AsianInvestor's regulatory roundup, June 25
Australia: Asic issues guidance on online disclosure
The Australian Securities and Investments Commission (Asic) has released guidelines that require superannuation funds and trustees to disclose by next month the remuneration of their executives on their websites.
From July 1, funds and trustees will be required to publish on their websites up-to-date details about their executives, fund product disclosure statements, actuarial reports and summaries of significant events that have occurred over the past two years.
Asic also released clarifications of fee and cost-disclosure requirements for superannuation trustees, particularly the calculation of indirect costs and the disclosure of performance and advice fees.
The changes are part of the government’s reform programme, dubbed 'Super Stronger', that aims to make the country’s retirement system more efficient.
While the regulator says the exercise is part of a push to make the industry more transparent, it comes after it said its supervision of the market will be affected by government budget cuts of around A$120 million ($120 million) over the next four years.
Hong Kong: SFC launches price-disclosure proposals
Hong Kong’s Securities and Futures Commission (SFC) yesterday began a one-month consultation on proposals to amend its Code on Unit Trusts and Mutual Funds.
The proposals would give collective investment schemes greater flexibility in how they make public their offer and redemption prices, net asset values (NAVs) and notices of dealing suspension. They would also require more frequent dissemination of prices and NAVs – with every dealing day proposed as a suitable frequency.
The SFC said it is reviewing the code because of recent developments in information technology and market practices, as well as regulatory requirements in major overseas markets.
Existing rules require disclosure of prices or NAVs at least once a month in at least one leading Hong Kong English-language and one Chinese-language daily newspaper.
Australia, the European Union and Singapore generally allow collective investment schemes flexibility on the publication methods they use to disclose information, the SFC noted.
"In this particular case we took note of the fact that members of the public now access information through a wide variety of channels," said SFC chief executive Ashley Alder.
The SFC requests comments be submitted by July 24.
Hong Kong-Malaysia: Regulators team up to boost Islamic finance industry
Hong Kong is looking to forge closer ties with Malaysia with a view to fostering an Islamic finance and fund management industry in the city. The Southeast Asian country in turn hopes to benefit from Hong Kong's strength as an international financial centre.
"We see Islamic finance as a valuable proposition, one which can contribute towards innovation and diversity in our financial market," said Alexa Lam, deputy CEO of Hong Kong’s Securities and Futures Commission (SFC) at a joint seminar last week with Malaysia's Securities Commission (SC).
SC chairman Ranjit Ajit Singh said: "Malaysia has been the Islamic funds gateway in Asia, linking the Middle East and Europe to this part of the world. While Hong Kong can leverage on Malaysia’s Islamic fund management capabilities, Malaysia at the same time would benefit from Hong Kong’s strength as an international financial centre."
The half-day event brought together more than 100 policy makers, regulators and international industry participants from Hong Kong and Malaysia.
It came after the launch of a sharia-compliant balanced fund by Malaysia-based RHB Asset Management in Hong Kong last week, the first SFC-authorised Islamic fund.
Thailand: SET considers capital gains tax on stocks
The Stock Exchange of Thailand (SET) is mulling a capital gains tax of 5% on stocks held for less than a year, with mutual funds exempted. An SET spokesperson told AsianInvestor that the move was not imminent.
The levy, suggested by SET board member Kitipong Urapeepatanapong, is intended to reduce speculative trading, according to Reuters.
But Satit Limpongpan, the board’s chairman, has reportedly questioned whether such a charge would be detrimental for the exchange given that half of stock trades are done by retail investors.
Regional bourses in Hong Kong, Malaysia and Singapore do not charge such levies, but Taiwan does.
The tax will be deliberated at a SET board of governors meeting early next month, reports the Bangkok Post.
Taiwan: FSC relaxes curbs on overseas investing
Taiwan's Financial Supervisory Commission (FSC) has said local securities companies could apply for an exemption to a cap that limits their overseas investments, reports the Taipei Times.
Domestic securities firms are permitted to invest up to 40% of their net worth overseas, as long as they have a capital adequacy ratio of 200%. That cap may be removed completely for qualifying houses, FSC chairman William Tseng was quoted as saying.
At least five securities firms are eligible to apply to have the cap removed, the newspaper said.
The regulator could not be reached for confirmation or comment by press time.
China: PBoC to tighten rules on wealth management products
Pan Gongsheng, deputy governor of the People's Bank of China, has vowed to further tighten regulation of the country's wealth management products.
Assets invested in WMPs reached Rmb12.8 trillion ($2.1 trillion) as of end-May, according to the country’s central bank. In 2013, WMP asset growth was 30-40% and in 2012 it was 60-80%, Xinhua reports, quoting Pan.
While the wealth management industry has deployed social resources to support economic growth, risk management needs to improve, he was quoted as saying.
WMPs are usually short-term investments, some half of which are exposed to troubled sectors of the economy. They are popular with retail investors because they offer higher rates than bank deposits.
With China’s growth prospects looking increasingly shaky, market commentators have voiced concerns that increasing risk in the economy may lead to defaults.
Last year the China Banking Regulatory Commission issued rules to curb WMP excesses. One of the rules requires banks to specify which assets are linked to the products.
Other regulation-related stories published on AsianInvestor.net recently:
Korea urged to set up investment office in Australia
CIC vows to improve after damning auditor report
New capital markets body urged to heed buy-side view
Foreign firms in line to benefit from CSRC reform plans