wealth Pty Ltd from providing financial services for five years for not complying with financial services laws on a number of occasions. An ASIC review of Mr Beckton’s advice found that he had recommended clients change superannuation and insurance products in circumstances where there was little benefit, but significant cost, to the client in changing. For further detail, please click here
On 17 November 2016, the Court convicted Mr. Fei Yu after pleading guilty to insider trading. Mr Yu was released on recognizance subject to the condition that he be of good behaviour for a period of 12 months and pay a pecuniary penalty in the amount of AUS$10,000. In addition, Mr Yu undertook to pay the net profits from his offending ($17,527) to a charitable foundation and he will also be automatically disqualified from managing a corporation for 5 years. For further detail, please click here
On 18 November 2016, ASIC banned former AMP Financial Planning representative, Mr James Edward McCarthy, from providing financial services for eight years. ASIC found that Mr McCarthy created and backdated Statements of Advice and Authority to Proceed documents and forged client signatures for the purpose of complying with an internal AMP Financial Planning audit in March 2015. For further details, please click here
On 28 November 2016, ASIC banned former financial planner, Mr Anthony Bishop, for eight years for involving in the provision of inappropriate advice to clients and also involving in the failure to provide one client with a written statement of advice. For further details, please click here
On 29 November 2016, ASIC suspended the AFS licence of Group Underwriters & Managers Pty Ltd for 3 months for failing to lodge financial statements, auditor reports and auditor opinions for a period of three years. For further details, please click here
On 30 November 2016, ASIC permanently banned Christopher John Griggs from providing financial services after found that Mr Griggs prepared and submitted applications for insurance premium loan funding to Elantis Premium Funding Limited without the authority or knowledge of the named applicants and forged the signatures of the alleged applicants. For further details, please click here
On 29 November 2016, Khmer Times reported that cyber security in the financial sector has become a major topic for institutions and individuals in Cambodia and the government is drafting an anti-cybercrime law and the National Bank of Cambodia, has increased minimum reserve requirements. For further detail, please click here
Enforcement
A media search did not find any relevant articles for Cambodia during the month of November
On 1 November 2016, the CSRC and the SFC organised a Cross-border Regulatory Cooperation Seminar in Shanghai in which the CSRC announced comprehensive enhancements to internal control and risk management compliance to serve the real economy and China’s “One belt, One road” strategy and better contribute to the mutual opening of the capital markets. For further details, please click here (Chinese only)
On 1 November 2016, the AMAC issued a notice regarding the annual inspection of employees in the fund industry and the notice requires public fund managers, fund custodians, fund sales agencies and employees of other member institutions and those practitioners who have registered on the practitioner management system and obtained a qualification certificate to participate in the 2016 annual inspection. Those employees who continue to meet the requirements of registered practitioners and completed 30 hours of CPT from 1 January 2015 to 20 February 2017, are deemed to pass the annual inspection. The registered senior managers of private equity funds and other employees are not required to participate in this annual inspection, but they are required to complete 15 hours of CPT to maintain their fund practitioners’ qualification. For further detail, please click here (Chinese only)
On 11 November 2016, the SHSE announced the CSRC’s approval of the Constitution of Shanghai Stock Exchange with immediate effect. An application for the SHSE membership requires the applicant to: (i) Be a securities company approved by the CSRC with the status of a legal person, (ii) Have a good reputation and operating performance, (iii) Organizational structures and business personnel to meet the requirements stipulated by the CSRC and internal management systems, and risk management systems in line with the requirements for the SHSE, (iv) Abide by the rules and regulations of the SHSE and pay the prescribed membership fee and (v) Abide by other conditions as required by the SHSE. For further details, please click here (Chinese only)
On 14 November 2016, the AMAC issued Guidelines on Contents and Formats of Information Disclosure for Private Equity Investment Funds (II) — Applicable to Private Equity (Venture Capital Inclusive) Investment Funds, with immediate effect. The Guidelines require private equity managers to prepare information disclosure reports of their private equity investment funds, including their venture capital investment. The Guidelines also require private equity managers to ensure that there is no false representations, misleading statements or material omissions in the report and that they will be held fully responsible for the truthfulness, accuracy and completeness of the contents of the report. The semi-annual and annual information disclosure should be completed by the end of September 2016 and June 2017 respectively. For further details, please click here (Chinese only)
On 15 November 2016, the AMAC launched a public consultation on the Administrative Measures for Private Investment Fund Services until 25 December 2016. The consultation proposes to introduce a clear separation between custody and the fund service providers. Unless the custodian can separate its custody function from fund service functions and appropriately identify, manage and monitor potential conflicts of interest and make disclosure to investors, the custodian cannot act as both a custodian and fund service provider at the same time. For further details, please click here (Chinese only)
On 18 November 2016, the AMAC issued Guidelines on the Stress Testing for Publicly Offered Fund Management Companies (for Trial Implementation), with immediate effect. The Guidelines require fund managers of public funds to carry out regular comprehensive stress testing on a quarterly basis. The stress test should be targeted at different types of instruments including equity, bonds, currency, QDII and special products. For further details, please click here (Chinese only)
On 23 November 2016, the CSRC signed a MoU with the IMF for medium and long-term technical assistance. The MoU will last for five years and will focus on areas such as regulation and development of capital markets, presentation of systematic system and communication with stakeholders. For further details, please click here (Chinese only)
On 23 November 2016, the AMAC published FAQs which explain requirements for the legal representatives, compliance/risk control managers and other senior management of private fund managers. According to the FAQs, such fund managers and related personnel are not allowed to work part-time in non-affiliated private fund institutions and If they work part-time in an affiliated private fund institution, the AMAC may require them to clarify the reasonableness, competence and fair treatment to the affiliated institutions. When senior management personnel of the firm changes their employers for more than 2 times within one year the AMAC will focus on the reason for the change and their integrity, Senior management personnel of private funds should conclude an employment contract with the employer. The employment contracts of legal representatives, compliance/risk control officers and other senior executives should be provided when applying for an application for a private fund manager and applying for changes in senior management personnel. For further details, please click here (Chinese only)
On 24 November 2016, the CIRC launched a public consultation on Insurance Assessor Regulatory Requirements, which is open until 28 December 2016. The consultation proposes that an insurance assessor shall adopt either a partnership or a corporate structure and shall employ insurance assessors to carry out insurance assessment business. If the organisation form is a partnership, there should be more than 2 public appraisers and more than two-thirds of its partners should have more than three years of experience and have not been suspended from practicing within the last three years. If the organisation form is company, there should be more than 8 public appraisers and more than 2 shareholders, of which more than two-thirds of the shareholders should have more than three years of employment experience and have not been suspended from practising within the last three years. If there are only two partners or shareholders, the two partners or shareholders should be public assessors with more than 3 years of experience who have not been suspended from practising within the last three years. For further details, please click here (Chinese only)
On 24 November 2016, the CIRC launched a public consultation on Insurance Assessor Regulatory Requirements. Under the proposal, an insurance broker engaging in the business of insurance brokerage business within the territory of the PRC shall obtain a license for insurance brokerage business in accordance with the conditions prescribed by the CIRC. Except as otherwise provided by the CIRC, an insurance broker shall adopt either a limited liability company or a joint stock limited company as the form of organisation. An entity or individual shall not become a shareholder of an insurance brokerage company in any of the following circumstances:
- Those who have received significant administrative penalties or penalties in the recent three years;
- Being investigated by relevant authorities for suspected major criminal offences;
- In the recent 3 years, serious acts of dishonesty have been dealt with in the People’s Courts, commercial banks, self-regulatory organizations and other government departments;
- If he has not been permitted to invest in enterprises in accordance with any law or administrative regulations; or
- Other circumstances that the CIRC has determined means the person is not suitable to be a shareholder of an insurance brokerage company according to the principle of prudent supervision.
For further details, please click here (Chinese only)
On 25 November 2016, the CSRC approved the Guidelines on Administration of the Structured Fund Business of the SSE and the SZSE that will be effective from 1 May 2017. The guidelines specify that the investor eligibility threshold for trading in the secondary structured fund market is RMB 300,000 in securities assets with enhanced warnings of risks for structured funds. Investors will also have to enter into a risk disclosure statement. For further details, please click here (Chinese only)
On 25 November 2016, the CSRC and the SFC announced the Shenzhen Hong Kong Stock Connect which will commence from 5 December 2016 onwards. For further details, please click here (Chinese only)
On 27 November 2016, the CSDC issued a Circular on Making Effective Preparation for Launching the Shenzhen-Hong Kong Stock Connect Business. The circular requires RMB 200,000 clearing margins to be provided by clearing participants via its clearing margin account for proprietary trading of A-shares. Where the clearing participant is engaged in Hong Kong Stock Connect Business, at least RMB 400,000 should be in the clearing margin account for proprietary trading. The margin rate applicable to the risk control funds and margin multiplier for Hong Kong Stock Connect Business are temporarily set at 22% and 1 respectively. For further details, please click here (Chinese only)
On 28 November 2016, the CBRC issued the Guiding Opinions on the Legal Counsel Work of Banking Financial Institutions. The guiding opinion requires persons who intend to act as legal advisers in a banking institution must have legal professional qualifications. However, those who are already serving as legal advisers in the banking institutions without any legal qualifications can continue to perform their duties as legal advisers. The general counsel of a banking institution must:
- Be familiar with national laws, administrative regulations and supervision rules;
- Be familiar with the system and process of legal risk management of banking institutions;
- Be familiar with the operation and management of banking institutions; and
- Have a bachelor degree or above or passed the national judicial examination, and have worked in the legal department in the financial industry for more than 6 years with legal work experience and competency.
For further details, please click here (Chinese only)
Enforcement
On 18 November 2016, the CSRC started its first enforcement action on cross-border market manipulation of the Shanghai-Hong Kong Stock Connect. The fraudsters were a group of people who manipulated the markets in Hong Kong and the PRC by opening securities accounts in the two jurisdictions and placing artificial trading orders to mislead other investors in the two jurisdictions, making illegal profits of close to RMB 300 million. For further details, please click here (Chinese only)
On 25 November 2016, the CSRC imposed administrative penalties against 3 network companies for providing securities brokerage software, with functions such as account opening, accepting orders, querying securities transaction information, securities and funds trading settlement, to entities and individuals without a securities company license, which constitutes illegal operation of securities business in contravention of Article 122 of the Securities Law. For further details, please click here (Chinese only)
On 7 November 2016, the SFC hosted the SFC Regtech and Fintech Contact Day 2016 to enhance understanding of emerging regulatory and financial technologies and how they intersect with securities regulation. For further details please click here
On 7 November 2016, the MMT found that AcrossAsia Limited, its former chairman, Mr Albert Saychuan Cheok and CEO, Mr Vicente Binalhay Ang failed to disclose inside information as soon as reasonably practicable as required under the SFO following proceedings brought by the SFC. This is the first time the MMT made a finding of breaches of the new disclosure obligations imposed on listed companies since they became effective on 1 January 2013. For further details, please click here
On 9 Novmber 2016, the SFC published a speech by its head of the Enforcement Division, Mr Thomas Atkinson setting out the role of SFC’s Enforcement Division in general and the key risks areas which requires Enforcement Division’s focus, its prioritisation and enhancing efficiency, its specialised teams and its collaboration with PRC and HK regulators. For further details, please click here
On 10 November 2016, the SFC published a speech by Ms Bénédicte Nolens, Senior Director, Risk and Strategy titled “Fintech and Regtech: A Securities Regulator’s Perspective”. For further details, please click here
On 22 November 2016, the HKMA issued a joint consultation with the Financial Services and the Treasury Bureau and the SFC on the Regulations on Protected Arrangements under the Financial Institutions (Resolution) Ordinance (FIRO). The consultation sets out the authorities’ intended approach to the regulations to be made under s75 of the FIRO, to provide an appropriate degree of protection in resolution for a set of financial arrangements defined collectively as “protected arrangements” under s74 of the FIRO. The deadline for submitting the comments is on or before 21 Jan 2017. For further details, please click here
On 22 November 2016, the HKMA and the Hong Kong Chinese Enterprises Association entered into a MOU for a co-operation framework to help more Chinese enterprises establish their corporate treasury centres in Hong Kong. For further details, please click here
On 23 November 2016, the SFC launched a three-month consultation on proposals to enhance the regulation of the asset management industry in Hong Kong to better protect investors’ interests and ensure market integrity. The proposed changes will be made to the SFC’s Fund Manager Code of Conduct (FMCC) and the Code of Conduct for Persons Licensed by or Registered with the SFC. The key areas in the FMCC, which are proposed to enhance are securities lending and repurchase agreements, custodian / safe custody of fund assets, liquidity risk management and disclosure of leverage. For further details, please click here
On 25 November 2016, the SFC and the CSRC jointly announced the official launch of the Shenzhen-Hong Kong Stock Connect. For further details, please click here
On 29 November 2016, the SFC announced that with effect from 1 February 2017, all individual applicants and licensees will be required to submit their licensing applications, notifications and annual returns via the SFC Online Portal, with the view of improving the efficiency of processing licensing-related matters. This will not apply to corporate applicants and intermediaries who may continue to submit their applications, notifications and annual returns either in the paper form or via the SFC Online Portal. For further details, please click here
Enforcement
On 2 November 2016, the SFC prohibited Mr Lawrence Lai, a former representative of UOB Hong Kong Ltd, from re-entering the industry for 10 years from 2 November 2016 to 1 November 2026 for breach of the Code of Conduct. Mr. Lai falsely declared that he was not related to a holder of a client account and carried out discretionary trading in secret and without proper authorization. Lai’s conduct, which fell short of the standard set out in the Code of Conduct, casts doubts on his fitness and properness to be a licensed person. For further details please click here
On 15 November 2016, the Court dismissed C.L. Management Services Limited and its sole owner and director Ms Clarea Au Suet Ming’s application for leave to appeal against their convictions for holding out providing advisory services on corporate finance without a licence from the SFC. On 29 April 2014, C.L. Management and Au were convicted on three holding out charges and fined HK$1.5 million. For further details, please click here
On 17 November 2016, the SFC prohibited Mr Derek Ong, a former representative of Deutsche Securities Asia Limited, from re-entering the industry for 10 years from 17 November 2016 to 16 November 2026 for conspiring to manipulate the KOSPI200 in November 2010. Ong was responsible for taking the decision to liquidate the holding of Korean stocks, which caused KOSPI200 to fall 2.79%, and to establish an option position to profit from the KOSPI200 fall. For further details, please click here
On 21 November 2016, the SFC prohibited Mr Benedict Ku Ka Tat, a former employee of The Pride Fund Management Limited, from re-entering the industry for one year from 18 November 2016 to 17 November 2017 and fined him HK$150,000 for failings relating to his sale of a fund to a client. An SFC investigation revealed that when Ku recommended a fund to a client in 2008, he failed to provide her with material information on the commission she would be charged for investing in the fund and his personal benefit from the commission. For further details, please click here
On 22 November 2016, the SFC publicly censured and imposed a 24-month cold-shoulder order against Zheng Dunmu for breaching the mandatory general offer obligation of the Takeovers Code. At the relevant time, Zheng was chairman, executive director and a controlling shareholder of Changgang Dunxin Enterprise Company Limited. For further details, please click here
On 30 November 2016, the MMT fined AcrossAsia Limited $600,000, its former chairman Mr Albert Saychuan Cheok $800,000, and CEO Mr Vicente Binalhay Ang $600,000 after finding they had failed to disclose inside information to the public as soon as reasonably practicable as required under the SFO. The MMT also ordered Cheok and Ang to complete a SFC approved training programme on compliance with the inside information disclosure requirements. For further details, please click here
On 1 November 2016, SEBI issued a circular on Enhanced Standards for Credit Rating Agencies (CRAs). The circular requires CRAs to mandatorily review instruments, on an ongoing basis throughout the instrument’s lifetime, on the basis of best available information, even in case of non-cooperation by the issuer. Obligations, responsibilities, managing conflict of interest, eligibility, composition, system of voting etc. of rating committee members should be set out by each CRA in its Operational Manual. For further details, please click here
On 4 November 2016, the RBI released draft operational guidelines to allow an overseas parent or its central treasury to hedge the currency risk arising out of genuine current account exposures of the Indian subsidiary in order to better manage the latter’s currency risk. The draft guidelines intends to provide greater flexibility for hedging the currency risk arising out of current account transactions of Indian subsidiaries of MNCs by the parent or any non-resident group entity. For further detail, please click here
On 7 November 2016, SEBI extended the timeline to furnish comments with respect to the consultation Paper proposing Amendments/Clarifications to the SEBI (Investment Advisers) Regulations, 2013 to 30 November 2016. For further details, please click here
On 10 November 2016, RBI issued final guidelines on capital requirements for bank exposures to central counter-parties, which will be effective from 1 April 2018. The guidelines are based on the framework finalised by Basel Committee on Banking Supervision. The guidelines will better capture the risk arising from OTC and also centrally cleared derivative transactions. For further detail, please click here
Enforcement
A media search did not find any relevant articles for India during the month of November.
On 14 November 2016, OJK held an information dissemination event on “Addressing Alleged Banking Crimes” and an Anti-Fraud Forum and launched a book titled “Understand and Avoid” (Understanding and Avoiding Banking Crimes) to provide more information and education and raise public awareness on banking crimes and the use of financial products and services, especially those of the banking sector. For further detail, please click here
On 28 November 2016, OJK published the latest Sharia Securities List which serves as an investment guide for its users, such as investment managers that manage Sharia mutual funds, Sharia insurance products and investors interested in investing in Sharia securities portfolio. For further details, please click here
Enforcement
On 1 November 2016, OJK and the Investment Alert Taskforce uncovered 2 illegal investment cases and a loan repayment fraud, which are named the PT CSI Case, PT Dream for Freedom Case and Swissindo Case. In the PT CSI case, the company was engaging in criminal acts of unlicensed public funds collection and in the PT Dream for Freedom case, the company conducted activities beyond its licences. In the loan repayment fraud case, UN Swissindo offered loan repayments by promising people that it will repay their loans/free them from their debts which does not comply with loan or financing repayment mechanisms commonly implemented in banks and finance institutions. For further details, please click here
On 15 November 2016, OJK and Investment Alert Task Force decided to stop all fund collection activities of the Pandawa Group as they might harm the public and violate the Indonesian Law on Banking. For further details, please click here
On 9 November 2016, the JFSA published the result of its annual monitoring research into mutual funds, investment corporations and collective investment schemes regarding its sales and asset management. The major findings are that where the number of Qualified Institutional Investors in funds drop to zero or where there are 50 or more general investors in the fund, a fund manager may not be able to claim that it is operating a Specially Permitted Businesses for Qualified Institutional Investor. For further details, please click here (Japanese only)
On 25 November 2016, the Nikkei Asian Review reported that the JFSA will draw up guidelines to ensure financial institutions act in the best interests of customers rather than attempting to generate commissions. The JFSA will urge financial institutions to disclose and explain all product fees and charges in full to customers, including structured notes, commissions paid by insurers to banks selling their products at their branches. For bundled products, financial institutions will have to state whether such products can be bought individually or not and allow consumers to compare to buy the bundled product or individual component. The proposed guidelines will be released in 2016 and will be effective from 2017. For further details, please click here
On 25 November 2016, the JFSA announced the establishment of a committee on underwriting of IPO stocks. The committee will check how the rules should be applied to the lead manager at the time of IPO disclosure where the securities firm that already owns the IPO securities wants to be the lead manager, taking into consideration of overseas regulations and practices. The committee will also check the rules on securities firm that received public funding in a corporate rescue in the past when it also wants to play the role of the lead manager. For further details, please click here (Japanese only)
On 30 November 2016, the JFSA published a speech by its Commissioner Mr. Nobuchika Mori, held at the annual general meeting of the International Bankers Association of Japan about the JFSA’s future regulatory approaches and the need to balancefinancial stability and effective financial intermediation, consumer protection and consumer benefit and market integrity and market vigour. For further details, please click here
Enforcement
On 2 December 2016, the SESC recommended administrative action against E-asset Management Co. Ltd, a Specially Permitted Business Notifying Person. The entity failed to segregate clients’ monies from its own money, which made it impossible to determine the revenue and loss of the Fund. The entity also diverted investment from the fund to be used for the management company’s expenses, while there was no prospect of repayment to the fund. For further details, please click here (Japanese only)
On 2 December 2016, the SESC recommended administrative action against Asset-Creation Co., Ltd and AJ Asset Creation Co. Ltd., both Specially Permitted Business Notifying Persons. Both the entities were engaging in investment management business without statutory registration and had investor protection issues in business operations. For further details, please click here and here (Japanese only)
On 25 November 2016, the SESC recommended administrative action against CELL Co., Ltd., an Investment Advisory/Agency. The entity was found to have made false statements to customers in relation to the hedge fund investments. The entity also provided customers with conclusive statements on uncertain matters and guaranteed investment returns, thereby soliciting them to conclude financial instrument transaction contracts. For further information, please click here (Japanese only)
On 25 November 2016, the SESC recommended administrative action against SQI Japan Co., Ltd., an Investment Advisor/Agency, which was found to have made false statements to customers in relation to the sale of financial instrument and their solicitation, and had made advertisements to investors that were seriously misleading. For further details, please click here (Japanese only)
On 22 November 2016, the FSC issued a set of measures for improvement of derivative markets. It will introduce margin requirements for OTC derivatives and electronic trading platforms and require securities firms to conduct stress tests for ELS & DLS markets. A ‘hedge-only’ account will be introduced to allow investors to trade derivatives for the purpose of hedging without placing a minimum deposit. Korea will also introduce omnibus accounts for trading of exchange-traded derivatives in 2017, which will allow overseas securities firms to open a single account with a domestic securities firm to process trading orders from multiple overseas investors. For further details, please click here
On 24 November 2016, the FSC announced new follow-up measures on the household debt management measures announced on 25 August 2016, targeting collective mortgages and loans from mutual finance institutions. Guidelines for loan screening will be applied to such collective loans and mutual finance loans under the principle that borrowings should be within the borrower’s repayment ability and repaid in installments from the beginning. Mutual finance institutions will have to establish and implement guidelines for screening loan applications in Q1 2017. For further details, please click here
On 24 November 2016, the FSC announced that a block chain consortium will be formed in late 2016 to discuss information related to customer verification stored in the block chain which is used in electronic financial transaction, simple customer verification and biometric authentication, sharing of suspicious transaction information, automation of clearing settlement of financial investment products, etc. For further details, please click here (Korean only)
On 30 November 2016, the FSC announced its cooperation initiatives with the Training and Research Institute of the FATF. TREIN and the Korea Banking Institute signed a MoU on the exchange of AML curriculum. For further details, please click here (Korean only)
Enforcement
On 17 November 2016, the FSC took enforcement action against Rich Funding, a securities crowd funding broker. The entity was found to have registered as an Online Microfinance Investment Intermediary by false and fraudulent method and granted credit to related parties of its major shareholder. The entity was ordered to cancel its registration, pay a penalty of KRW 133 million and dismiss one of its directors. For further details, please click here (Korean only)
On 8 November 2016, Bursa Malaysia released a second consultation paper for its proposed (New) Market on Bursa Malaysia to provide SMEs greater access to the capital market. The Exchange has taken into consideration the following key principles in formulating the regulatory framework governing the proposed (New) Market, which are:
- SMEs being able to raise capital in a cost effective and efficient manner;
- An appropriate and proportionate regulatory framework which promotes business efficacy and safeguards investor protection; and
- A qualified market which is meant for sophisticated investors only, who are able to evaluate their investment risks and make informed investment decisions based on the available information in the market.
For further detail, please click here
On 28 November 2016, Bursa Malaysia announced that its website is now accessible in tEnglish, Bahasa Malaysia and Chinese. For further detail, please click here
Enforcement
A media search did not find any relevant articles for Malaysia during the month of November
A media search did not find any relevant articles for Mauritius for the month of November
Enforcement
On 25 November 2016, the FSC revoked the Global Business Category 1 Licence, the Investment Adviser (Unrestricted) Licence and the CIS Manager Licence held by RDL Management Ltd for a number of misconducts including manipulation of shares, serving their own interest to the detriment of those of investors, failure to report some regulatory breaches to the FSC, failure to keep the proper books and records of its business transactions etc. For further details please click here
On 29 November 2016, Frontier Myanmar reported that a new Companies Act is being prepared to replace the century-old Myanmar Companies Act and the new law is expected to improve transparency and corporate governance while easing the burden on small and medium enterprises. For further detail, please click here
Enforcement
A media search did not find any relevant articles for Myanmar during the month of November
On 8 November 2016, FMA issued a consultation on guidance on advice for KiwiSaver sales to encourage advisers and financial firms to help investors make good decisions about KiwiSaver. The guidance also covers the use of incentives to encourage members to transfer from one provider to another. For further details please click here
Enforcement
A media search did not find any relevant articles for New Zealand during the month of November
On 8 November 2016, the SEC approved the PSE’s proposed supplemental listing and disclosure rules applicable to Public Private Partnership (PPP) Company. A PPP Company may apply for listing under the rules if it is a corporation which was awarded a PPP Contract or a special purpose company incorporated by the awarded corporation, joint venture or consortium which shall assume and accede to all rights and obligations of the latter. For further detail, please click here
On 11 November 2016, the SEC approved rules to govern the listing, trading and settlement of US Dollar Denominated Securities (DDS) listed and traded at PSE. For further detail, please click here
On 15 November 2016, the SEC decided to comprehensively review the application of Money Market Association of the Philippines Inc. (MART) for registration as Self-Regulatory Organization, MART is an association composed of universal and commercial banks, development banks, savings banks, investment houses, voice brokers, finance companies and insurance companies. MART filed the application with the SEC to register as SRO with SEC for debt, debt-related instruments and products including Overnight Index Swaps . For further detail, please click here
On 17 November 2016, the Department of Finance revealed that the BSP, the Department of Justice and the National Bureau of Investigation have agreed to take steps to a closer working relationship to take action against suspected money launderers. For further detail, please click here
On 28 November 2016, the DoF announced that Philippines and Iran have agreed to expand bilateral ties by establishing banking relations. For further detail, please click here
Enforcement
On 23 November 2016, the International Business Times UK reported that the Philippines’ anti-money laundering watchdog has filed criminal charges against five officials of the Rizal Commercial Banking Corp (RCBC) bank and the former treasurer Raul Tan, for “willfully” ignoring suspicious activity, which led to the theft of millions of dollars from Bangladesh’s central bank in February. For further detail, please click here
On 9 November 2016, MAS published a reply by Mr Tharman Shanmugaratnam, Deputy Prime Minister and Minister in charge of MAS, to a Parliamentary question on the “fit and proper” guidelines in the recruitment process for financial institutions confirming that MAS does not automatically reject an FI’s application to its key positions and representative’s application, because the candidate is an ex-offender. MAS adopts a proportionate approach and regards the seriousness and circumstances of the offence, the time that has elapsed since their conviction, and the duties and responsibilities to be assumed. For further detail, please click here
On 9 November 2016, MAS issued a consultation paper on Review of MAS 105 on Insurers’ Appointment of Custodian and Fund Manager, which sets out the mandatory requirement and non-mandatory best practice standards for insurers’ appointment of overseas custodians and fund managers. The consultation proposes to enhance the requirements for safeguarding assets of insurance funds when insurers appoint custodians and sub-custodians to hold such assets. For further detail, please click here
On 10 November 2016, MAS issued a consultation on proposed amendments to the Code on Collective Investment Schemes to amend the Code to enhance and refine the regulatory framework for collective investment schemes in three key areas such as (i) enhance transparency and market discipline; (ii) improve operational effectiveness and (iii) provide greater clarity to market practitioners. For further detail, please click here
On 16 November 2016, MAS issued a consultation on Net Stable Funding Ratio (“NSFR”) and NSFR Disclosure, which proposes to impose the BCBS’ NSFR to complement the existing LCR requirement in Singapore. The consultation proposes that banks fund their balance sheets with stable funding sources on an ongoing basis and reduce their funding risk over a longer term horizon. For further detail, please click here
On 16 November 2016, MAS published its “regulatory sandbox” guidelines for FInTech firms. The guidelines set out the objective and principles of the sandbox, and provide guidance to the FIs who wish to apply to enter a regulatory sandbox. The guidelines describe the application process and the information to be furnished to MAS. For further detail, please click here
On 25 November 2016, MAS published the summary of responses to Public Consultation on Proposed Regulations on the Standard for Automatic Exchange of Financial Account Information in Tax Matters. The proposed regulations include the proposed list of financial institutions and accounts that are excluded from the scope of reporting, as well as the due diligence and reporting requirements to implement the CRS. For further detail, please click here
On 30 November 2016, MAS and the Bank of Japan announced the establishment of a bilateral local currency swap agreement which allows for the exchange of local currencies between the two central banks of up to SGD 15 billion or JPY 1.1 trillion. For further detail, please click here
Enforcement
On 25 November 2016, MAS reported the largest market manipulation case in Singapore, for which 2 persons, Soh Chee Wen, also known as John Soh, and Quah Su-Ling, were charged for orchestrating a massive fraud to manipulate the market for the shares of Blumont Group Ltd (Blumont), Asiasons Capital Limited (Asiasons) (now known as Attilan Group Ltd) and LionGold Corp Ltd (LionGold) between August 2012 and October 2013. For further detail, please click here
On 17 November 2016, the SEC issued a Directive regarding the revision of rules on minimum public holding applicable to all listed companies. The revision provides listed public companies with a wider ranger of options in their compliance with the rules on minimum public holdings. For further detail, please click here
On 22 November 2016, the SEC issued a Directive regarding the mandatory implementation of risk based capital adequacy requirements applicable to all licensed stock brokers excluding those licensed only to trade in debt securities. The Rules require to maintain a minimum capital adequacy ratio of 1:2 subject to a minimum liquid capital of LKR 35 million. For further detail, please click here
On 29 November 2016, CBSL announced the enactment of the Microfinance Act, No. 6 of 2016, which provides regulatory framework to cover micro-finance institutions that are not regulated at present. The purpose of the Act is to improve the delivery of financial services to low income persons and micro enterprises, increase financial inclusion, strengthen the soundness and systems of micro-finance institutions, facilitate micro-finance institutions to access wider sources of funding, promote consumer protection and promote a safe and stable financial system. For further detail, please click here
Enforcement
A media search did not find any relevant articles for Sri Lanka during the month of November
On 18 October 2016, the FSC amended certain regulations governing domestic and foreign derivative financial product transactions of securities firms. The highlights are:
- The FSC has relaxed restrictions on securities firms’ transaction limits for non-hedging derivative financial product transactions; limits are now calculated by ratio of market risk equivalent to net amount of eligible regulatory capital, instead of the ratio of the aggregate nominal value of the contract to net worth.
- The FSC has lifted the restriction that did not allow securities firms to over-hedge when they engage in foreign and domestic derivative financial product transactions for hedging purpose in their warrant and derivative financial product businesses.
For further detail, please click here
On 3 November 2016, Focus Taiwan reported that Taiwan FSC plans to lift the cap on investment by venture capital firms in seven innovative industries. The FSC issued an advance notice of its intention to relax a regulation governing investment by venture capital subsidiaries of financial holding companies, before it is officially promulgated and comes into effect in December. For further detail, please click here
On 11 November 2016, the Taipei Times reported that investors will have greater access to risk hedging tools when an after-hours futures trading platform launches next year, according to the FSC. The Taiwan Futures Exchange (TAIFEX) and the nation’s 15 exclusive futures commission merchants plan to establish the platform, which is expected to be launched in May next year. For further detail, please click here
On 24 November 2016, the FSC amended some articles of Regulations Governing Securities Investment Trust Funds in order to facilitate the issuance of new fund products by SITEs and increase flexibility of operating securities investment trust funds. The key points are the introduction of “multi-asset funds”, large-scale removal of restrictions on fund investments, allowing different types of investment strategy development by SITEs, and introduction of fund products that satisfy investor financial management needs for retirement. For further detail, please click here
On 30 November 2016, the Taipei Times reported that the FSC will tighten money laundering rules from 1 January 2017 which includes requiring banks to verify clients’ identities. Banks will have to confirm the identities of clients involved in cross-border fund transfers of more than NT$30,000. Banks are allowed to set their own guidelines on regulating overseas transactions and banks will also have to establish their own independent AML departments as of April 1 2017. For further detail, please click here
Enforcement
On 9 November 2016, the Taipei Times reported that Taiwan FSC imposed fines of NT$10 million and NT$8 million on Bank SinoPac and Hua Nan Commercial Bank respectively for irregularities in loans extended to Tingsing Trading Co, a dentistry supplier. According to the FSC the two banks failed to account for default risk. Bank SinoPac had extended loans of about NT$400 million to Tingsing, and failed to list conflicts of interest, as the debtor is operated by a relative of Ho Shou-chuan, chairman of Bank SinoPac’s parent. Hua Nan Commercial Bank was fined as it granted a loan of NT$900 million to Tingsing based on a cursory approval process. For further detail, please click here
On 30 November 2016, the FSC fined Shinkong Insurance Co. NT$1.8 million for violating regulations and ordered a halt to the sale of insurance products involved. For further detail, please click here
On 30 November 2016, the SEC sought public comments on draft amendments concerning mutual fund product governance to ensure that intermediaries’ business practice focuses primarily on investors’ best interest. The relevant regulations cover four key areas, namely:
- The organizational structure, the roles of the board of directors and the responsibilities of the senior management;
- The fund product governance;
- The criteria for selection of intermediaries/unit distributors and product communication; and
- The oversight of fund products and duty performance of selling agents.
For further detail, please click here
Enforcement
On 17 November 2016, the SEC filed a criminal complaint against Mr. Chupong Tanasettakorn, former deputy managing director of Country Group Holdings Public Company Limited and two aiders namely Mr. Chanchai Piulueangsawat and Mrs. Onpimon Piulueangsawat, for dishonest acts. For further detail, please click here
On 21 November 2016, the SEC revoked the approval of eight securities investment consultants of KASIKORNBANK Public Company Limited for committing frauds against the assets of mutual fund clients. Six of the offenders are banned for the maximum period of 10 years each, and the other two for five years each. In addition, three branch managers of the bank were penalized for misconduct related to the offences of the investment consultants. For further detail, please click here
On 10 November 2016, the Saigon Times reported that the Orient Commercial Bank signed an agreement with Fintek Co Ltd and Tess International to implement an AML project which utilizes a software system to filter any high-risk customers and suspicious transactions. For further detail, please click here
On 29 November 2016, the SBV reported the joint conference by its Vietnam National Credit Information Center and the International Data Group on risk management solutions in banking-technology and credit institutions operating in Vietnam. For further detail, please click here
Enforcement
A media search did not find any relevant articles for Vietnam during the month of November
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