Regulatory round-up: China crackdown

Brokers prop up China stocks; Safe authorises new players for interbond market; and more.
Regulatory round-up: China crackdown

China: Brokers to prop up market with Rmb30 billion

Haitong Guotai Junan Securities, Changjiang Securities and Pacific Securities are amongst nine Chinese brokers which have pledged Rmb30 billion to support the volatile Chinese market.

The revelation, which was reported on China Securities Journal last Wednesday, will see such groups increase their equity investment funds from 15% to 20% of their net assets.

It comes soon after news that Chinese authorities are investigating senior executives from leading securities houses and the detention of a senior executive at Citic Securities as reported by sister publication FinanceAsia, providing further evidence that some state officials are increasingly leaning on their authoritarian instincts to help end the A-share mayhem.

Four of China’s largest brokerages – Haitong Securities, GF Securities, Huatai Securities, and Founder Securities – said in separate filings late Tuesday that they were being investigated by the China Securities Regulatory Commission for their suspected failure to “review and verify clients’ identities.”

The moves would “awe the delinquents” and “purify” the capital markets, the official Xinhua News Agency said in a commentary on Wednesday. “As the investigations continue, more criminals and their hidden crimes will be exposed.”

China: Safe authorises 10 groups for interbank bond market

Ten foreign financial groups have been named by China’s foreign exchange authority as being allowed to access the country’s interbank bond market.

The move which was announced by the State Administration of Foreign Exchange on Monday confirms speculation earlier this year that interbank bond market will be further opened this year, as reported.

Of the six RQFII-licensed financial groups to be permitted to buy into the interbank bond market are Singapore’s Schroders, DBS, Shinhan BNP Paribas Asset Management, Lion Global Investors, Bank of Nova Scotia (Asia) and Tong Yang Asset Management.

QFII licensees which can access the market are BNP Paribas Investment Partners, Bank of Nova Scotia, Fubon and Hyandai Securities.

Malaysia: Regulator sets eye on fintech hub development

The Malaysian securities watchdog has launched a fintech alliance community in a bid to turn the country into a regional Silicon Valley for financial technology.

The set-up of aFINity@SC, short hand for Alliance of FinTech Community, last Wednesday will aim to create new growth for the Malaysian financial and capital markets, chairman of the Malaysia securities watchdog Datuk Ranjit Ajit Singh said, our sibling publication FinanceAsia reported.

Boasting of the country’s nascent record so far, Singh noted that there are currently six operators in the crowdfunding business, while Malaysia became the first Asean country this year to legislate for equity crowdfunding. 

The push into fintech -- short for “financial technology” -- tallies with Malaysia's growing need to lessen its reliance on commodity export earnings, which have floundered as commodity prices have sunk, sending the ringgit to its weakest level against the US dollar since the Asian crisis of 1998.

 Hong Kong: e-banking restrictions eased

The Hong Kong Monetary Authority has added more flexibility for banks to conduct a wider range of electronic banking services.

Amongst the changes will see customers effect small-value funds transfers to third-party payees through internet banking, without the need of using 2-factor authentication to re-authenticate the customer’s identity, with caps determined by customer and banks. At this stage, caps by banks should not exceed HK$3,000 over 2 days per account.

The ability of customers to use mobile devices to conduct a wide range of transactions including funds transfers to unregistered third-party payees and the above mentioned small-value funds transfers.

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