Financial Services Update: Malaysia Tightens Restrictions on Foreign Insurance Investment

Financial Services Update | June 29, 2017
Authors: Shay Wester, Ian Saccomanno, and Cameron Barkan

 
LOOKING AHEAD
 
 

July 25-27, 2017 - The Philippines Business Mission: The US-ASEAN Business Council is now registering executives for its 2017 Business Mission to the Philippines. Please note that the registration deadline is July 11. Click here to register. Contact Riley Smith at rsmith@usasean.org with any questions.

July 31, 2017 - ASEAN Secretariat Business Mission: The Council is now registering executives for its annual ASEAN Secretariat Business Mission, taking place on July 31 in Jakarta. Click here to register. Please note that the registration deadline is July 17. For more information, please contact Matt Solomon at msolomon@usasean.org or Mario Masaya at mmasaya@usasean.org.

August 1-3, 2017 - Indonesia Business Mission: The US-ASEAN Business Council is now registering executives for its 2017 Indonesia Business Mission. Please note that the registration deadline is July 18. Click here to register. Contact Artha Sirait at asirait@usasean.org with any questions.

 
THE COUNCIL'S TAKE
 
 

Malaysia Tightens Enforcement of Foreign Investment Restrictions in Insurance

The new leadership of Bank Negara Malaysia (BNM), under Governor Muhammad bin Ibrahim, has moved to tighten enforcement of its 70 percent foreign equity cap on insurance companies. BNM recently sent letters to foreign insurance companies that exceeded this level, asking them to increase their local shareholding to at least 30 percent by June 2018. Full enforcement of the regulation will also prevent foreign firms from investing in more than one local insurer. Though the ownership cap has existed since 2009, BNM had previously granted exemptions for foreign investors that they saw as contributing to the development of the industry. BNM’s new leadership, however, has chosen to focus on promoting local involvement in the industry instead. There are currently 11 Malaysia-incorporated insurers that are wholly owned by foreign insurance companies. Relatively small local equity markets may make it difficult for all of these companies to both raise local ownership at a competitive price at the same time and to raise additional financing for future expansion. With national elections expected in October or November, Malaysia’s senior leadership’s attention will be diverted by more urgent matters. Following that, however, the new cabinet will have more time and political capital to deal with challenges such as this before the June 2018 deadline. BNM's leadership changed in May 2016 when the current governor, Muhammad bin Ibrahim, replaced Dr. Zeti Akhtar Aziz, who had run BNM since 2000.

Myanmar House Approves Insurance Proposals

Myanmar’s Lower House (Pyithu Hluttaw) accepted initial proposals to develop laws on national crop insurance and national health insurance on June 21 and June 22 respectively. The proposal for health insurance passed with support from 15 MPs and Minister for Health and Sport Dr. Myint Htwe with the goal of creating a more effective and affordable national healthcare system. Dr. Myint Htwe also commented that Myanmar will have to improve healthcare services before the proposed insurance system can be implemented. Both proposals are now going through State and Regional municipalities for public consultation. After that, both proposals will go to their relevant Ministries to draft the bills. Before becoming a law, each bill will have to be debated and passed by the Lower House and the Bills Committee, then the Upper House, and finally to the President. The Council plans to submit feedback on the national health insurance proposal as the bill begins the drafting process. Please contact Jack Myint at jmyint@usasean.org to discuss the proposal further. As the timing drafting process will coincide with the Health and Life Sciences Committee’s Mission to Myanmar, which is tentatively scheduled for the week of August 14, the Mission will also provide an excellent opportunity to discuss the bill. More information on the Mission will be distributed in the coming weeks.

Leadership Transition Begins at Indonesia’s Financial Services Authority (OJK)

On June 8, a new OJK Board of Commissioners was appointed following confirmation hearings conducted by the House of Representatives (DPR) Commission XI, which supervises fiscal policy and the financial sector. Under the 2011 OJK Law, the structure of OJK Board of Commissioners consists of seven selected commissioners and two ex officio commissioners appointed by the Ministry of Finance and Bank Indonesia. The new OJK Chairman will be Wimboh Santoso, who previously worked as President Commissioner of Bank Mandiri, IMF director of Southeast Asia in Washington, DC, and head of Bank Indonesia’s New York Branch. He will be joined by Nurhaida (the only remaining member of the previous Board of Commissioners), Tirta Segara, Riswinandi, Heru Kristiyana, Hoesen, and Ahmad Hidayat, whose specific roles have not been decided. DPR Commission XI chose to forego the recommendation made by President Joko “Jokowi” Widodo to assign specific positions to each commissioner. Rather, the commissioners were elected without specified positions, which will now be determined later by the OJK itself.

The new commissioners are expected to be sworn in by July 21. The current Chairman, Muliaman Hadad, has organized a transition team to ease the transfer of authorities. He said that the first action will be to determine the division of roles. Once that has been determined, Chairman Muliaman highlighted the importance of meetings between the old and new commissioners to discuss the tasks at hand like continuing to improve credit worthiness, infrastructure funding, and a new regulation on the structure of financial conglomerates. Recently, Chairman-elect Wimboh said he hopes to attract funding from foreign and domestic sources, including in the insurance industry and local stock market, to prevent financial shortages from further slowing down the government’s infrastructure development plan. OJK would also speed up bond issuances and asset securitization for companies involved in infrastructure development. The Indonesian government can right now only finance about a third of transport and power projects. The Council has consistently advocated for the Indonesian government to explore ways of making infrastructure investment opportunities more attractive to the insurance industry, which have a proclivity for investing in longer term assets like infrastructure. In addition, Chairman-elect Wimboh hopes to lower fees from financial institutions while cutting OJK spending. The new chairman explained that under his leadership he wants the OJK to become more efficient as a whole.

Myanmar’s Insurance Market Gradually Opening to Foreign Firms

At the Myanmar Investment Forum held in Naypyitaw on June 6-7, the government announced plans for a more competitive insurance market. Managing Director of Myanma Insurance and former Chief Regulator at the Ministry of Finance and Planning, Daw Sandar Oo, explained that the government’s plan has already been approved by the cabinet and will be rolled out within three months. Her presentation confirmed that this plan will allow for foreign insurance underwriters, brokers, and agents to obtain licenses to sell products. Since 2012, when the government broke state-owned Myanma Insurance’s monopoly on the insurance sector, Myanmar has begun opening to private firms. Private local companies can now operate in Myanmar, but the government is encouraging further liberalization. Back in December U Thant Zin, an official in the Financial Regulation Department, emphasized that Myanmar planned to allow foreign firms to operate while easing the restrictions on local firms.

Challenges remain as more technical expertise is needed for the insurance sector to blossom. Current legislation will not accommodate a highly competitive insurance market, but the government’s commitment to liberalization bodes well for private companies. Right now, 24 foreign insurance companies have representative offices open in the country in anticipation of the market fully opening.

 
 
 
 
IN THIS UPDATE
 
 
Market Development
SEC proposes Minimum Public Ownership level of 20%
Incoming BSP chief charts course
New Malaysian financial district taking shape in KL
OJK Launches Online Licensing for Bank Bonds
A roadmap for financial growth
Strategy promises inclusive economic growth
World Bank urges liberalisation of accounting and auditing sector
SGX, A*STAR to help firms access capital markets

Asset Management
Capital market in positive trajectory this year: OJK
PSE seals deal to acquire BAP stake in fixed-income bourse
Winds of change blow in Indonesian high yield

Banking
Central Bank to penalise unlawful use of foreign currencies
ADB Continues Support for Indonesia's Bid for More Inclusive Financial Sector
Singapore: Association of Banks updates Guidelines for Outsourced Service Providers
BSP to roll out tighter rules on banks’ IT systems
BSP set to tighten bank reporting rules, sanctions
BSP to pursue reforms under new leadership
Indonesia to Access Its Taxpayers' Financial Data in Hong Kong
Smaller banks overtake giants in profit growth
SGX and IMDA to help accredited companies in Singapore be IPO-ready
Interest rates rising, banks stablising
US probes 1MDB links with $2.2bn energy deal
Interbank market to launch this year
Maybank launches Asean's first FinTech ecosystem

E-Payments
The Malaysian fintech ecosystem is on the brink of a revolution, and everyone is in on it
Banks to charge fees for cashless toll road system
Big banks and fintech firms urged to work together
OJK to Monitor Fintech
BSP sets ‘hard deadline’ for EMV adoption
How FinTech Startups Are Transforming The Way Banks Function In Indonesia
Mobile money flourishing in Myanmar

Insurance
Vietnam: Insurance mart grows to US$1.7 bln in Jan-May
Malaysia: More innovation needed following insurance deregulation
Lower House accepts health insurance proposal
Lower House accepts crop insurance proposal
Indonesia: Call made for more professionals in insurance sector
Insurance sector revenue grows 19%
Insurance Companies in Indonesia Must Follow Requirement on Ultimate Shareholders
Singapore: Pilot done on 1st multinational cover using blockchain
Singapore: MAS licenses first local life insurer in 47 years
Cambodia: Insurance mart shows robust growth in 1Q
Myanmar readies reforms to liberalize insurance market

Market Regulation
Asia's financial safety net is a work in progress
New OJK Chairman Wimboh Santoso May Lower Fees for Financial Companies
Philippines SEC Adopts New Policy Requiring All Companies to Obtain a Securities Exemption for Share-Settled Awards
OJK prepares smooth transition for new officials
China’s squeeze on capital outflow felt in Cambodia
Singapore: Regulating Robo-advisors
OJK Stops Operations of Three Investment Firms  
Hard to invalidate Islamic contracts, scholars say amid Dana Gas sukuk dispute
OJK launches integrated license system for Indonesian banks issuing bonds
OJK Simplifies the IPO Process and Enhances Disclosure
Liberalization of the Exchange Control Regime
Loan Growth Hits Double Digits: OJK Chief
New regulator looking for infrastructure finance solutions-
New market rule to improve trading quality
OJK Facilitates SMEs Into Stock Exchange
OJK Tells Financial Conglomerates to Form Holding Companies by Jan. 1, 2019
OJK‘s Focus in Trimming Lending Rates Gradually
OJK to Revise Loan Growth Target
 
ARTICLE CLIPS
 
 
Market Development

SEC proposes Minimum Public Ownership level of 20% Lexology 27th Jun 2017
Citing the need to promote the development of the Philippine capital market and encourage the widest participation of ownership in enterprises, the Securities and Exchange Commission (“SEC”) published on 31 May 2017 the proposed Rules and Regulations on Minimum Public Ownership of Publicly Listed Companies (the “Rules”). The Rules increase to twenty percent (20%) the required public float for all companies whose shares are listed and traded in an exchange.

Incoming BSP chief charts course Business World 26th Jun 2017
The Central Bank will ease foreign exchange rules and allow new financial products in the next six years as it maintains market-oriented policies, incoming Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla, Jr. said, assuring policy continuity. “Under my watch, the BSP will continue to move towards more market-based execution of monetary policy… We will continue to pursue capital market reforms to provide a viable alternative source of financing for long-term investments, including the development of the necessary financial market infrastructures,” Mr. Espenilla said in his speech at a testimonial dinner hosted by the Bankers Association of the Philippines.

New Malaysian financial district taking shape in KL The Straits Times 21st Jun 2017
Malaysia's newest financial district is taking shape and drawing investment after spending years mired in controversy for its links to an embattled state investment fund. The Tun Razak Exchange, or TRX, reached critical mass for its initial phase after HSBC Holdings this month said it will invest US$250 million (S$347 million) to build its local headquarters in the development, said TRX City chief executive officer Azmar Talib.

OJK Launches Online Licensing for Bank Bonds Jakarta Globe 21st Jun 2017
The Financial Services Authority, or OJK, has launched on Tuesday (20/06) an online licensing and registration system, which will significantly reduce the time needed by local lenders to secure approval for their bonds issuance, paving way for more streamline licensing within the country's financial industry. The system, called the Integrated Licensing and Registration Information System, or Sprint, cuts the time needed for lenders issuing bonds to just 22 days from 105 days. It can do so by integrating paperwork in OJK's departments that handle banking with the one handling capital market.

A roadmap for financial growth Phnom Penh Post 20th Jun 2017
A roadmap for financial growth The government yesterday unveiled its financial sector development strategy for 2016 to 2025, which provides stakeholders with a document to evaluate the last decade of growth while outlining an action plan for the next decade.

Strategy promises inclusive economic growth Khmer Times 20th Jun 2017
The government yesterday launched its updated development strategy for the financial sector, setting out policies and challenges for both the banking and non-banking industry. The 124-page document looks back on the progress of the country’s financial sector in last 15 years and attempts to predict what must be done over the next decade. Chea Serey, director-general of the National Bank of Cambodia, said the strategy will strengthen the financial sector in the country. “Stable development of the economic sector will benefit the public,” Ms Serey said.

World Bank urges liberalisation of accounting and auditing sector The Myanmar Times 20th Jun 2017
World Bank urges liberalisation of accounting and auditing sector A New World Bank report has urged the government to finalise the statutory framework of the accounting and auditing sector and relax restrictions on foreign accountants and auditors to practice in the country. The Report on the Observance of Standards and Codes – Accounting and Auditing has made several recommendations to improve the accounting and auditing infrastructure.

SGX, A*STAR to help firms access capital markets Singapore Business Review 19th Jun 2017
They inked a two-year deal. Singapore Exchange and Agency for Science, Technology and Research (A*STAR)'s ETPL will be teaming up to help start-ups and small and medium-sized enterprises (SMEs) tap on innovative technologies and capital more efficiently.

Asset Management

Capital market in positive trajectory this year: OJK The Jakarta Post 26th Jun 2017
Indonesia’s capital market is moving in a positive trajectory and performing better than last year, the Financial Services Authority (OJK) has said. After global ratings agency S&P Global Ratings upgraded Indonesia’s status to investment level in May, the Jakarta Composite Index (JCI) — the gauge of the Indonesia Stock Exchange (IDX) — broke several records.

PSE seals deal to acquire BAP stake in fixed-income bourse Business World 17th Jun 2017
THE Philippine Stock Exchange, Inc. (PSE) and the Bankers Association of the Philippines (BAP) have signed a share purchase agreement that would double the former’s stake in the country’s fixed-income bourse, according to a disclosure on Friday.

Winds of change blow in Indonesian high yield FinanceAsia 13th Jun 2017
Investors are displaying increasing caution towards the Indonesian high yield sector where a growing new issue pipeline is butting up against historically tight yields and the weak trading performance of recent deals. The first casualty of this new attitude was Indonesia's largest private tanker operator, PT Soechi Lines, which postponed a debut 144a offering on Monday.

Banking

Central Bank to penalise unlawful use of foreign currencies The Myanmar Times 29th Jun 2017
Central Bank to penalise unlawful use of foreign currencies The Central Bank of Myanmar will soon penalise people who are using dollars to pay for local business transactions, U Win Thaw, director general of the Foreign Exchange Management Department told The Myanmar Times.

ADB Continues Support for Indonesia's Bid for More Inclusive Financial Sector The Financial 29th Jun 2017
The Asian Development Bank (ADB) has approved a $400 million policy-based loan to continue supporting the Government of Indonesia’s reforms to develop a more inclusive financial sector.

Singapore: Association of Banks updates Guidelines for Outsourced Service Providers Lexology 28th Jun 2017
On 1 June 2017, the Association of Banks in Singapore (ABS) issued an update to their “Guidelines on Control Objectives and Procedures for Outsourced Service Providers”. The update replaces the first version of these guidelines previously issued on 25 July 2015. Overall, the update involved only minor changes. Nevertheless, these changes indicate a greater emphasis on review, monitoring and control of the outsourced service providers (OSPs). OSPs should take note of this new focus as banks and other financial institutions (FIs) will likely look to these guidelines to supplement their own regulatory obligations when engaging OSPs.

BSP to roll out tighter rules on banks’ IT systems The Manila Times 28th Jun 2017
THE Bangko Sentral ng Pilipinas (BSP) said on Tuesday it would upgrade by July regulations on information technology (IT) risks in financial institutions, amid concerns over recent incidents of cyber attacks and systems glitches.

BSP set to tighten bank reporting rules, sanctions The Manila Times 27th Jun 2017
The Bangko Sentral ng Pilipinas (BSP) said it will soon release a circular intended to enhance banks’ reporting governance framework, which will impose stiffer sanctions on lenders who fail to submit timely and complete banking data necessary for policy making.

BSP to pursue reforms under new leadership philstar.com 26th Jun 2017
The Bangko Sentral ng Pilipinas (BSP) is committed to pursue liberalization initiatives as well as capital market reforms amid the scheduled changing of the guards in the central bank next week. Incoming BSP Governor Nestor Espenilla Jr. said in his speech during the cocktail reception hosted by the Bankers Association of the Philippines (BAP) his leadership would continue with reforms that have helped improved the ability of banks to absorb shocks and certain imbalances.

Indonesia to Access Its Taxpayers' Financial Data in Hong Kong finews.asia 20th Jun 2017
Indonesia and Hong Kong have agreed to share financial information giving the Indonesian tax office access to data on taxpayers who have accounts in north Asia's wealth management hub. The government of Southeast Asia's largest economy, is determined to bring back billions of dollars it believes is stashed abroad.

Smaller banks overtake giants in profit growth VietNamNet 20th Jun 2017
Smaller banks overtake giants in profit growth Although commercial banks have yet to release their financial reports for the second quarter of 2017, many of them revealed their operating results in the first five or six months of 2017. Accordingly, some small and medium-scale banks overtook the giants of the Vietnamese banking industry in terms of profit growth. Small-scale banks speed away

SGX and IMDA to help accredited companies in Singapore be IPO-ready GCIO.Asia 14th Jun 2017
The Singapore Exchange (SGX) and Infocomm Media Development Authority (IMDA) have signed a memorandum of intent (MOI) to help IMDA-accredited companies better prepare for initial public offering (IPO).

Interest rates rising, banks stablising VietNamNet 13th Jun 2017
Interest rates rising, banks stablising A number of commercial banks have been increasing promotional rates for long-term deposits by 0.1 to 0.2 per cent per annum, along with issuing additional certificates of deposit, in an attempt to safely restructure their reserves, said Vuong Duy Lam of the National Institute for Vietnam Finance under the Ministry of Finance.

US probes 1MDB links with $2.2bn energy deal Financial Times 13th Jun 2017
Misappropriated Malaysian government funds were diverted into the $2.2bn purchase of a US energy company with assets in Southeast Asia, according to US prosecutors investigating flows of money linked to troubled state investment fund 1MDB.

Interbank market to launch this year The Myanmar Times 13th Jun 2017
Interbank market to launch this year Questions raised by several international investors attending the 2017 investment forum were about the risk concerning exchange rate fluctuations. The Central Bank of Myanmar already had a plan to control it, said Daw Sandar Oo, managing director of Myanma Insurance during an interview with The Myanmar Times on June 7.

Maybank launches Asean's first FinTech ecosystem The Star Online 6th Jun 2017
Malayan Banking Bhd has given financial technology (FinTech) an additional boost with the launch of its regional, collaborative FinTech Sandbox – the first of its kind in Asean.

E-Payments

The Malaysian fintech ecosystem is on the brink of a revolution, and everyone is in on it The Independent 22nd Jun 2017
From corporates to regulators, MDEC brings together all the relevant players to help develop the Malaysian fintech ecosystem FinTech is a gamechanger; it is the kind of revolution that is shaking up the financial services industry, blurring the lines between the financial services sector and the technology sector, and causing upheaval in an industry that is generally known to be stable and rather boring.

Banks to charge fees for cashless toll road system The Jakarta Post 21st Jun 2017
Following the government’s plan to implement a fully cashless system on Indonesia’s toll roads by October this year, Bank Indonesia (BI) officials have said they are discussing a mechanism to charge citizens e-money to travel down the highways. According to Pungky Purnomo Wibowo, BI director for electronics and financial inclusion, two options are being prepared for the mechanism to collect the fees.

Big banks and fintech firms urged to work together the star 20th Jun 2017
PETALING JAYA: Big banks and fintech startups can be far more successful at improving financial services and customer experience by working together, instead of competing against one another.

OJK to Monitor Fintech Tempo 19th Jun 2017
The Financial Service Authority (OJK) has formed two new directorates as a response to financial technology (fintech) development. OJK deputy chief commissioner Rahmat Waluyanto said that the two new directorates are Digital Financial Innovation Unit and Fintech Permit and Monitoring Unit. “The directors have been appointed, but it can’t yet be announced because it’s not official yet. The Digital Financial Innovation [Unit] will handle regulatory sand box and research,” he said, as quoted by Antara last week.

BSP sets ‘hard deadline’ for EMV adoption The Manila Times 17th Jun 2017
BANKS that are not EMV-compliant have until June 30 next year to adopt the more secure chip-based technology, the central bank said. EMV is the global standard for chip-based credit and debit cards that are supposedly more difficult for fraudsters to hack into, compared with magnetic strip cards. The embedded chip contains unique transactions details that are activated each time the card is used. It is also protected by additional layers of security.

How FinTech Startups Are Transforming The Way Banks Function In Indonesia Inc42 Media 15th Jun 2017
Fintech startups in Indonesia have initiated a revolution the way financial institutions including banks in the country work. The fintech landscape of Indonesia has more or less followed the trajectory of the revolution India witnessed last year.

Mobile money flourishing in Myanmar Nikkei Asian Review 8th Jun 2017
For a population used to carrying wads of cash stuffed in pockets, purses and wallets, mobile money has the potential in Myanmar to dislodge paper as the main means to make payments and remittances.  Mobile money is a fintech service that enables money to be deposited and withdrawn using apps downloaded to mobile phones. Cash equivalents can be sent from a user's account to another person or business, and operators receive fees depending on the amount transferred. 

Insurance

Vietnam: Insurance mart grows to US$1.7 bln in Jan-May Asia Insurance Review 28th Jun 2017
The insurance sector reported growth of 19% in premium income in the first five months of this year to VND38.7 trillion (US$1.7 billion), the Insurance Association of Vietnam (IAV) says. Revenue from non-life insurance premiums was estimated at VND15.9 trillion, increasing by 9% year-on-year. Revenue from life insurance reached VND22.7 trillion, up by 30% year-on-year, reported the Vietnam News Agency citing Bui Gia Anh, IAV general secretary.

Malaysia: More innovation needed following insurance deregulation Asia Insurance Review 28th Jun 2017
Insurance companies will have to be more creative to increase sales, following deregulation of motor pricing from 1 July, says the CEO of the General Insurance Association of Malaysia (PIAM), Mr Mark Lim. He added that innovation will not be the only factor to attract consumers but also the service offered by insurers and how fast they settle insurance claims, reported The Sun Daily.

Lower House accepts health insurance proposal Eleven Myanmar 23rd Jun 2017
Dr Myint Htwe, the minister, said: “We’re holding public health assemblies in all states and regions. Last week we held in one in Ayeyawady Region and the chief minister shared the knowledge with citizens. We have done similar assemblies in seven states and regions. We will listen to people and collect ideas from those assemblies and hold a national-level seminar regarding the national health insurance system. That seminar would produce a road map.”

Lower House accepts crop insurance proposal Eleven Myanmar 22nd Jun 2017
To protect farmers from losses due to natural disasters and pests, a proposal for crop insurance has been accepted by the Lower House on June 21. MP Myo Zaw Oo of Leway Township submitted the proposal which was discussed by eight MPs and Hla Kyaw, deputy minister for agriculture, livestock and irrigation.

Indonesia: Call made for more professionals in insurance sector Asia Insurance Review 20th Jun 2017
The Indonesian insurance industry needs more professionals with knowledge of the business in order for its huge prospects to be tapped. Mr Elmira Oepangat, an insurance practitioner who was the initiator of a reunion of former employees of MLC Life Indonesia, said: "We need the right strategy to be able to reach the target market segment.”

Insurance sector revenue grows 19% vietnamnews.vn 20th Jun 2017
The insurance sector reported growth of 19 per cent in premium income in the first five months of this year, topping VNĐ38.7 trillion (US$1.7 billion), the Insurance Association of Việt Nam (IAV) said. Of the estimate, revenue from non-life insurance premiums was estimated at VNĐ15.9 trillion, increasing 9 per cent year-on-year. Revenue from life insurance touched VNĐ22.7 trillion, up by 30 per cent year-on-year, Bùi Gia Anh, IAV general secretary, told a meeting on Monday.

Insurance Companies in Indonesia Must Follow Requirement on Ultimate Shareholders Lexology 19th Jun 2017
The Indonesian Insurance Law (Law No. 40 of 2014 regarding Insurance) introduced a significant change regarding the shareholding composition of insurance companies. Breaking from previous policy, the Insurance Law specifically mandates that the local shareholders in an insurance company must be ultimately owned by Indonesian individuals. 

Singapore: Pilot done on 1st multinational cover using blockchain Asia Insurance Review 19th Jun 2017
American International Group, IBM and Standard Chartered Bank have successfully piloted the first multinational, "smart contract" based insurance policy using blockchain, a distributed ledger technology. The policy covers Singapore, Kenya and the US. The blockchain solution creates a new level of trust and transparency in the underwriting process, enabling AIG and Standard Chartered to execute multinational coverage more efficiently.

Singapore: MAS licenses first local life insurer in 47 years Asia Insurance Review 14th Jun 2017
Singapore Life Pte Ltd yesterday announced that it has been approved as a fully licensed direct life insurer by the Monetary Authority of Singapore, thus making it the first local insurer to be licensed since 1970. Singapore Life leverages the latest technologies and seeks to make the life insurance industry more efficient and accessible by empowering customers and creating a user-centric experience for all, the company says in a statement. The new insurer is born from the innovation, dependability and sophistication that defines Singapore as Asia’s favoured financial services centre.

Cambodia: Insurance mart shows robust growth in 1Q Asia Insurance Review 12th Jun 2017
Cambodia's insurance industry reported total premiums of US$36.2 million in the first quarter of 2017, up nearly 24% over the same period last year, the Insurance Association of Cambodia (IAC) has said. The Southeast Asian country has seven general insurers and six life insurers.

Myanmar readies reforms to liberalize insurance market Nikkei Asian Review 8th Jun 2017
Myanmar intends to release within three months a blueprint for insurance market reforms that include allowing foreign insurers to underwrite and sell policies, the head of state-run Myanma Insurance said here Wednesday. Managing Director Sandar Oo outlined the reforms from the Ministry of Planning and Finance, which oversees Myanma Insurance, in a presentation at Myanmar Investment Forum 2017. The event held Tuesday and Wednesday in this capital city was attended by investors from countries such as China, India and Japan.

Market Regulation

Asia's financial safety net is a work in progress Nikkei Asian Review 28th Jun 2017
In early May, the Asian Development Bank celebrated its 50th anniversary at its annual meeting in Yokohama, a port city south of Tokyo. Finance ministers and central bankers from the Association of Southeast Asian Nations, China, Japan and South Korea met on the sidelines of the event, but two men were conspicuously -- and tellingly -- absent: Chinese Finance Minister Xiao Jie and People's Bank of China Deputy Gov. Yi Gang.

New OJK Chairman Wimboh Santoso May Lower Fees for Financial Companies Jakarta Globe 28th Jun 2017
Seasoned banker Wimboh Santoso was elected the chairman of the Financial Services Authority, or OJK, for 2017-2022, beating his competitor Sigit Pramono, also a senior banker. Wimboh won 50 out of 55 votes at House Commission XI, which oversees finance and banking. He will begin his term in July, replacing Muliaman Hadad. OJK supervises Indonesia's financial sector and is estimated to be worth $1.2 trillion. It collects fees from banks and non-bank financial institutions, including pension funds and insurance companies.

Philippines SEC Adopts New Policy Requiring All Companies to Obtain a Securities Exemption for Share-Settled Awards Lexology 26th Jun 2017
However, based on a conference with the Director of the Markets and Securities Regulation Department (“MSRD”) on 2 February 2017, the SEC en banc has adopted a new policy requiring all foreign companies issuing shares pursuant to an employee share plan to obtain a confirmation of exemption under Section 10.2 of the SRC.  This means that issuances of shares pursuant to an employee share plan will no longer be considered as an exempt transaction under Section 10.1 of the SRC, even if there are fewer than 20 offerees in the Philippines within a 12-month period.  According to the Director of the MSRD, the rationale for this new policy is that the SEC wants to review the implementation of all plans in the Philippines, in order protect the interest of the employees in the Philippines.

OJK prepares smooth transition for new officials The Jakarta Post 26th Jun 2017
The Financial Service Authority (OJK) is preparing a smooth transition to welcome newly elected members of its board of commissioners. Outgoing OJK chairman Muliaman Darmansyah Hadad said the new commissioners have already visited the superbody’s office to discuss what had already been done, what was ongoing and future activities.

China’s squeeze on capital outflow felt in Cambodia Phnom Penh Post 26th Jun 2017
Stringent capital controls imposed by China’s central bank last November that scrutinise the outbound flow of money from the mainland have created uncertainty for Chinese investors looking at the Cambodian market and could jeopardise future and existing projects.

Singapore: Regulating Robo-advisors Lexology 23rd Jun 2017
On 7 June 2017, the Monetary Authority of Singapore (MAS) issued a consultation paper on the provision of digital advisory services in Singapore. The consultation paper proposes amendments to the Securities and Futures Act and the Financial Advisors Act which are the existing framework governing the provision of financial advice, to allow for the wider use of digital advisors or robo-advisors whilst ensuring that there are adequate safeguards in place. In the consultation, the MAS expressly welcomes the offering of digital advisory services to complement the existing advisory channels as it is of the view that doing so would improve consumers’ access to low-cost investment advice, in effect resulting in a greater democratisation of financial advice. This move by the MAS is evidence of its commitment to strengthening Singapore’s position as a Smart Financial Centre and is a boost to Singapore’s standing as a FinTech hub.

OJK Stops Operations of Three Investment Firms   Tempo 22nd Jun 2017
The Financial Service Authority (OJK) investment task force has stopped the operations of three investment firms. “The activities are stopped ahead of Lebaran to protect people from harmful investment,” investment task force chairman Tongam L. Tobing said yesterday. The three business entities are SMC Profit, PT Smart Global Indotama and PT Miracle Bangun Indo.

Hard to invalidate Islamic contracts, scholars say amid Dana Gas sukuk dispute Gulf-Times 22nd Jun 2017
Some of the top scholars in Islamic finance say it is difficult to declare an Islamic contract invalid because it no longer meets Shariah standards, as the UAE’s Dana Gas is trying to do with $700mn of sukuk. Scholars decline to comment specifically on the case, which Dana has filed at a court in the emirate of Sharjah. The company argues it should no longer make payments on the sukuk because the interpretation of Islamic finance standards has changed since they were issued in 2013, making them “unlawful”.

OJK launches integrated license system for Indonesian banks issuing bonds The Jakarta Post 20th Jun 2017
The Financial Services Authority (OJK) launches on Tuesday the Integrated Licensing Information and Registration System (SPRINT) for listed lenders bonds and sukuk (sharia bonds) issuance.  The SPRINT acts as a virtual single window for financial institutions to obtain certain licenses that usually require approvals from more than one supervisory commissioner of the authority. 

OJK Simplifies the IPO Process and Enhances Disclosure Lexology 19th Jun 2017
New regulations issued by the Indonesian Financial Services Authority (Otoritas Jasa Keuangan "OJK") aim to increase the number of public offerings in Indonesia by (1) shortening the regulatory review period by adopting a parallel submission process for OJK and IDX and (2) simplifying certain OJK submission requirements. In addition, new disclosure requirements are expected to further improve the regulatory landscape for offerings by enhancing the quality of disclosure to better protect investors. The new disclosure requirements generally bring the disclosure closer in line with disclosure standards in offering documents used for international tranches offered under Regulation S and/or Rule 144A of the U.S. Securities Act of 1933 ("Reg S/Rule 144A offering documents").

Liberalization of the Exchange Control Regime Lexology 19th Jun 2017
In an active effort to promote private-sector investment in Thailand, the exchange control law and regulations have been amended by the Bank of Thailand (the BOT), and became effective from 5 June 2017 onwards.

Loan Growth Hits Double Digits: OJK Chief Tempo 14th Jun 2017
The Financial Service Authority (OJK) chief commissioner Muliaman Hadad said that loan growth hit 10.39 percent in May. State-owned lender loans even grew 14 percent last month. "The economic sectors remain the same, standard. Infrastructure, construction, agriculture, and trade sectors," he said.

New regulator looking for infrastructure finance solutions- Nikkei Asian Review 13th Jun 2017
The newly-elected chairman of Indonesia's Financial Services Authority (OJK) says he wants the institution to play a bigger role in infrastructure finance by broadening the range of financing options.

New market rule to improve trading quality vietnamnews.vn 13th Jun 2017
A new rule issued by the Hà Nội Stock Exchange, allowing brokerages to become securities market members, is expected to improve the trading quality of Việt Nam’s securities market.

OJK Facilitates SMEs Into Stock Exchange Tempo 13th Jun 2017
The Financial Services Authority (OJK) will issue a regulation that makes it easier for small and medium sized enterprises or SME to register their holdings at the stock exchange. OJK Chairman, Muliaman Hadad, says that it will be published before he steps down on July. “In general, the process is simplified. [We’ll] also facilitate them, that is basically the essence of the regulation,” Muliaman said on Monday evening, June 12.

OJK Tells Financial Conglomerates to Form Holding Companies by Jan. 1, 2019 Jakarta Globe 13th Jun 2017
Indonesia's Financial Services Authority — often referred to by its acronym the OJK — has set January 1, 2019 as the deadline for banks and financial services companies in a conglomerate to consolidate themselves under a single holding entity in a move to strengthen supervision of the country's financial system.

OJK‘s Focus in Trimming Lending Rates Gradually netralnews 13th Jun 2017
Newly-elected chief commissioner of the Financial Service Authority (OJK) Wimboh Santoso has pledged to focus on improving the bodys performance. "We will first focus on improving the OJK's efficiency as part of the effort to increase its performance," Wimboh Santoso said here on Friday.

OJK to Revise Loan Growth Target Tempo 12th Jun 2017
Chief commissioner-elect of the Financial Service Authority (OJK) Wimboh Santoso said the agency may revise loan growth target for this year. According to him, the target of 12 percent relies heavily on the real sector. "There should be economic activities. An intervention is need? As far as OJK concerned, [the process of obtaining] permits must be expedited to create demand," he said last week.