Financial Services Update: Philippines to Launch Capital Market Reforms

Financial Services Update| October 19, 2017
Authors: Shay Wester, Ian Saccomanno, and Natalie McDaniel
 
LOOKING AHEAD
 
 

October 30- Farewell Luncheon for H.E. Pisan Manawapat, Thai Ambassador to the United States Over the past two and a half years, Ambassador Pisan and the Royal Thai Embassy have shown great dedication and commitment to deepening all aspects of U.S.-Thailand relations. We hope you will join us in honoring the Ambassador and wishing him the best of luck in his future endeavors. For more information, please contact Ella Duangkaew at eduangkaew@usasean.org.

October 31- Financial Services Committee CallPlease join us for a Financial Services Committee Call to discuss the agenda for the rest of the 2017, begin preparations for the 2018 ASEAN Finance Minsters and Central Bank Governors Meeting, and to review other potential future work.

November 8 - ASEAN Capital Market Conference: The Council is pleased to extend an invitation from the ASEAN Capital Markets Forum for its inaugural conference on strengthening capital market connectivity in ASEAN. The event will be hosted in Kuala Lumpur on November 8. An agenda may be found at this link. Please email the ACMF Secretariat at acmfsecretariat@seccom.com.my with your name, title, organization, contact information, and dietary restrictions to request registration.

November 28- December 1- 34th International Conference on the Foreign Corrupt Practices ActThe American Conference Institute's 34th International Coinference on the Foreign Corrupt Practices Act attracts 600+ participants from across the globe, and routinely includes a 100+ speaker faculty of experts based in the United States, the EU, Latin America, Asia and Africa. Speakers include senior government officials, industry executives and legal experts involved in some of the most high profile enforcement matters to date.

 
THE COUNCIL'S TAKE
 
 

Philippines to Launch Capital Market Reforms in November

In November, the Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, plans to launch a peso debt market development roadmap aimed to establishing an integrated financial market in the country. The agenda will initially focus on benchmark markets and includes an 18-month time frame with specific targets for regulatory and institutional milestones. The market agenda reform roadmap is specifically aimed at increasing the volume of treasury bills, developing a systematic set of obligations, rights and incentives for market markers, and providing stable, predictable and transparent issuance of government securities. The roadmap will include three main operational priorities, deepening the local bond market by adopting reforms in the government securities eligible dealer (GESD) system, increasing supply of short-term securities and developing an effective framework on derivatives and repo markets. The BSP also hopes that a peso debt market will also create a reliable financial benchmark and establish an integrated financial market infrastructure for corporate debt and infrastructure bonds. Infrastructure bonds will be important for funding future infrastructure development.

ACMF Closes ASEAN Trading Link

The ASEAN Capital Markets Forum (ACMF) closed the ASEAN Trading Link (ATL) on October 6. One of the ACMF’s flagship projects created to better connect ASEAN’s capital markets, the ATL was meant to promote growth and integration in ASEAN’s capital markets by allowing traders to buy large cap stock across all of them. The initial phase linked Singapore, Malaysia, and Thailand, but would have eventually been expanded to include all of ASEAN’s markets. The ATL was never widely adopted by traders who preferred to deal with each market individually instead of working through the ATL’s procedures. The ACMF had long recognized that the ATL was not meeting expectations and had earlier consulted with the Council and carried out a series of studies with the Asian Development Bank to find strategies to improve the program. The Council, as well as other stakeholders, had argued that the system did not integrate the markets closely enough. Despite the ATL’s promise and good intentions, the need for local sponsoring brokers instead of third-party clearing, unintegrated settlement processes, and high trade latency meant the system was not competitive with the Direct Market Access platforms of institutional brokers. Despite this setback, the ACMF is continuing to look for ways to expand and integrate the region’s capital markets and will host a conference to discuss its work on November 8 in Kuala Lumpur, Malaysia.

Thailand Publishes New Payment Systems Act

On October 18, Thailand published the new Payment Systems Act in the Government Gazette, consolidating and reforming the existing laws on payment systems and services. The Act, which can be found here, had been passed by the National Legislative Assembly in August and will enter force in February 2018. Under the new law, electronic payment systems and businesses will be reclassified into three new groups: 1) important e-payment systems, 2) supervised e-payment systems, and 3) supervised e-payment services. Criteria for the supervised e-payment systems and services will be created in an ensuing Ministry of Finance regulation. Current business operators will need to reapply for registrations or licenses if their businesses fall under these currencies. The Bank of Thailand (BOT) will be the key regulator of the new Act and will supervise the operation of payment systems and services, while the Electronic Transaction Commission will supervise information technology security standards. The law will grant the BOT authority to announce rules and regulations regarding minimum financial status and performance, business operation standards, good governance, risk management, outsourcing, collecting and disclosure of a customer’s personal data, customer protection, and security systems while also giving it the authority to assess business operations and issue business license suspensions and criminal and administrative penalties for non-compliance. The changes should ultimately lead to a more streamlined licensing and compliance procedures for business, ideally supporting the development of e-payment services as part of the Thailand 4.0 development policy.

Thailand Developing New Act on Conducting Business with FinTech

While completing the new Payment Systems Act, Thailand has also begun developing a new Act governing fintech businesses more broadly. The bill seems to focus on some of the challenges fintech development has faced in Thailand. Thai regulators began the country’s work to enable and regulate digital finance in late 2016, issuing new regulations and creating a regulatory sandbox, but Thailand does not yet have a law that covers fintech issues. Some components of this Act would address gaps and concerns not addressed in the previous regulations, such as digital signatures and cybersecurity. Know Your Customer procedures and due diligence will be permitted to be done electronically; and in situations where this is required, government entities that possess the required customer data must provide it to financial service provider. The law would also allow companies to request anonymized data from the government for research and development. The bill also clarifies that electronic business transactions using the procedures and technologies covered by the rules will be deemed lawful, eliminating a legal grey zone. The bill is being drafted by a committee led by former secretary-general of the Securities and Exchange Commission (SEC) Vorapol Socatiyanurak, which includes the SEC, the Bank of Thailand, commercial banks, and the Thai Fintech Association (TFA). Local industry groups, including the TFA, hope the bill will help strengthen the competitiveness of local firms against foreign companies and support the overall development of the Thai fintech industry. A draft of the bill may be found here (in Thai). The draft was circulated for public consultations in September and is moving forward to final drafting.

 
ADVOCACY UPDATE
 

Call for Input on Bank Negara Malaysia's Exposure Draft on Outsourcing

The Council is gathering input to submit comments on Bank Negara Malaysia's new Exposure Draft on Outsourcing. The regulation has been in development for several years and the Council has in the past urged BNM to accelerate the development process as the lack of updated regulations have been interfering in the ability of banks to outsource services, especially information technology services.

The announcement indicates BNM is concerned about risks emerging from the banking industry's increasing reliance on shared services and infrastructure and is worried that banks' reliance on third parties may interfere with BNM's ability to implement recovery and resolution plans.

The full draft of the outsourcing regulations may be found here. Please submit your initial comments by October 27 to Ian Saccomanno at isaccomanno@usasean.org. A full draft of comments will then be circulated for further review.

Updates on Indonesia's Data Center Localization Regulation

On October 17, the Council met with Indonesian ICT Minister Rudiantara to discuss the expected revisions to GR82 and the upcoming over-the-top (OTT) services regulations. The GR82 revision draft is still in development, despite GR82 now being due for implementation. Minister Rudiantara indicated that the current draft would focus on localizing government-related data, dividing data into three categories:
1. Strategic – Data must be stored and processed in the territory of Indonesia. Intended for security, intelligence, national IDs, and military.
2. Important – Data must be accessible to law enforcers within a couple of days when required. Storage and processing can be anywhere.
3. Low – No requirements
The draft is still awaiting input from the various sectoral regulators and it would also be possible for sectoral regulators to themselves declare data to be strategic under the current draft. The draft will be issued by the end of the month and there will be a period for public consultation. The Council intends to submit comments on the new draft when it is issued.

 
IN THIS UPDATE
 
 
Market Development
Philippine Stock Exchange in talks with Shenzhen bourse on investment
Thailand to use blockchain technology to boost corporate debt market
Singapore investors channeling private equity to Myanmar SMEs
Indonesia set to test demand for Komodo bonds
Consumer finance lures foreigners
Vietnam's finance industry grows strongly
Vietnamese bond market needs enlarging
Laos prints its largest, longest sovereign bond issue
Vietnam says bad debts under control
Capital market reforms to be launched in November

Asset Management
Nasdaq Signs Collaborative Agreement With Singapore Exchange
Vietnam should learn from Vincom’s speedy listing
PE in Indonesia – a vibrant market
Vincom set to raise up to $680m in record Vietnam IPO
Singapore Exchange eyes more DLC products
Indonesia investigates StanChart over S$1.91 billion transfer
Laos extends curve to 15 years, seals largest bond
Islamic capital market faces good growth prospects
Financial assets in Southeast Asia grow, but debt build-up a concern

Banking
Central Bank of Myanmar approves loans without collateral
“King bank shares” return
Insurers, bankers banking on each other
After almost a year, Duterte fulfills OFW bank promise
Islamic banking ‘bright’ for Malaysia, outperforming overall loans, says BMI Research
Indonesia’s digital retail banking penetration set to hit 60% by 2020: Solidiance
Singapore Regulator, Banks Complete KYC Blockchain Prototype
National bank confirms riel requirements for loans
Southeast Asia Banks Urged to Amend Environment Policy
Banks urged to serve low earners
With Digibank app, Singapore's DBS takes on Alipay
Some cryptocurrency firms had their Singapore bank accounts closed

E-Payments
Pi Pay links to first bank in step towards fully cashless platform
Cambodia's First Bitcoin Point-of-Sale System Debuts Amid Currency Debate
VN banks rush to cash in on digital wallet
Singapore, Thailand discuss e-payment alliance for digital push
CBM licensing procedures in the spotlight in Yangon
Bank Indonesia suspends unlicensed e-wallets
Singapore government mulls laws on e-payment fees
‘Wave-to-pay’ technology now more commoN
Singapore Tests Blockchain Payments for 19,000 Unbanked Migrants
Procurehere enables businesses to unlock value by adopting e-procurement
Kingdom’s prospects for fintech discussed
More Vietnamese using electronic payments: Visa
Malaysia Signs A Series Of Cooperation Agreements

Insurance
Markel Rolls Out Fintech Insurance in Singapore
Thailand: New Risk Management Regulation for Insurance Companies to Take Effect in February 2018
Insurance firms chafe at liberalisation delay
AIA not talking to anyone on stake sale
FWD rolls out US dollar-denominated investment-linked insurance
Myanmar: Govt ready to issue more insurance licences
Old-timer OAC adopts Great Eastern name
Singapore's DBS Group Inks Regional Insurance Distribution Deal With Chubb

Market Regulation
SEC seeks authority to access bank records
Debt trading firm in line for a makeover: Finance Ministry
AMBD signs MoU with National Bank of Cambodia
BSP to launch more market reforms next month
AMBD established complaints handling function within financial institutions
Singapore: MAS sets up international advisory panel for cybersecurity
Vietnam to set new security regulation on e-trading
 
ARTICLE CLIPS
 
 
Market Development

Philippine Stock Exchange in talks with Shenzhen bourse on investment Nikkei Asian Review 17th Oct 2017
The Philippine Stock Exchange is in talks with its counterpart in Shenzhen in China over a potential investment, as one of Southeast Asia's smallest bourses moves to raise capital and expand its investor base. Discussions are still "very preliminary," PSE President and CEO Ramon Monzon told reporters on Monday after revealing the talks during his speech at the annual meeting of the Shareholders' Association of the Philippines. PSE, the Philippines' sole stock trading platform, is inviting the Shenzhen Stock Exchange to participate in the sale of shares to partly fund its merger with the PDS Group, the country's lone fixed-income exchange.

Thailand to use blockchain technology to boost corporate debt market Global Capital 12th Oct 2017
The leading players in Thailand’s bond market are looking at incorporating blockchain technology to increase efficiency and help it develop its undersized corporate debt market, according to the head of the country’s Bond Market Association. Tada Phutthitada said that although the kingdom’s bond market had grown sharply since the Asian financial crisis, the corporate bond market accounted for less than 20% of GDP — considerably lower than some of its south-east Asian neighbours. He said the BMA was putting its focus on developing the corporate debt market.

Singapore investors channeling private equity to Myanmar SMEs The Myanmar Times 11th Oct 2017
Credera Group, a Singapore private equity (PE) firm, is raising a $100 million PE fund to invest in greenfield ventures in the finance, manufacturing and consumer product sectors in Myanmar, according to DealStreetAsia. The PE firm is currently in advanced talks with stakeholders in those areas and “a lot of the deals are getting closer to fruition,” Gaurav Manghnani, CEO of Credera Group was reported as saying.

Indonesia set to test demand for Komodo bonds BusinessMirror 11th Oct 2017
If India’s experience of selling local-currency notes in the overseas market is anything to go by, Indonesia’s plan to issue Komodo bonds may not be all plain sailing. The  sovereign is mulling a sale of offshore rupiah-denominated bonds, and three state-owned infrastructure companies are considering issuance in coming months. A narrow investor base and fluctuations in the rupiah may be concerns for investors in these new notes, which President Joko Widodo has named after Komodo dragons, the big lizards found in eastern Indonesia. Some foreign funds say the bonds would give good exposure to Indonesia, where the prospects for economic growth and the fiscal situation are improving, as long as they’re compensated enough. In India the first Masala bond sale took almost a year since the central bank  approved the new issuance as issuers were reluctant to pay a premium for overseas borrowing in rupees.

Consumer finance lures foreigners Viet Nam News 10th Oct 2017
Consumer finance is proving to be an attractive sector with the number of foreign companies rising through mergers and acquisitions, the news site cafef.vn reported. In late September, the Việt Nam Technological and Commercial Joint Stock Bank (Techcombank) reportedly sold its stake in the financial arm TechcomFinance to the South Korean credit firm Lotte Card, a member of Lotte Group, for 87.5 billion won or VNĐ1.73 trillion (US$76.9 million). After being purchased by Techcombank in January 2015 from the Việt Nam National Chemical Group (Vinachem), TechcomFinance has VNĐ600 billion in charter capital.

Vietnam's finance industry grows strongly Vietnam Net 10th Oct 2017
The finance, banking and insurance industry expanded 7.89 per cent in the first nine months of this year, the highest level recorded in the past seven years. Reports of the General Statistics Office (GSO) revealed that the growth rate of the industry was 6.99 per cent in 2011, 5.97 per cent in 2012, 6.68 per cent in 2013, 5.39 per cent in 2014, 6.7 per cent in 2015 and 7.38 per cent in 2016. As for insurance, the GSO reported that the insurance market maintained positive growth. Total premiums for the whole market in nine months were estimated to swell 18 per cent year-on-year, of which life insurance premiums increased more than 22 per cent.

Vietnamese bond market needs enlarging vietnamnews.vn 5th Oct 2017
Prime Minister Nguyễn Xuân Phúc has approved a roadmap for bond market development in the next three years, with a vision to 2030, under which the ratio of outstanding bonds to Gross Domesrtic Product (GDP) is expected to be 45 per cent of in 2020 and 65 per cent in 2030.

Laos prints its largest, longest sovereign bond issue Kitco News 5th Oct 2017
The Lao People's Democratic Republic successfully completed its largest and longest bond issue, with a 14 billion baht ($419 million) six-tranche offering in the Thai debt capital markets. Not only did the sovereign offering beat the 12 billion baht issue Laos completed in 2015, but it also pushed out its curve to 15 years from 12, and printed the largest tranche at the longest tenor, showing Thai investors' positive long-term view on the credit.

Vietnam says bad debts under control vietnamplus.vn 27th Sep 2017
Nonperforming loans (NPLs) must be revolved at the earliest, especially in the banking and financial sector, in order to strengthen Vietnam’s economy, ensure efficiency and boost effectiveness in capital allocation, a World Bank Group (WBG) official told a seminar on September 26. Speaking at a workshop on Vietnam’s bad debts, Nguyen Phi Lan, Acting Deputy Director General of the Department for Banking System Safety Supervision under the State Bank of Vietnam (SBV), stated that on the whole, most bad debts had been resolved and its current ratio stood at 2.55 percent of outstanding loans.

Capital market reforms to be launched in November Inquirer 26th Sep 2017
The government will launch in November the peso debt market development roadmap aimed at establishing an integrated financial market in the country. “The capital market reform agenda will initially focus on benchmark markets. The reforms will be undertaken over an 18-month time frame from launch in November with specific targets for regulatory and institutional milestones. Deliberately, we sequenced and calibrated the roadmap to ensure that urgent and foundational issues are prioritized,” Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla Jr. said in a speech at the joint general assembly of the Money Market Association of the Philippines, ACI Financial Markets Association Philippines, Trust Officers Association of the Philippines, Fund Managers Association of the Philippines, Investment House Association of the Philippines and National Association of Securities Broker Salesmen Inc.

Asset Management

Nasdaq Signs Collaborative Agreement With Singapore Exchange NASDAQ 18th Oct 2017
Nasdaq Inc. ( NDAQ ) and Singapore Exchange (SGX) Wednesday announced the signing of a collaborative agreement to leverage their strengths in the U.S. and Asia respectively. Nasdaq and SGX said they are currently exploring the demand among corporates for a concurrent or sequential listing on both exchanges.

Vietnam should learn from Vincom’s speedy listing Global Capital Asia 17th Oct 2017
Vincom’s plan to raise D15.4tr ($677.9m) is going to be a landmark, the biggest deal the country has ever seen. But perhaps more impressive is that the privately-owned company is planning to take an efficient, investor-friendly approach with the deal. It will list its stock within two weeks after closing the IPO. Unusually, it is listing its shares ahead of transferring them to investors, but the latter process should only take a few days. This is dazzlingly quick for Vietnam’s domestic stock market, where time all too often appears to be measured in seasons.

PE in Indonesia – a vibrant market JD Supra 16th Oct 2017
Indonesia is gaining popularity among both regional and international private equity funds. Demographics and economic forces increasingly portray Indonesia as a 'must-be-in' market. Modern Indonesia is more than Bali and volcanoes – it is a country undergoing significant macroeconomic and population changes which are driving increased attention from private equity funds around the world.

Vincom set to raise up to $680m in record Vietnam IPO Financial Times 16th Oct 2017
Vietnam’s stock exchange is preparing for its biggest initial public offering after bankers selling mall operator Vincom found a way around a technical restriction that prevented big IPOs in the past.  Vincom will raise between $620m and $680m in a listing in November — more than twice as much as any previous IPO on the Ho Chi Minh stock exchange — based on a pricing range agreed on Monday.  The IPO promises a windfall for private equity group Warburg Pincus. The price range would mean that Warburg Pincus’s 4.8tn dong ($211m) investment will more than double in value after the IPO, with the group expected to reduce its ownership from 15.2 per cent to 4.89 per cent. Credit Suisse’s Singapore branch is set to achieve a similar gain on its 1.6tn dong ($70m) investment, along with local investors.

Singapore Exchange eyes more DLC products Asian Asset Management 12th Oct 2017
The Singapore Exchange (SGX) is looking to offer more daily leverage certificate (DLC) products following strong investor interest since their launch in July. DLCs, also known as constant leveraged products or factor certificates, allow investors – mainly the local retail market-- to capture leveraged returns on daily market moves. "We are exploring launching DLCs with higher leverage as well as DLCs on single stocks. Furthermore, after the initial success there could be more issuers that want to list DLCs on SGX," Luuk Strijers, head of products, equities and fixed income at the bourse, says in an emailed reply to questions from Asia Asset Management.

Indonesia investigates StanChart over S$1.91 billion transfer TODAYonline 10th Oct 2017
Indonesia is investigating reports that US$1.4 billion (S$1.91 billion) held by Standard Chartered Plc in Guernsey, mainly on behalf of Indonesian clients, was transferred to Singapore just before the island moved to new tax transparency rules, tax and regulatory officials said. The Monetary Authority of Singapore (MAS) and Guernsey's Financial Services Commission were looking into that movement of assets in late 2015 — months before the Channel Island adopted a global framework for the exchange of tax data.

Laos extends curve to 15 years, seals largest bond Global Capital Asia 6th Oct 2017
The Lao People's Democratic Republic, through the Ministry of Finance, raised Bt14bn ($420m) this week from a six-tranche bond in Thailand-- its largest ever print. The sovereign also managed to push out its curve to an unprecedented 15 years, leveraging on Thai investors' familiarity with its credit. Thailand's credit market has faced challenges since the beginning of the year because of high profile defaults from the likes of Energy Earth, according to a banker close to Laos' deal.

Islamic capital market faces good growth prospects The Star Online 4th Oct 2017
The global Islamic funds market faces favourable prospects as several growth drivers are expected to bring it to the next stage of development. According to Zainal Izlan Zainal Abidin, managing director, development & Islamic markets at Securities Commission Malaysia, global Islamic assets under management amounted to US$70.8bil and the number of Islamic funds stood at 1,5353 as at the end-Q1 2017. "Malaysia accounted for 28.5% of the total Islamic funds, followed by Saudi Arabia and Luxembourg with 15.3% and 13.9% respectively. Comparatively speaking, this has been a significant improvement considering that in 2008, there were only 802 funds with AUM of US$47 billion," he said.

Financial assets in Southeast Asia grow, but debt build-up a concern Asia Asset Management 29th Sep 2017
Financial assets in four Southeast Asian countries – Singapore, Thailand, Malaysia and Indonesia – collectively grew 8% to 20.41 trillion euros (US$24 trillion), from 18.8 trillion euros in 2015, but “dangerously high” debt ratios similar to levels in the US before the global financial crisis is a concern, according to a new report from German insurance and asset management company Allianz. The pace of growth of financial assets is double the 4% increase between 2014 and 2015, the company says in its Allianz Global Wealth Report 2017 released September 27. It does not provide data for other Southeast Asian countries.

Banking

Central Bank of Myanmar approves loans without collateral The Myanmar Times 16th Oct 2017
“The Central Bank of Myanmar (CBM) has allowed local banks to provide loans without movable and resalable assets as collaterals provided the banks set the suitable risk management policies in place. The loan process will become complete when the banks can implement proper risk management,” U Set Aung said. The development should serve as a welcome reprieve for many cash-strapped SMEs. In Myanmar, access to funds is the main barrier in the way of growth and development of small and medium enterprises (SMEs). This is because loans issued to businesses are approved based on collateral –typically property or land - and are mostly over periods of just one year.  As such, relaxing the loan collateral system is necessary to help more SMEs qualify for loans. 

“King bank shares” return VietnamNet 13th Oct 2017
Bank shares, called ‘king shares’, have seen prices escalate to record highs after a period of decline.  Analysts say the time of the king share has returned. Nearly 650 million shares of LienVietPost Bank (LPB) have been put into transactions on UpCom market since October 5. With the reference price level of VND14,800 per share, the bank has capitalization value of VND9.5 trillion, ranking 10th among listed banks. LienVietPost Bank is the bank with the largest network in Vietnam with 130 branches and transaction points in 63 provinces/cities and 1,000 post transaction offices. 

Insurers, bankers banking on each other Customs News 12th Oct 2017
Touting it as a win-win deal for everyone, banks and insurance companies in Vietnam are promoting the “bancassurance” model to exploit a market with huge untapped potential. Globally, the co-operation between commercial banks and insurance companies to supply banks’ clients with insurance policies is already an established trend. It is seen as creating a professional, convenient and reliable sales channel for insurance policies. A number of large banks in Vietnam have been entering deals with insurance companies, offering insurance products or insurance benefits to the banks’ customers, with both sides taking their share of commissions.

After almost a year, Duterte fulfills OFW bank promise GMA News Online 9th Oct 2017
President Rodrigo Duterte has signed an executive order converting the Philippine Postal Savings Bank into a bank that will deliver microfinance and micro-insurance products and services for the overseas Filipino workers. Through Executive Order No. 44, the PPSB will be acquired by the Land Bank of the Philippines and will be converted into the Overseas Filipino Bank. "Overseas-based Filipinos, who contribute to the country's foreign exchange income, currency stability, employment, and overall economic growth through their remittances should be given provision of priority support for their growing financial needs," the EO read.

Islamic banking ‘bright’ for Malaysia, outperforming overall loans, says BMI Research Malay Mail Online 5th Oct 2017
Islamic banking in Malaysia is continuing to be a “bright spot” for the banking industry here, with Islamic banking loans outperforming overall loans in the country over the past several years, BMI Research said today. In its latest industry analysis, BMI Research said that Islamic banking’s share in the overall banking system now stands at 29 per cent, significantly higher than the 16.8 per cent share it had back in 2010.

Indonesia’s digital retail banking penetration set to hit 60% by 2020: Solidiance Digital News Asia 5th Oct 2017
With about 260 million people, Indonesia poses a tremendous opportunity for digitalisation in banking. Solidiance's latest “Digital Evolution in Indonesia’s Banking Industry” white paper shows that several local retail banks have started to digitise their business processes, but many still remain focused on enabling only basic customer transactions. According to the report, only 36% of Indonesia’s population is connected to formal financial institutions, leaving an estimated 150 million citizens unbanked and open for financial technology (fintech) solutions.

Singapore Regulator, Banks Complete KYC Blockchain Prototype CryptoCoinsNews 4th Oct 2017
A consortium comprising of a Singaporean government body and a number of major banks has completed the ASEAN region’s first-ever proof-of-concept for a Know Your Customer (KYC) blockchain. The Infocomm Media Development Authority of Singapore (IMDA), the country’s information communications and media regulator, has collaborated with a number of major banks to deliver the first regional Know Your Customer (KYC) blockchain proof-of-concept.  Banking giant HSBC, Japan’s largest bank – Mitsubishi UFJ Financial Group (MUFG) and OCBC Bank are all participating banks in the consortium.

National bank confirms riel requirements for loans Khmer Times 3rd Oct 2017
The National Bank of Cambodia (NBC), the country’s central banking authority, confirmed yesterday that it will make no changes to recently-issued requirements pertaining to the proportion of loans in the local currency that banking institutions need to exhibit in their loan portfolios. NBC’s Director General Chea Serey, speaking during a meeting with representatives of the banking industry yesterday, said the banking authority will enforce the requirements as originally conceived, without any delays or substantial changes.

Southeast Asia Banks Urged to Amend Environment Policy Bloomberg.com 2nd Oct 2017
Banks and regulators in Southeast Asia should strengthen financial-sector rules and guidelines to promote funding for environment-friendly projects in a region threatened by deforestation and climate change, the World Wildlife Fund said. Measures to promote sustainable finance in the region are “high level,” and don’t involve the incentives or penalties which would get banks to properly integrate environmental policies into their lending practices, the WWF said in a survey of 34 large Southeast Asian banks published on Tuesday. The region’s banks have “significant leeway” to decide which environmental risks are material, the report said.

Banks urged to serve low earners Viet Nam News 1st Oct 2017
Việt Nam has significant room to promote inclusive finance, given 70 per cent of its population is living in rural areas and many are locked out of the conventional banking system due to low income, experts have said. However, there were challenges in making banking products and financial services available to the low-income population, especially those living in remote areas, such as poor infrastructure system and preference for cash.

With Digibank app, Singapore's DBS takes on Alipay Nikkei Asian Review 27th Sep 2017
DBS Group Holdings is expanding its reach in emerging Asian economies with its banking app, Digibank, taking on the likes of internet giants such as Alibaba Group Holding hoping to capture a fast-growing universe of mobile users. Victor Davis, a 28-year-old who runs a marketing consultancy in Jakarta, is an example of these companies' target audience. Davis said he downloaded the DBS Digibank smartphone app after seeing an advertisement. It took him minutes to register and within a day or so, a bank agent visited to verify his identity. Without setting foot in a bank branch which normally meant standing in a line for ages or getting stuck in a traffic jam, Davis had a working bank account. "The whole process was very fast and straightforward," he said.

Some cryptocurrency firms had their Singapore bank accounts closed The Straits Times 26th Sep 2017
Singapore banks have closed accounts of several firms which specialise in providing cryptocurrency and payments services, according to two local bodies which represent financial-technology firms. Noting that cryptocurrency firms have had similar problems with banks in other countries, the head of Singapore's Cryptocurrency and Blockchain Industry Association, or Access, asked the Government to step in. "From our analysis, it appears to be common among leading FinTech hubs," Access chairman Anson Zeall said in an e-mailed statement. "If this is the case, we would urge Singapore to take a leadership role and demonstrate how to come to an effective resolution among all parties."

E-Payments

Pi Pay links to first bank in step towards fully cashless platform Phnom Penh Post 12th Oct 2017
Mobile payment platform Pi Pay announced yesterday that it has signed an agreement with ABA Bank that allows the bank’s customers to seamlessly transfer money between their mobile wallet and ABA accounts, a move the company describes as a milestone toward creating Cambodia’s first fully cashless digital wallet not tied to a specific bank. Tomas Pokorny, CEO of Pi Pay, said the partnership was a “very big step” for the fledgling company that aims to utilise financial technology, or fintech, to promote financial inclusion and eliminate the need for customers to carry cash.

Cambodia's First Bitcoin Point-of-Sale System Debuts Amid Currency Debate Bitcoin News 12th Oct 2017
Quietly, Cambodia has racked up solid economic gains now spanning more than a decade. Inflation is down. Major global economic metrics point to it lifting all boats, including its very poor. At least part of its growth has come due to allowing foreign investment, which include repopulating rice from the Philippines to a domestic culture familiar with wide varieties of tourists. With investment and tourism comes currencies, and with them the need for exchange and pricing structures.

VN banks rush to cash in on digital wallet Vietnam Net 9th Oct 2017
On September 13 Samsung launched its mobile payment service, “Samsung Pay”, in partnership with the National Payment Corporation of Viet Nam (NAPAS). Like Samsung, Apple also plans to bring its digital wallet, “Apple Pay”, to Viet Nam soon. At the Mobile World Congress held in Barcelona, Spain, earlier this year, Viet Nam’s military-owned telecom group Viettel also introduced many of its telecom-based apps and gadgets for a smart society, including the V-Wallet, which is also expected to come to the country soon.

Singapore, Thailand discuss e-payment alliance for digital push The Straits Times 5th Oct 2017
Singapore and Thailand are in discussions about connecting their national digital payment systems to forge an unprecedented regional alliance, as officials step up efforts to curb the use of cash. The link would bring together Southeast Asia's first national digital-payment platforms, Singapore's PayNow and Thailand's PromptPay, said Naphongthawat Phothikit, director of payment systems policy at the Bank of Thailand.

CBM licensing procedures in the spotlight in Yangon The Myanmar Times 5th Oct 2017
The Central Bank of Myanmar (CBM) should allow financial organisations including fintech companies to operate only after confirming that their business models are credible and licensed, said MP Daw Sandar Min from Seikgyi Khanaungto township during a Yangon Region Parliament session on October 3. The issue was brought up after fintech company Ok Dollar was given a Mobile Financial Services (MFS) license by the CBM in August, one year after it started operating, and raises questions on the Central Bank’s licensing procedures.

Bank Indonesia suspends unlicensed e-wallets Nikkei Asian Review 5th Oct 2017
Leading Indonesian e-commerce startups have had to partially suspend e-wallet operations until they are granted a license by the central bank, as the growing popularity of the electronic services attracts greater regulatory scrutiny. These include Tokopedia, which recently announced it will raise $1.1 billion from Alibaba Group Holding and other investors; Shopee, a unit of Singapore-based Sea, which recently filed for an initial public offering in New York; and the popular Bukalapak local platform.

Singapore government mulls laws on e-payment fees ZDNet 4th Oct 2017
The Singapore government may be eager to drive e-payment adoption in the country, but it appears to want to do so through encouraging market competition, instead of introducing legislation to bring down surcharges for e-payments. Deputy Prime Minister Tharman Shanmugaratnam, who also was Minister-in-Charge of the Monetary Authority of Singapore (MAS), said the government was assessing the impact of laws regulating e-payment fees in other countries. across the region.

‘Wave-to-pay’ technology now more commoN VietnamNet 4th Oct 2017
Non-touch electronic payment methods in Vietnam, including contactless cards or payment by phone scanning, are being applied widely in large cities. More than 5,000 ATM (auto telling machine) card holders of six commercial banks, VietinBank, Vietcombank, BIDV (the Bank for Investment and Development of Vietnam), Sacombank, Shinhan Vietnam Bank and AB Bank have begun trying Samsung Pay, a new payment solution.  When paying for goods, customers put their phones next to POS without touching it and the transactions will be completed.

Singapore Tests Blockchain Payments for 19,000 Unbanked Migrants Cointelegraph 4th Oct 2017
A Singapore bank has signed an agreement which will see Blockchain payments help up to 19,000 migrants transact without banking access. As local news outlet Business Times reports Wednesday, Maybank Singapore will leverage native startup InfoCorp Technologies’ CrossPay network to allow migrants in a giant dormitory to pay for purchases digitally. CrossPay uses Blockchain for storing consumer identities and includes a private platform for making payments. At the other end, Maybank will settle the final amount with dormitory operator TS Group.

Procurehere enables businesses to unlock value by adopting e-procurement Digital News Asia 2nd Oct 2017
BUSINESSES in Malaysia and the world can now unlock more value by adopting e-procurement. Privasia Sdn Bhd, a subsidiary of information technology outsourcing and consultation company Privasia Technology Bhd, recently officially launched its standalone e-procurement application Procurehere to automate procurement processes and propel business excellence globally.

Kingdom’s prospects for fintech discussed Phnom Penh Post 2nd Oct 2017
While financial technology, or fintech, has made little traction so far in Cambodia, panellists at a conference in Phnom Penh on Friday expressed confidence that the sector was poised for rapid growth. Speaking at the Inspire Asean event, Tomas Pokorny, CEO of mobile payment platform Pi Pay, insisted Cambodia was ready for a rapid uptake of digital services.

More Vietnamese using electronic payments: Visa Vietnamnews 27th Sep 2017
Vietnamese consumers are continuing to embrace electronic payments making 38 per cent more transactions in the year ended June 2017, Visa said in a release on Wednesday. Following its latest study, the company said the numbers of its credit and debit card transactions were up 49 per cent and 34 per cent and payment value, 35 per cent. More Vietnamese are also shopping online and its e-commerce transactions and payment volume were up 82 per cent and 45 per cent, it said.

Malaysia Signs A Series Of Cooperation Agreements The National Law Review 26th Sep 2017
On 14 September the Securities Commission Malaysia (SC) announced that it has signed a series of FinTech cooperation agreements with several regulators in major financial centres.

Insurance

Markel Rolls Out Fintech Insurance in Singapore finews.asia 17th Oct 2017
Specialist insurer Markel International unveiled a new product designed to protect fintech startups in Asia against potential claims from clients. The policy has already been on offer in the U.K. Markel International rolled out the policy for financial technology firms in Singapore, Asia's leading fintech hub, having first launched it in the U.K. earlier this year. Simon Moi will act as senior underwriter at Markel's branch in Singapore,the company said in a statement today.

Thailand: New Risk Management Regulation for Insurance Companies to Take Effect in February 2018 Lexology 16th Oct 2017
The Office of the Insurance Commission (OIC) has issued notifications applicable to life and non-life insurance companies, which are intended to emphasize the importance of internal risk management in insurance companies. The notifications were published in the Government Gazette on September 1, 2017, and will take effect 180 days later on February 28, 2018.

Insurance firms chafe at liberalisation delay Frontier Myanmar 13th Oct 2017
In 2012, state-run Myanma Insurance lost its monopoly and the government announced plans for liberalisation in the sector. Five years later, the insurance industry is still waiting for significant change – but officials say a reform plan is complete and will soon be implemented. For now, the market remains immature and fragile due to tight restrictions that domestic insurers say are inhibiting competition. Foreign companies, meanwhile, are still waiting to learn if they will be permitted to operate on their own or be required to form joint ventures. The government’s decision to reform the sector in cooperation with domestic and foreign insurers was aimed at addressing the low rate of insurance cover in Myanmar. Allowing in foreign insurers would also attract investment and provide a new market for government bonds and securities.

AIA not talking to anyone on stake sale The Star 9th Oct 2017
AIA Group Ltd, one of the leading pan-Asian life insurance groups, dispelled speculation that the company is reducing its stake in its operation in Malaysia. The leading insurer said it is not in discussion to reduce its stake in AIA Malaysia. “There is no conversation. That’s all I can say. Obviously, we are very careful with any confidential conversation, not only in Malaysia but others as well. But in this case (on AIA Malaysia), there is no conversation. Anywhere we operate in, we want to own as much as we can,” AIA Group chief executive and president Ng Keng Hooi told StarBiz.

FWD rolls out US dollar-denominated investment-linked insurance http://business.inquirer.net/238102/fwd-rolls-us-dollar-denominated-inve... 6th Oct 2017
FWD Life Philippines has rolled out a new US dollar-denominated insurance protection plan linked to an international equities portfolio that gives investors a piece of top global corporations such as Apple, Microsoft, Facebook, Amazon, Alibaba, Samsung and Toyota. This single-pay product called “US Dollar All Set Higher” is seen to give customers the opportunity to take advantage of the long-term growth potential of international economies while giving them lifetime insurance protection for a minimum investment of $20,000.

Myanmar: Govt ready to issue more insurance licences Asia Insurance Review 3rd Oct 2017
The government has already approved the insurance market liberalisation plan drafted by the Insurance Business Regulatory Board, said Thant Zin, Director General of the Financial Regulatory Department (FRD) operating under the Ministry of Planning and Finance. He said that Myanmar is ready to grant more licences to foreign insurers to operate in the country. He told Anadolu Agency that the government would lift the restrictions on local firms as well.

Old-timer OAC adopts Great Eastern name Asia Insurance Review 30th Sep 2017
Singapore’s first locally-owned composite insurer, Overseas Assurance Corporation (OAC), has been rebranded Great Eastern General Insurance (GEG) – with parent company Great Eastern Holdings announcing the change in name for its general insurance arm in August. OAC’s Malaysian operations has also adopted the new name. The rebranding is part of Great Eastern’s strategy to “strengthen its focus to further build its general insurance business into a significant pillar of growth for the Great Eastern Group”, the insurer said in a statement.

Singapore's DBS Group Inks Regional Insurance Distribution Deal With Chubb Nikkei Asian Review 28th Sep 2017
DBS Group Holdings said Thursday it has entered into a 15-year regional general insurance distribution partnership agreement with U.S. based insurer Chubb, covering five markets - Singapore, Hong Kong, Taiwan, Indonesia and China. "DBS will distribute, on an exclusive or preferred basis, Chubb's coverage for home, contents and selected personal accident and supplemental health (A&H) insurance products as well as general insurance products for SMEs (small medium enterprises)," it said in a statement.

Market Regulation

SEC seeks authority to access bank records Inquirer 16th Oct 2017
The Securities and Exchange Commission (SEC) has appealed to Congress for authority to access and scrutinize bank records as needed to boost investor protection, prevent scams and improve cross-border coordination on securities regulation. In a speech delivered during the Financial Executives Institute of the Philippines (Finex) conference last Friday, SEC Chair Teresita Herbosa said the existence of the local bank secrecy law and the Philippines’ status as a nonsignatory to the multilateral memorandum of understanding (MMOU) adopted by the International Organization of Securities Commissions (IOSCO) were preventing the country from joining a number of regional initiatives involving the capital markets in the region.

Debt trading firm in line for a makeover: Finance Ministry vietnamnews.vn 12th Oct 2017
The functions and operations of the Vietnam Debt and Asset Trading Corporation (DATC) should be restructured to handle the “next phase” of handling non-performing loans (NPLs), the Finance Ministry (MoF) says. Explaining a new decree that it has drafted, the ministry said in the 13 years since it was established, the DATC has fulfilled its mandate and created a solid foundation for tackling NPLs across the country.

AMBD signs MoU with National Bank of Cambodia Borneo Bulletin Online 10th Oct 2017
The Financial Intelligence Unit, Autoriti Monetari Brunei Darussalam (FIU, AMBD) signed a memorandum of understanding (MoU) with the Cambodia Financial Intelligence Unit, National Bank of Cambodia (CAFIU) in Bandar Seri Begawan recently. Under the MoU, both agencies agree to cooperate in the exchange of financial intelligence that may assist in the investigation and prosecution of persons suspected of money laundering and terrorism financing. This marks the strong commitment of both agencies in the global fight against money laundering and terrorism financing.

BSP to launch more market reforms next month philstar.com 9th Oct 2017
The Bangko Sentral ng Pilipinas (BSP) is set to launch the repurchase and reverse repurchase (repo) market next month as part of additional game-changing financial sector reforms to be undertaken by the national government in the medium term. “By November of this year, we also look forward to the first trade in the repo market,” BSP Governor Nestor Espenilla Jr. said in a speech before major stakeholders in the capital market. The BSP implements monetary policy using various instruments to influence the level of liquidity in the market and steer inflation toward the target level. The direct instruments have a strong coercive element as in the case of reserve requirements and directed lending requirements, while indirect instruments include adjustments in short-term policy interest rates and the conduct of open market operations.

AMBD established complaints handling function within financial institutions Borneo Bulletin Online 30th Sep 2017
AUTORITI Monetari Brunei Darussalam (AMBD) has recently issued a notice (Notice No: FCIU/N1/2017/1) to all financial institutions for the establishment of a Complaints Handling Function within financial institutions which will be effective from January 1, 2018. As part of AMBD’s continuous effort in strengthening financial consumer protection, the notice gives financial consumers an effective redress mechanism of their complaints on financial products and services.

Singapore: MAS sets up international advisory panel for cybersecurity Asia Insurance Review 27th Sep 2017
The Monetary Authority of Singapore (MAS) announced last week that it has established a Cyber Security Advisory Panel (CSAP), comprising cybersecurity experts from around the world. The CSAP will advise MAS on strategies to enhance the cyber resilience of Singapore’s financial sector. It will provide MAS with global perspectives on evolving technologies and cyber threats, and their implications for financial services, as well as insights on best practices in cyber security strategies. Mr Ravi Menon, Managing Director of MAS said, “As financial institutions adopt new technologies and financial services are increasingly distributed using digital platforms, strong cyber security is critical to sustaining trust and confidence. We look forward to tapping on the CSAP’s expertise to help ensure that Singapore’s financial sector remains dynamic and secure in an increasingly digital world.”

Vietnam to set new security regulation on e-trading Thailand Business News 26th Sep 2017
The Ministry of Finance has developed a draft circular that provides a general legal framework on the electronic trading activities at the stock market. The draft circular has been sent to the market members to collect their ideas and opinions. It is expected to ensure that the electronic trading activities at the stock market will be transparent, fair, secure and correspond to the Law of Electronic Trading, the Law of Cyber Security and other regulations.