China: Mutual recognition to use variety of currencies
Currencies other than the renminbi will be permitted for use in Hong Kong-China mutual recognition, a senior mainland official has revealed.

Speaking at a regulatory briefing on July 3, Ye Haisheng, deputy director general at China’s State Administration of Foreign Exchange, noted that fund flows can be conducted in currencies other than the renminbi, with conversions being made either in Hong Kong or in mainland China.

The conference also noted that the Securities and Futures Commission, Hong Kong’s financial watchdog, has received 14 fund applications for southbound distribution and 11 northbound fund applications for distribution in mainland China, as reported.

Malaysia: Regulator introduces new category for boutiques
The Securities Commission Malaysia (SCM) is liberalising its rules to pave the way for the establishment of boutique fund houses.

With immediate effect, parties with niche fund management expertise can be licensed as boutique fund management firms with paid-up capital of RM500,000 ($131,000), compared to RM2 million for a fully-fledged fund management licence. The SCM made the announcement on July 8.

Licensing requirements are tiered according to the size and scale of business and clientele. Boutique fund management companies can manage assets up to RM750 million with a clientele of not more than 50 sophisticated investors.

China: New rules introduced to stem stock plunge
China has pushed through a series of measures to stem the plunge in stock prices, which at one point saw the Shanghai composite index down as much as 30% from its June 12 peak.

The recent initiatives include greater flexibility for lenders to renegotiate maturity terms for stock collateral loans and will encourage banks to offer capital to firms planning to buy back their own shares, the China Banking Regulatory Commission announced last Thursday (July 9).

The People’s Bank of China has also been “actively” assisting the China Securities Finance Corporation (CSFC), a state entity responsible for lending to brokers. The CSFC has offered Rmb260 billion ($41.8 billion) in credit lines to 21 large Chinese brokers; the brokers have pledged to invest Rmb120 billion in the domestic stock market.

The Shanghai composite index fell 1.16% yesterday to close at 3,924 points.

Singapore: MAS refines Reits market proposal
The Monetary Authority of Singapore is looking to implement new measures that would offer greater protection for investors in real estate investment trusts while also ensuring greater operational flexibility for Reit managers.

The proposals come after the publication of market feedback on July 2, which showed that corporate governance will play a significant role in the new proposals.

Reit managers and their directors will be directed to prioritise the interests of Reit unit holders over their own interests in case of conflict of interest. Also, at least half of a manager’s board of directors must be independent if unit holders do not have the right to appoint the directors.

Likewise, managers will be required to disclose their remuneration policy and procedures in annual reports to improve accountability.

There are also proposals to boost fee structures’ transparency by requiring managers to justify each type of fee charged.

Greater operational flexibility will also be in the new plans, with a Reit’s development limit to be increased to 25% of a property, up from the current 10%.

India: Fatca agreement signed with US
The United States has signed a taxation information-sharing scheme with India as part of a series of agreements to tackle tax evasion by US citizens globally.

Under the Foreign Account Tax Compliance Act (Fatca), financial institutions including fund houses and banks will be expected to send their American clients’ account information to the US Internal Revenue Service.

Reciprocity is expected under the Model 1 Intergovernmental Agreement, with India looking to receive the same level of information regarding its own citizens holding US financial accounts, according to the agreement published on July 9.

Singapore: MAS consults over OTC derivatives clearing
The Monetary Authority of Singapore (MAS) announced a consultation on July 1 seeking views over the regulation of central clearing of over-the-counter derivatives.

The proposals for central clearing, which is used to mitigate the counterparty credit risks inherent in OTC derivatives trades, include the mandating of Singapore-dollar and US-dollar interest rate swaps for central clearing. These are the most widely-traded interest rate derivatives in the city state. 

The mandate will only apply to banks that book in excess of $20 billion worth of derivatives contracts, on a gross notional outstanding basis. Such entities will be able to choose to clear through domestic or foreign central counterparties, as long as they are regulated by MAS. 

Hong Kong: Private banker handed 3-year ban over CV lies
Hong Kong’s securities watchdog has banned Laura Kiang Mang Yi from re-entering the financial industry for three years from July 13, 2015, to July 12, 2018.

The ban comes after the revelation that she made false claims in her CV to her employer Julius Baer claiming that she obtained a master’s degree from New York University (NYU) in 2008 when in fact she had only studied at the university without having completed her degree.

When asked to provide evidence to support her academic qualification, rather than telling the truth, Kiang obtained a fake diploma purporting to have been issued by NYU and submitted it to the Swiss bank.

In a statement on July 13, the Securities and Futures Commission said Kiang knowingly made a false representation to her former employer about her academic qualification and her misconduct was aggravated by the manufacture of the fake diploma.