AsianInvestor's regulatory roundup, Dec 11

Iosco launches cross-border consultation; Korea eyes stock market revival; China permits stock options, loosens ABS rules; Singapore to launch corporate bond platform; and US rewards Asian whistleblowers.
AsianInvestor's regulatory roundup, Dec 11

International: Iosco targets cross-border cooperation
The International Organisation of Securities Commissions (Iosco) has launched a consultation with regulators globally to determine its own rule-making role and to improve cross-border collaboration.

It has proposed the creation of a central hub for information that would act as a forum to allow regulators to share their experiences with cross-border dealings, such as fund passporting or mutual recognition.

It has also floated the idea of Iosco facilitating dialogue between government policymakers and regulators in different jurisdictions to identify potential cross-border inconsistencies before the adoption of new laws.

Moreover, it wants to provide technical assistance in the creation of cross-border schemes between regulators, providing information such as what is working and where there are potential difficulties.

Iosco has asked for comments to be submitted on or before February 23 next year.           

Korea: FSC moves to revitalise Korean market
The Financial Services Commission (FSC) is looking to implement a series of measures to boost trading and revitalise Korea's stock market after years of poor performance.

“The benchmark index Kospi has been hovering around the 2,000-point level since it hit 2,000 points for the first time in 2007," the FSC stated. "There are not enough newly listed stocks to boost trading. The market infrastructure and trading system is not attractive to investors compared with advanced markets."

Among the measures it is looking to introduce, the FSC will expand the scope of allowable products, revising listing rules to encourage blue-chip companies to go public in the first half of 2015.

Further, it is seeking to set up a common investment pool for smaller private pension funds and university funds. This money would be managed by Korea Securities and Finance Corporation and asset management companies.

Thirdly, it would look to create a new stock index - tentatively called the KTOP 30 comprising the 30 best-performing stocks on the Kospi and the Kosdaq - to improve the overall market’s infrastructure and trading system.

And the FSC would also look to strengthen disclosure rules for asset managers to enhance investors’ trust .

China: Option rules drafted for stocks, ETFs
The Shanghai Stock Exchange and the China Securities Regulatory Commission have published draft rules on the introduction of options for stocks and exchange-traded funds.

To qualify, they would need to have been listed for at least six months and not seen volatility levels surpass the daily average of the benchmark index by more than three times over the previous six months.

The consultation period for the draft rules is due to end on January 5 next year.           

China: ABS allowed for fund house subsidiaries
The China Securities Regulatory Commission (CSRC) has moved to allow the segregated account subsidiaries of domestic fund houses’ subsidiaries to participate in asset-backed securities (ABS) business. It has also issued guidance on information disclosure and due diligence in ABS.

According to the rules, announced late last month, brokerages, financial leasing firms and fund house subsidiaries are eligible. The CSRC requires ABS issuers to register with the Asset Management Association of China and to provide information disclosure and due diligence.

The new regulations will widen the playing field for ABS market participants as the barriers to entry have been reduced, noted Shanghai-based Z-Ben Advisors.

Singapore: Asian corporate bond platform set for 2015
The Singapore Stock Exchange (SGX) has announced that Asian corporate bonds will be allowed to trade on a new subsidiary platform called SGX Bond Trading by mid-2015.

Initially it will be limited to bonds denominated in G3 currencies, with Asian local currencies to follow at a later date.

SGX wants the platform to become an Asian liquidity centre for both high-yield and investment-grade corporate bonds.

The exchange's chief executive, Magnus Bocker, said: “SGX believes that in the long term, the Asian fixed income markets are poised for strong growth, given the region’s growing infrastructure needs and investor demand for steady, long-term returns."

Asia: Asian whistleblowers get US rewards
More than a dozen Asian countries have tipped off the US Securities and Exchange Commission since it introduced an anti-corruption rewards programme for whistleblowers.

Since 2011, the US Securities and Exchange Commission has paid non-US citizens more than $30 million in whistleblower rewards to a total of 15 recipients.

Of the 1,136 whistleblower tips made between fiscal 2011 to 2014, 35% came from Asia, most prominently from China, India and Australia. The claims included corporate disclosures and financial fraud, manipulation and insider trading.

“The US reward programmes are filling the void caused by a lack of international whistleblower protections," said Stephen Kohn, executive director of the National Whistleblower Centre, an organisation dedicated to protecting disclosure of fraud.

"Until other countries enact effective laws, whistleblowers around the world will continue to face harsh retaliation. It is troubling that whistleblowers have to come to the United States for protection, while their home countries have ignored their plight, or participated in the retaliation."

Other news on regulatory matters reported on recently:

Malaysia's SC addresses Asean passport concerns

Stockbroker charged with insider trading in Malaysia

Managers brace for mutual recognition hurdles

HK hedge funds urged to litigate in tax cases

Asifma flags fund firms' Stock Connect concerns

Fund firms set for more scrutiny: RBS ITS

Lion Global's Tan flags Stock Connect issues

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