Financial Services Update: September 10, 2018

Financial Services Update | September 10, 2018
Authors: Shay Wester, Ian Saccomanno, and Bryan Yeoh
 
LOOKING AHEAD
 
 
September 13, 2018: Consultation with the ASEAN Working Committee on Payment and Settlement Systems: The Council will be holding its second consultation with the ASEAN Working Committee on Payment and Settlement Systems, the ASEAN workstream tasked with modernizing and integrating the region's payment networks. This session will focus on proposing items for their agenda on FinTech development.
 
October 16-18, 2018: Malaysia Business Mission: The Malaysia Mission will be an opportunity to engage the new administration under Prime Minister Mahathir and gain a better understanding of the new government’s priorities and plans. A meeting with the Minister of Finance has already been confirmed. Deadline to register is October 2. Contact Kim Yaeger at kyaeger@usasean.org for more information.
 
 
THE COUNCIL'S TAKE
 
 
Bangko Sentral ng Pilipinas Creates New Offices for FinTech Oversight
The Bangko Sentral ng Pilipinas (BSP) established the Financial Technology Sub-Sector (FTSS) in June as a response to the need for more specialized oversight created by the growing fintech sector in the Philippines. The FTSS is now led by Mr. Vincente De Villa III and is split into two divisions. The Payment System Oversight Department is responsible for the implementation of the National Retail Payment System (NRPS) and promoting payments fintech more generally. BSP is keen on embracing new payments fintech companies and targets raising the share of e-payments from 10 percent to 20 percent of total transactions by 2020. The second division, the Core Information Technology Specialist Group, is tasked with conducting information technology supervision and monitoring issues regarding cybersecurity. This would include examinations of non-bank financial institutions and payment systems. Such a move is in line with BSP’s recent emphasis on tightening cybersecurity. When discussing the creation of the FTSS, Mr. De Villa also noted that increased monitoring of digital outsourcing services would be part of the mandate of the new agencies.
 
BSP’s new offices will allow it to monitor the fintech industry in its nascent stages while formulating necessary regulations as it develops. Their relatively open innovation policy focuses on a "test-and-learn" approach to new business models. The Securities and Exchange Commission, Insurance Commission, and the Philippine Deposit Insurance Corporation have also been monitoring the situation in what the BSP hopes will become a whole-of-government approach. According to the FINTQ Inclusive Digital Finance Report for 2017-2018, there are 60 fintech companies with a total estimated transaction values of US$5.7 billion in the Philippines. The sector's growth is expected to increase further with the planned Crypto Valley of Asia (CVA) in the Cagayan Special Economic Zone and Freeport (CSEZFP) in Northern Luzon, which is competing with several other blockchain centers to lead the emerging industry in Asia.
 
Indonesian Financial Services Authority Issues New FinTech Regulations
On August 15, the Indonesian Financial Services Authority (OJK) issued Regulation No.13/POJK/2018 on Digital Financial Innovations within the Financial Services Sector (full text of the regulation here in Bahasa Indonesia). This regulation provides a comprehensive framework for OJK to monitor and regulate the burgeoning fintech industry in Indonesia as the previous fintech regulations only covered peer-to-peer (P2P) lending. The regulation covers many issues, including transaction settlement, investment management, fund collection and distribution, insurance, market support, and digital financing, and dives into key areas of innovation such as artificial intelligence, big data, blockchain, cloud computing, open-source information technology, virtual technology, and the sharing economy.
 
Under Regulation 13/2018, fintech companies are required to register with OJK unless an exemption has been given. This requirement will make it easier for OJK to monitor fintech companies considering last month’s discovery that there are 227 unlicensed P2P companies. To promote innovation, OJK will also set up a regulatory sandbox to allow testing of new products and services, following in the footsteps of Bank of Indonesia’s regulatory sandbox. Companies can be in the regulatory sandbox for at most 1 year with the possibility of a six-month extension. Registered fintech companies are required to send monthly self-assessed risk reports while those that are in the regulatory sandbox need to send quarterly performance reports. The regulation also sets out provisions for protecting consumers and data confidentiality. Fintech companies are required to establish onshore data centers and disaster recovery centers under Article 29. While this OJK regulation does not make any reference to GR82, the data localization requirement is consistent with GR82’s Article 17. However, OJK may amend the data localization requirement in the near future as the Government of Indonesia is in the process of softening GR82’s data localization requirement.
 
In addition to Regulation 13/2018, OJK issued on August 8 a new regulation on digital banking services provided by commercial banks, Regulation No.12/POJK.03/2018. The regulation is a response to concerns about risks inherent to Internet-based banking services and covers both the provision of electronic services to clients and the use of digital customer data. It also sets out rules for customs protection and reporting obligations for banks, as well as sanctions. The regulation can be found at this link.
 
OJK hopes this regulatory framework will further improve the domestic startup ecosystem to better enable fintech’s growth to be a new source of growth in Indonesia’s economy. According to the Institute for Development of Economics and Finance, the fintech industry is expected to contribute up to IDR 25.97 trillion (US$ 1.7 billion) to the economy. Besides policy changes, OJK recently inaugurated the OJK Innovation Center for Digital Financial Technology (OJK Infinity) to support the integration of the fintech sector into the national financial system. Additionally, OJK is interested in establishing fintech courses in universities as part of their efforts to cultivate the Indonesian fintech industry.
New Malaysian Sales and Services Tax Covers Financial Industry
The Royal Malaysian Customs Department released the full text of the Service Tax regulation three days ahead of the September 1 implementation of the tax (full text of the regulation can be found here). Though the majority of services are actually exempt, the schedule covers nine types of services which will be taxed at 6 percent. Several major parts of the financial services industry have been included in the taxable services:
  • Insurance firms – General insurance policies except for medical insurance policies and life insurance policies.
  • Professional services firms – Professional services such as but not limited to accounting, auditing, consulting and management will be taxable.
  • Credit card or charge card providers – Provision of credit or charge cards services whether principal or supplementary will be taxable.
The service tax is only chargeable for businesses which exceed the set threshold of MYR 500,000 for most services and imports are exempt. Taxable service providers who are GST registered persons which have been identified and fulfilled the required criteria should have been automatically registered under the Service Tax and would liable for the tax beginning on September 1. Businesses can check their registration status, find industry-specific guides, and transitional rules using the newly launched mySST website. The laws and implementing regulations were passed in recent weeks in quick succession and with limited consultation, leading to confusion as the new taxes entered force over the holiday weekend. The Council has expressed concern to the Ministry of Finance over the lack of public consultation and the insufficient transition time. The Council is closely engaging with the Malaysian government on this issue and recently sent a letter to the Ministry of Finance requesting clarification on numerous points. Members can direct comments or feedback regarding the SST and related advocacy to Kim Yaeger at kyaeger@usasean.org and Tina Jamaluddin at tjamaluddin@usasean.org.
 
 
ADVOCACY UPDATE
 
 
Bank Negara Governor Nor Shamsiah Mohd Yunus has been reviewing pending BNM policies since her appointment in June. Some of the policies under review that the Council has been advocating for action on include:
  • The Interoperable Credit Transfer Framework (ICTF), which is now under the advisement of the Department of Financial Innovation.
  • BNM hopes to finalize the Draft Outsourcing Guidelines soon and reportedly incorporated some stakeholder feedback. Of particular concern by BNM in drafting this regulation is the prevention of, and possible redress for, any breach of Malaysian consumer data stored off-shore.
  • The June 30 enforcement date for foreign insurance companies to divest down to 70 percent has been extended indefinitely to give companies time to make new proposals to BNM after many companies did not meet the original deadline.
As these policies continued to be reviewed, the Governor is striving to create better transparency and stakeholder engagement. The Council is looking for more opportunities to engage BNM on these issues and has sought a meeting during our upcoming Malaysia Business Mission, October 16-18.
 
 
IN THIS UPDATE
 
 
Market Development
Indonesia's bourse to launch tech segment
Gender inequality stifling Cambodian women in finance sector
European firms wooed for creation of financial hub in EEC 
Cryptocurrency trading rules eyed
UBS to Start Currency Pricing, Trading Engine in Singapore
Latest inclusion roadmap targets digital financial services
Singapore: MAS and Singapore Exchange in technology collaboration to tap blockchain technology for tokenised asset settlement
Go-Jek sparks an Indonesian banking revolution
Kingdom’s first corporate bonds in sight after approval from NBC
Gov't sets December pilot test for the national id system
Indonesia welcomes its first Blockchain Hub
Asian countries vie to set up region's 'crypto valleys'
DFIs need to ensure long term financial sustainability
Most Asian companies unconvinced by blockchain's use in trade finance
Indonesia: Green financing gets leg up via IFC's Bank OCBC NISP investment
Khazanah's mass resignation unlikely to affect equity market

Asset Management
Falling kyat may put pressure on foreign debt
Thailand 'haven' in emerging-market rout
From Extreme Turmoil to Calm, Vietnam Stocks Attempt a Comeback
Capital market faces imbalances
Forum discusses solutions to expand capital-financial market
ICO licences drawing interest
Vietnam state company listings lose steam under stricter rules

Banking
Banks step up auctions to resolve bad debts
ASEAN taxation cooperation via automatic information exchange
Fresh round of MFI license cancellations by NBC
Another injection for Acleda Bank
Firms back loan relief measures for victims
Nearly 1M apply for consumer credit in first half
FPO presents hearing on AFAS protocol
Government directs capital hike for State-owned banks
Vietnam's Agribank plans IPO in 2020: Chairman
The Bank of Thailand (BoT) announces its own digital currency in collaboration with the eight…
Vietnam lowers reference exchange rate
Singapore central bank, four others partner to harness blockchain technology
Central bank adamant on credit growth cap
Finance companies finding it difficult to attract foreign capital
Detailed guidance needed to tackle bad debt: experts
Vietnam to limit new foreign bank licenses to encourage local acquisitions
BSP okays guidelines on adoption of PFRS 9

E-Payments
The Thai Revenue Department Introduces a New e-Payment Tax Law
At least five more years needed for Myanmar to go cashless
Making cashless trendy in Cambodia: the story of Pi Pay
Higher Risk Still Means Higher Interest in Fintech Lending
Providers consider Thailand's e-commerce market crucial
Automated payment of land tax to start next year
PromptPay transfer ceiling jumps to B2m from B5,000
Gov’t aims to boost public service payment through banks
Bank of Thailand digital currency scheduled for 2019
Many are ready to move on from cash
2 in 3 SMEs to embrace cashless payments by 2023
Retailers reinventing under pressure
Bank Indonesia pushes use of national payment gateway
BRI launches QR code payment service

Insurance
Thailand: Finance minister wants to infrastructure projects to be insured locally
90% of social insurance fund invested in G-bonds
Myanmar: Door to open soon to foreign insurers
Myanmar: State-owned insurer to cover thousands of homes
Foreign insurers will be allowed to operate locally by 2018-19: IBRB
Reconsider imposition of SST on general insurance products, says PIAM
Malaysia: Foreign insurers given more flexibility to divest their stakes
Cyber-attack coverage gets consideration
Three Indonesian tech unicorns unite to back digital insurance startup
Myanmar: Insurers allowed to sell short term endowment policies
Malaysia: Insurance scheme for low income groups to be tabled in Oct

Market Regulation
MAS proposes new requirements for financial institutions to better guard against cyberattacks
SC orders immediate stop to all Lavidacoin promotions
BoT reshuffles assistant level posts
Businesspeople Urge State Counselor to Reduce Tax And Loan Interest Rates
Malaysian central bank liberalises foreign exchange policy
AMBD updates Alert List
Upcoming OJK Regulation on Fit and Proper Test Reassessment
Repeal law for minister to grant tax exemptions
TBA: Transfer glitch refunds shortened to 1 day
MOF seeks stamp duties on electronic records of fixed property transfers
DOF on draft Federal Constitution: ‘Leaves much to be desired’
BI, BSP team up to fight money crimes
MAS approves Corporate Governance Council's code revisions
SEC releases draft rules on initial coin offerings
 
ARTICLE CLIPS
 
 
Market Development

Indonesia's bourse to launch tech segment The Business Times 7th Sep 2018
Indonesia's stock exchange plans to launch a dedicated technology section in 2019 to host initial public offerings (IPOs) by startups, in the hope of landing a Go-Jek listing. The Indonesian bourse (IDX) said on Thursday it was working with financial regulator Otoritas Jasa Keuangan (OJK) to amend IPO rules, which currently require companies to be profitable within two years of listing.

Gender inequality stifling Cambodian women in finance sector Southeast Asia Globe Magazine 7th Sep 2018
Ros Sopheap recalled growing up in a small rural community of Cambodia and meticulously studying her mum’s daily activities. She was a housewife, which meant much more than keeping the house tidy and cooking meals for the family. She also bought groceries and household supplies, clothed the family, took care of medical needs, oversaw the kids’ education and divvied out pocket cash to her husband and kids to get them through each day.

European firms wooed for creation of financial hub in EEC  The Nation 7th Sep 2018
Industry Minister Uttama Savanayana held discussions with Geoff Donald, executive director of the Europe-Asean Business Alliance (EABA) and representatives from 15 leading European firms who called on Deputy Prime Minister Somkid Jatusripitak yesterday. Uttama said: “Thailand has the proper location to become a financial hub and Somkid has told us about the policy to promote Thailand as a regional financial hub, especially linked to CLMV.” 

Cryptocurrency trading rules eyed The Manila Times 3rd Sep 2018
Cryptocurrency exchanges could be allowed to operate as trading platforms in the Philippines given growing global interest in virtual currencies, the Securities and Exchange Commission (SEC) said. SEC Commissioner Ephyro Luis Amatong told reporters last week that regulators were targeting the release of draft rules by the end of next week. “We see the need to regulate them as trading platforms,” Amatong said, given the SEC’s mandate to protect the investing public.

UBS to Start Currency Pricing, Trading Engine in Singapore Bloomberg 3rd Sep 2018
UBS Group AG will introduce a new electronic currency pricing and trading engine in Singapore next year in a bid to boost liquidity in Asia’s largest foreign-exchange center. The facility will go live in the second quarter of 2019, Zurich-based UBS said Monday in an emailed statement.

Latest inclusion roadmap targets digital financial services The Myanmar Times 29th Aug 2018
“The digital services working group members will be drawn from the private sector, such as insurance firms, private banks and micro-finance institutions. We will allow product by product [one by one] regarding digital finance. We are latecomers for the cashless financial market, which other countries have already developed.”

Singapore: MAS and Singapore Exchange in technology collaboration to tap blockchain technology for tokenised asset settlement Asia Insurance Review 29th Aug 2018
The Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX) have announced a collaboration to develop Delivery versus Payment (DvP) capabilities for settlement of tokenised assets across different blockchain platforms. DvP is a settlement procedure where securities and monies are simultaneously exchanged to ensure that delivery of securities occurs if and only if the corresponding payment is made.

Go-Jek sparks an Indonesian banking revolution Nikkei Asian Review 29th Aug 2018
Suwandi is one of the millions of Indonesians who have recently opened a bank account for the first time thanks to new economy companies like Go-Jek. Rapid smartphone adoption and easy-to-use e-payment apps are penetrating Indonesia's vast unbanked population on a scale that the country's traditional banking industry has never been able to achieve.

Kingdom’s first corporate bonds in sight after approval from NBC Phnom Penh Post 27th Aug 2018
Hattha Kaksekar Limited (HKL) is set to become the first company to issue corporate bonds in the Kingdom, and it is doing so to the tune of 80 billion riel ($20 million). The firm has received approval from the National Bank of Cambodia (NBC) for the move. HKL announced on Friday that the Cambodian microfinance firm plans to initially offer $20 million in bonds, and increase this by another $10 million if there is high demand.

Gov't sets December pilot test for the national id system ABS-CBN News 24th Aug 2018
One million households in 3 regions would be the first to get national identification cards, by December, as the government begins its pilot test, officials said Friday. President Rodrigo Duterte signed the Philippine Identification System (PhilSys) into law last Aug. 6, establishing a single national id for all citizens which will be implemented by the Philippine Statistics Authority (PSA).

Indonesia welcomes its first Blockchain Hub Digital News Asia 23rd Aug 2018
Indonesian Chamber of Commerce and Industry (Kadin), Blockchain Association, Agency for Creative Economy (Bekraf), and Hara (a blockchain project for social impact) came together to set up the country’s first Blockchain Hub. The hub was launched on Aug 16 in Jakarta. The Blockchain Hub aims tobring together the various Indonesian blockchain communities in an attempt to drive innovation and provide education on blockchain technology. It will become the main gateway enabling networking between local and global blockchain players, as well as a place to run blockchain-based projects.

Asian countries vie to set up region's 'crypto valleys' Nikkei Asian Review 20th Aug 2018
The race to establish cryptocurrency hubs in Asia is gathering pace, with several countries easing regulations and unveiling projects to lure financial technology companies. Japan is ahead of the game for now, but opportunities to catch up is also growing fast. The Cagayan Special Economic Zone and Freeport in northern Philippines is building the "Crypto Valley of Asia," a $100 million blockchain hub that aims to mimic Zug in Switzerland, the birthplace of Ethereum that is now home to almost 200 blockchain companies.

DFIs need to ensure long term financial sustainability The Star Online 9th Aug 2018
Development financial institutions (DFIs) need to diversify sources of funding to be sustainable in the long run and not be dependent on fiscal support to deliver their mandates, said Bank Negara Malaysia (BNM) Governor, Datuk Nor Shamsiah Yunus.

Most Asian companies unconvinced by blockchain's use in trade finance Global Trade Review 8th Aug 2018
The majority of Asia’s top 1,000 companies are unconvinced that digital technologies such as blockchain will improve their trade finance experience. 54% of those polled in exclusive research conducted on behalf of GTR said they were either unsure whether it would translate into a better user experience, or that it would definitely not do so.

Indonesia: Green financing gets leg up via IFC's Bank OCBC NISP investment Asia Insurance Review 8th Aug 2018
The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has committed $150m in a green bond issued by Indonesia PT. Bank OCBC NISP Tbk (Bank OCBC NISP). This is the first ever green bond issued by a commercial bank in Indonesia, delivering a new source of green financing to combat climate change, announced the IFC in a statement last week.

Khazanah's mass resignation unlikely to affect equity market NST Online 8th Aug 2018
KUALA LUMPUR: The resignation of the entire Khazanah Nasional Bhd’s board members will likely not have any impact on the local equity market as it is mainly influenced by regional bourses, said Hermana Capital Bhd Chief Executive Officer and Chief Investment Officer Datuk Dr Nazri Khan Adam Khan. “In fact, the effect is relatively muted. So far, we do not see any big fluctuation in stock prices related to companies where Khazanah has invested in, which include CIMB Bank Bhd and Axiata Group Bhd,” he told Bernama.

Asset Management

Falling kyat may put pressure on foreign debt The Myanmar Times 7th Sep 2018
The falling value of the Myanmar kyat versus the US dollar could make repaying external debt harder for the government in the coming fiscal year. In 2018-19, it is expected to repay K877 billion out of the $9 billion Myanmar owes to foreign creditors, according to the budget submitted for the period. That amount may well end up being much higher, given that it was calculated when the exchange rate was still K1,360 to the dollar. It is now around K1,540, representing a difference of more than 13 percent.

Thailand 'haven' in emerging-market rout Bangkok Post 6th Sep 2018
Thailand, the birthplace of the Asian financial crisis two decades ago, has emerged as a haven from this year’s emerging-market rout. The baht has outperformed every other developing-nation currency in the past month as the turmoil centred on Argentina and Turkey began to spread across emerging markets. Thailand’s large current-account surplus and foreign-exchange reserves, as well as a relatively low level of overseas ownership, have cushioned any impact. Nomura Holdings Inc and Aberdeen Standard Investments expect the currency to remain resilient.

From Extreme Turmoil to Calm, Vietnam Stocks Attempt a Comeback Bloomberg 28th Aug 2018
Vietnam’s volatile stock market, which has gone from being the best performer in Asia Pacific this year to barely breaking even, seems to be entering a calmer period. After surging to a near seven-year high in June on a combination of trade war contagion fears and a higher U.S. dollar, 30-day volatility on the benchmark VN Index has fallen to the lowest level since November.

Capital market faces imbalances Viet Nam News 22nd Aug 2018
The Việt Nam’s capital market is facing a concerns in the imbalance between the credit market and the capital market. The statement was made by Deputy Prime Minister Vương Đình Huệ during a forum held in Hà Nội on Tuesday, discussing challenges and solutions to expand the capital – financial market of Việt Nam. Addressing the event, part of the Việt Nam Economic Forum, the Deputy PM said it is necessary to look into the imbalance between the credit market and the capital market, between credit and other added services in banks’ credit activities, and between the short-term and long-term markets, particularly the bond market.

Forum discusses solutions to expand capital-financial market Voice of Vietnam 21st Aug 2018
Officials and experts talked challenges and solutions to expand the capital – financial market of Vietnam at a forum in Hanoi on August 21. Addressing the event, part of the Vietnam Economic Forum, Deputy Prime Minister Vuong Dinh Hue said it is necessary to look into the imbalance between the credit market and the capital market, between credit and other added services in banks’ credit activities, and between the short-term and long-term markets, particularly the bond market. He cited the figure of 53% of businesses operating unprofitably as of the end of 2016, saying that one of the reasons for this is the lack of capital.

ICO licences drawing interest Bangkok Post 9th Aug 2018
About 50 initial coin offering (ICO) projects have shown interest in applying for licences to operate after the Finance Ministry's announcement on approving digital asset licensing took effect late last month, says the Securities and Exchange Commission (SEC). The 50 ICO projects are keen to raise funds from the public, but it remains uncertain whether all of them will be given operating licences to raise funds, said SEC secretary-general Rapee Sucharitakul. For a total of five ICO portals interested in applying for authorised licences, three of them have already submitted their applications to the SEC, Mr Rapee said.

Vietnam state company listings lose steam under stricter rules Nikkei Asian Review 8th Aug 2018
Vietnamese state-owned enterprises are making slow progress on opening up to private investment, with most having missed their deadline for listing on the local stock market -- a key part of the government's plan for modernizing the Southeast Asian country's economy.

Banking

Banks step up auctions to resolve bad debts Viet Nam News 10th Sep 2018
Banks are putting non-performing loans (NPLs) and collateral of default borrowers on auction in a move to speed up the resolution of bad debts. Most NPLs are attached to assets borrowers bought or created thanks to these loans, including real estate, factories, enterprises, industrial clusters and projects.

ASEAN taxation cooperation via automatic information exchange BusinessWorld 9th Sep 2018
The Philippines took a big leap towards entering the AEoI arena back in July 2015 when it signed an intergovernmental agreement (IGA) with the US to exchange financial information on a reciprocal basis. By being a signatory to the IGA, the Philippines undertakes to implement the US Foreign Account Tax Compliance Act (FATCA) within the country, requiring Philippine financial institution to collect financial information relating to account holders that are classified as US persons. Like CRS, the financial information will be submitted to the Bureau of Internal Revenue (BIR), which will, in turn, exchange the same with the US Internal Revenue Service (IRS).

Fresh round of MFI license cancellations by NBC Khmer Times 7th Sep 2018
The National Bank of Cambodia (NBC) has rejected two license applications and revoked the licenses of 24 microfinance institutions operating outside the capital, according to an announcement released Wednesday. Last month, NBC made a similar announcement, revoking the licenses of 11 rural credit institutions and rejecting license applications from 12 other credit organisations. Bun Mony, chairman of Vithey Microfinance, told Khmer Times that the microfinance industry is beset by bad practice, including businesses that operate without a license or charge excessive interest rates.

Another injection for Acleda Bank Phnom Penh Post 7th Sep 2018
Acleda Bank Plc, Cambodia’s leading commercial bank, has injected $36 million worth of capital into its coffers, according to an announcement on Monday. The lender now has more than $395 million in capital. The additional funds will come from the bank’s share dividends. This marks the 15th time Acleda has upped its registered capital since being established, the announcement said.

Firms back loan relief measures for victims Phnom Penh Post 7th Sep 2018
Representatives from the Kingdom’s microfinance sector on Sunday said the industry was keeping a close watch on those impacted by the Mekong River flooding, and that they were willing to take measures to reduce the financial burden on the victims. This came after the National Bank of Cambodia (NBC) and the Ministry of Economy and Finance (MEF) issued a joint statement on Friday, suggesting that institutions find ways to ease the debts of those who had been displaced.

Nearly 1M apply for consumer credit in first half Phnom Penh Post 7th Sep 2018
Some 905,000 Cambodians applied for consumer credit in the first half of this year compared with 670,000 over the same period last year, the latest report from the Credit Bureau of Cambodia (CBC) said. This marks a 35 per cent growth in loan applications. The report showed that outstanding consumer loans reached $5.16 billion at the end of June. The same figure stood at $3.87 billion at the same time last year. Despite the increase in consumer loans, CBC CEO Oeur Sothearoath said the sector has maintained healthy growth.

FPO presents hearing on AFAS protocol Bangkok Post 4th Sep 2018
The Fiscal Policy Office (FPO) is launching a public hearing on protocol to implement the eighth package of commitments on financial services under the Asean Framework Agreement on Services (AFAS), which will allow the Bank of Thailand to push toward the long-awaited establishment of the Qualified Asean Bank (QAB) with Bank Negara Malaysia. The commitment on QAB will pave the way for Asean commercial banks to operate in other countries in the region with more flexibility, said a source at the Finance Ministry who requested anonymity. The Bank of Thailand signed its first heads of agreement on a reciprocal bilateral arrangement regarding QAB with Bank Negara Malaysia on March 14, 2016.

Government directs capital hike for State-owned banks VietNamNet 4th Sep 2018
The Government is directing ministries and agencies to raise capital for State-owned commercial banks through the use of dividends or share sales this year, Deputy Prime Minister Vuong Dinh Hue said at a recent meeting. Hue revealed the news after four State-owned banks – Vietcombank, Agribank, BIDV and VietinBank – proposed the capital hike at the meeting on bad debt resolution last week as they are facing difficulties to fulfill the plan.

Vietnam's Agribank plans IPO in 2020: Chairman VietNamNet 31st Aug 2018
By the end of 2018, state-run Vietnam Bank for Agriculture and Rural Development, known as Agribank, will complete the corporate valuation process, said the bank`s chair. Agribank is expected to have its equitization plan approved by the State Bank of Vietnam (SBV) in early October, however, the bank will only launch its initial public offering (IPO) in 2020 at the earliest due to numerous challenges, said Trinh Ngoc Khanh, Agribank's board chairman. By the end of 2018, Agribank will complete the corporate valuation process, Khanh said at a meeting on August 28.

The Bank of Thailand (BoT) announces its own digital currency in collaboration with the eight… Medium 29th Aug 2018
According to a recent press release on August 21st, the Bank of Thailand (BoT) advances the project to develop a platform for Central Bank Digital Currency (CBCD) that will utilize R3's Corda platform. It was revealed that the CBDC, under the BoT, would be useful in the advancement of Thailand's financial institutions. R3's Corda is a distributed platform (DLT) designed by R3 startup banks to make interbank transactions easy. Inthanon, "the BOT is conducting a DLT proof of concept for scripless government."

Vietnam lowers reference exchange rate Xinhua 29th Aug 2018
Vietnam's central bank on Wednesday adjusted its reference exchange rate between Vietnamese dong and U.S. dollar down by 5 Vietnamese dong to 22,673 Vietnamese dong per U.S. dollar. With the current trading band of plus or minus 3 percent, the ceiling exchange rate is 23,353 Vietnamese dong per U.S. dollar, and the floor rate is 21,993 Vietnamese dong per U.S. dollar, said the State Bank of Vietnam. Meanwhile, listed rates at big commercial banks in Vietnam remained unchanged from Tuesday. Both Vietcombank and BIDV maintained the rates at 23,255 Vietnamese dong per U.S. dollar for buying and 23,335 Vietnamese dong for selling. Last week, the reference exchange rates saw two ups and three downs with total magnitude of 14 Vietnamese dong and 15 Vietnamese dong, respectively. According to the central bank, as of June 11, the reference exchange rate rose 0.63 percent against the end of 2017, while the average rate offered by commercial banks advanced 0.47 percent.

Singapore central bank, four others partner to harness blockchain technology Asia Asset Management 28th Aug 2018
Singapore’s central bank and stock exchange are tying up with Chinese technology firm Anquan Capital, Nasdaq, and Deloitte to develop delivery-versus-payment (DvP) capabilities for the settlement of tokenised assets across different blockchain platforms. DvP is a commonly used procedure for settling trades of securities.

Central bank adamant on credit growth cap VietNamNet 28th Aug 2018
Local credit institutions might struggle more in the second half of the year, with some even having to downsize full-year profit targets, as they are approaching the credit growth limit and the central bank refuses to allow more leeway to maintain macroeconomic stability. TPBank currently takes the lead in credit growth The State Bank of Vietnam (SBV) has capped local banks’ credit growth at 14 per cent for 2018, while setting a 17 per cent common growth target for the banking system. The latest figures from the end of June, however, show that many banks are already approaching the credit growth cap. Several banks have even surpassed their full-year bounds.

Finance companies finding it difficult to attract foreign capital Voice of Vietnam 22nd Aug 2018
Experts say the legal framework for consumer financing is still not open enough, creating difficulties in attracting foreign capital. Deputy CEO of Ernst & Young Nguyen Thuy Duong said the high consumer credit growth rate in recent years has attracted many regional investors. More M&A deals have occurred in the last two years. Shinhan Bank, for example, took over the retail banking division of ANZ, while Lotte and Shinhan bought TechcomFinance and Prudential Finance. Analysts say if finance companies can mobilize huge capital from foreign prestigious investors, they will have stronger resources to build attractive business strategies and offer better lending interest rates. If so, attracting foreign capital will also bring benefits to consumers. However, the legal framework is believed to be the major obstacle that makes finance companies find it difficult to lure foreign investors.

Detailed guidance needed to tackle bad debt: experts Viet Nam News 21st Aug 2018
Settling non-performing loans (NPLs) has been easier since the application of Nation Assembly’s Resolution 42 a year ago, but detailed guidance is still needed to make the use of the regulation smoother, industry insiders said. Enhanced legal frameworks in Resolution 42, which allows credit institutions and the Việt Nam Asset Management Company (VAMC) to rapidly repossess collateral if a borrower defaults, have helped institutions and VAMC manage bad debts.

Vietnam to limit new foreign bank licenses to encourage local acquisitions Reuters 9th Aug 2018
Vietnam said on Thursday it will limit or possibly stop issuing new licenses for foreign banks to set up in the country as it looks to encourage takeovers of weaker local lenders and strengthen the financial system. “Soon, Vietnam will strictly limit, or may stop issuing new licenses for 100-percent foreign owned banks in the country,” Deputy Prime Minister Vuong Dinh Hue said in a statement posted on the government website.

BSP okays guidelines on adoption of PFRS 9 BusinessMirror 6th Aug 2018
THE Bangko Sentral ng Pilipinas (BSP) has approved the adoption of a new standard for financial institutions, which aims to promote the integrity of financial reporting in the country. Over the weekend, the BSP announced that its monetary board green-lighted the guidelines on the adoption of the Philippine Financial Reporting Standards (PFRS) 9 – Financial instruments for Bangko Sentral-supervised financial institutions (BSFIs). According to the Central Bank, the new policy sets out the supervisory expectations in classifying and measuring financial instruments and in recognizing impairment to promote prudence and transparency in financial reporting.

E-Payments

The Thai Revenue Department Introduces a New e-Payment Tax Law Baker McKenzie 10th Sep 2018
As part of the Thailand 4.0 economic model which aims to improve the country's competitiveness, the Thai government has issued its National e-Payment Master Plan, which includes the development and implementation of an electronic tax system (e-Tax system). The Revenue Department's first phase of implementation, the e-Tax Invoice system, hopes to facilitate commercial transactions and reduce storage and paper costs and will replace the current paper-based tax invoice record keeping system.

At least five more years needed for Myanmar to go cashless The Myanmar Times 7th Sep 2018
“It costs the government money to print cash and produce coins and this amount is quite a lot. There are also other costs involving transporting the money to various banks across the country,” said U Zaw Lin Htut, CEO of Myanmar Payment Union (MPU). Meanwhile, it is getting more difficult to monitor the growing volume of cash flows related to tax and licensing matters at government departments. “All that leads to unnecessary cases involving corruption. For citizens, fake cash notes and damaged money are also a problem,” said U Zaw Lin Htut.

Making cashless trendy in Cambodia: the story of Pi Pay e27 3rd Sep 2018
The fintech company is the exact reflection of the face of Cambodia’s startup environment: fresh and dynamic Behind the catchy name and youthful, shocking, pink logo of Pi Pay, it is Paul Freer, the Chief Commercial Officer (CCO) of Pi Pay. Freer is in charge of ensuring the brand stays relevant and serves its purpose of taking care any money-related transaction within one app. This means he is the perfect person share his wisdom when it comes to the cashless scene in the busy Phnom Penh, Cambodia.

Higher Risk Still Means Higher Interest in Fintech Lending Jakarta Globe 31st Aug 2018
For platforms that boast superior debtor risk assessments and aim to compete with conventional banks, online peer-to-peer lending services have so far fell short of their promises. These services currently offer annual interest rates of 19 percent on average to their clients, most of which are small and medium enterprises. However, the Financial Services Authority (OJK) says this is still too high to attract more borrowers that generally do not qualify for bank loans. In comparison, conventional banks offer SMEs loans at interest rates of up 10 percent, or 7 percent with the state subsidy. Ajisatria Sulaeman, director of the Association of Financial Technology (Aftech), said borrowers using peer-to-peer services are often those who do not meet banks' requirements.

Providers consider Thailand's e-commerce market crucial Bangkok Post 30th Aug 2018
Thailand is the most important e-commerce market for key overseas players as the retail market keeps evolving, say logistics providers. Speaking at a panel on the "Retail Business Revolution", Alex Ng, executive director of Kerry Express Thailand, said the parcel delivery segment will grow faster in next 5-10 years. "Kerry's services will go deeper and wider in the Thai community in the next 5-10 years," he said. Kerry is the first parcel delivery service to introduce QR payment upon delivery.

Automated payment of land tax to start next year Asia News Network 29th Aug 2018
Finance authorities expect to begin collecting land tax through banks from next year in a bid to modernise tax payment through the use of an electronic system. The new land tax payment system will be similar to the way road tax is paid through the Banque pour le Commerce Exterieur Lao Public (BCEL), according to officials at the Taxation Department, Ministry of Finance.

PromptPay transfer ceiling jumps to B2m from B5,000 Bangkok Post 27th Aug 2018
The National e-Payment Committee will gradually increase the ceiling of free money transfers through PromptPay to 2 million baht from 5,000 baht in the future, Finance Minister Apisak Tantivorawong said on Monday. The minister said after the meeting that the ceiling for free money transfers would be increased in steps from 5,000 baht to 700,00 baht in the next few months. He did not give a specific timeline when the maximum ceiling of 2 million baht will take effect.

Gov’t aims to boost public service payment through banks Việt Nam News 25th Aug 2018
The Government will continuously fine-tune legal regulations to encourage and popularise the payment of public services through banks, deputy governor of the State Bank of Viet Nam (SBV) Nguyen Kim Anh said at a forum on accelerating the payment of public services via banks held in Ha Noi on Friday. The Government early this year approved a project on fostering the payment of public services, such as tax, electricity, water, tuition, hospital fees and social and public welfare programmes, via banking.

Bank of Thailand digital currency scheduled for 2019 Bangkok Post 22nd Aug 2018
The first phase of the Bank of Thailand's wholesale Central Bank Digital Currency (CBDC), which will be used for interbank fund transfers, is expected to be completely developed by the first quarter of next year, says the central bank. The Bank of Thailand and eight commercial banks under Project Inthanon Phase 1 will design, develop and test a proof-of-concept prototype for domestic wholesale funds transfers by using wholesale CBDC, the central bank said in a release.

Many are ready to move on from cash The Myanmar Times 10th Aug 2018
The majority of people in Myanmar wish to have access to banking services and cashless payment methods, such as credit and ATM cards, mobile payments, contactless payments and payment via QR codes, according to Visa’s Financial Education for Sustainable Growth Study. The report, conducted recently in Myanmar by payments technology firm Visa, is part of an effort by the company to understand the perceptions, attitudes and behaviours of Myanmar people on money, banking and payments.

2 in 3 SMEs to embrace cashless payments by 2023 Singapore Business Review 10th Aug 2018
They are also shunning the use of cheques. Two in 3 (66%) of Singapore small and medium enterprises (SMEs) admitted that they are likely to do away with cash and cheque for their customer and supplier dealings and go cashless by 2023, according to a survey by OCBC.  In fact, nearly half (45%) of SMEs anticipated going cashless ahead of schedule by embracing e-payments as early as 2020.

Retailers reinventing under pressure Bangkok Post 8th Aug 2018
Globally, e-commerce is hurting some bricks-and-mortar stores while transforming the retail property landscape. Online shopping is becoming more seamless and convenient, forcing physical stores to evolve to survive.

Bank Indonesia pushes use of national payment gateway The Jakarta Post 6th Aug 2018
Bank Indonesia is stepping up efforts to increase consumers’ use of the newly established national payment gateway (GPN), according to interbank network provider PT. Artajasa Pembayaran Elektronis. Artajasa business director Anthoni Morris Morris said on Saturday that BI planned to carry out a number of programs in the second half of 2018, including the mass production and use of debit cards with the GPN logo in electronic data capture (EDC) terminals.

BRI launches QR code payment service The Jakarta Post 6th Aug 2018
State-owned lender PT Bank Rakyat Indonesia (BRI) has launched a quick response (QR) code payment service called My QR.

Insurance

Thailand: Finance minister wants to infrastructure projects to be insured locally Asia Insurance Review 10th Sep 2018
Finance Minister Apisak Tantivorawong is urging local insurers to strengthen their financial positions and enlarge their business size, enabling them to insure the government's big-ticket infrastructure projects worth THB3trn ($91.5bn) without reinsuring with overseas companies. Thai insurance companies now enter into reinsurance agreements with overseas companies because the former are short of capability to cover risk in its entirety, according to a report in The Bangkok Post quoting the minister.

90% of social insurance fund invested in G-bonds Viet Nam News 4th Sep 2018
About 90 per cent of social insurance funds are currently invested in government bonds (G-bonds), Đào Việt Ánh, deputy general director of Việt Nam Social Security (VSS) said at a seminar last week. The annual average investment interest rate of the entire social insurance fund in 2017 was 7.25 per cent.

Myanmar: Door to open soon to foreign insurers Asia Insurance Review 3rd Sep 2018
The Insurance Business Regulatory Board (IBRB) will allow foreign insurance companies to conduct business in the country in the new fiscal year, which will commence on 1 October, U Zaw Naing, the board's secretary, has said. “This is a roadmap for the development of the local insurance sector. The Union government has already given the nod for it. We will allow foreign insurance companies to sell life insurance and general insurance services in the country. It will start in FY2018-2019,” he added.

Myanmar: State-owned insurer to cover thousands of homes Asia Insurance Review 30th Aug 2018
Myanmar's state-owned insurer has signed an agreement with a consortium of local and foreign companies to provide insurance to buyers of government-built housing units. The insurance will be available on thousands of housing units, with the government planning to build and sell up to one million homes over the next few decades, reports Frontier Myanmar.

Foreign insurers will be allowed to operate locally by 2018-19: IBRB The Myanmar Times 29th Aug 2018
The Insurance Business Regulatory Board (IBRB) will allow foreign insurance companies to do business in the country in the new 2018-19 fiscal year, which will commence October 1, U Zaw Naing, the board’s secretary, said on August 28. He said the IBRB, which was established by the Ministry of Planning and Finance in 2016, will allow foreign insurance companies to provide life and general insurance policies in 2018-19. “We are planning to allow foreigners to participate in the domestic insurance market. We will hire international consultants to help us screen and review foreign insurance providers before permitting them to compete in the market,” U Zaw Naing said.

Reconsider imposition of SST on general insurance products, says PIAM The Edge Markets 27th Aug 2018
The General Insurance Association of Malaysia (PIAM) says it will appeal the government's move to tax general insurance products — except for medical policies — under the new Sales and Services Tax (SST) system.  PIAM chairman Anthony Lee said the new SST, with comes to force on Sept 1, is a contrast to the former service tax regime as insurance and takaful services, including general insurance for individuals, are among the items listed as taxable.  

Malaysia: Foreign insurers given more flexibility to divest their stakes Asia Insurance Review 21st Aug 2018
Foreign parties will be given more flexibility to reduce their 100% stakes in insurance companies in Malaysia to the 70% ceiling. The deadline for the divestments will now depend on the bilateral agreement between the insurance companies and Bank Negara Malaysia (BNM).

Cyber-attack coverage gets consideration Bangkok Post 15th Aug 2018
The Office of Insurance Commission (OIC) is proposing cyber-insurance as an alternative for better risk management among commercial banks amid rising threats from cyber-attacks in the digital age. OIC secretary-general Suthiphon Thaveechaiyagarn said cyber-attacks are on the rise, with severe cyber-attacks prevailing. "Digital technology plays a vital role in today's businesses, such as fintech, insurtech, digital identification, and cryptocurrencies," Mr Suthiphon said. "This presents both opportunities to develop new products and distribution channels, but on the other side of a coin, it comes with risks."

Three Indonesian tech unicorns unite to back digital insurance startup TechCrunch 13th Aug 2018
It’s almost unheard of to see three unicorns join forces to fund a startup, but that’s exactly what has happened in Indonesia. Ride-hailing company Go-Jek, e-commerce firm Tokopedia and travel booking startup Traveloka — each of which is valued in the billions of U.S. dollars — have come together to provide a Series A funding round for PasarPolis, a digital insurance startup in Indonesia aiming to tap Southeast Asia’s growing internet economy.

Myanmar: Insurers allowed to sell short term endowment policies Asia Insurance Review 10th Aug 2018
Insurance companies in Myanmar including state-owned Myanma Insurance and 12 private insurers have been allowed to provide short term endowment life insurance policies as part of their product portfolios, said Daw Sandar Oo, chair of Myanmar Insurance Association (MIA) and managing director of Myanma Insurance. On 3 August, Grand Guardian Insurance (GGI) became the first insurer to offer short term endowment life insurance in Myanmar, reports Myanmar Times.

Malaysia: Insurance scheme for low income groups to be tabled in Oct Asia Insurance Review 6th Aug 2018
The Health Ministry is in the final stage of drawing up a health insurance protection scheme for those in the B40 group (bottom 40% in terms of income) to help them obtain affordable treatment at government and private hospitals. Deputy Health Minister Dr Lee Boon Chye said the proposed insurance protection scheme would be tabled in the 2019 Budget to Parliament sitting in October, reports the Bernama news agency.

Market Regulation

MAS proposes new requirements for financial institutions to better guard against cyberattacks Channel NewsAsia 6th Sep 2018
Financial institutions in Singapore could have to implement six security measures as part of new proposed requirements by the Monetary Authority of Singapore (MAS) to strengthen their cyber resilience and better guard againstcyberattacks. In a press release on Thursday (Sep 6), the central bank said breaches are often the result of insecure system configurations or compromised system accounts.

SC orders immediate stop to all Lavidacoin promotions The Star Online 5th Sep 2018
The Securities Commission Malaysia (SC) has ordered an immediate stop to all promotional activities on the newly-launched Lavidacoin cryptocurrency, pending further review.

BoT reshuffles assistant level posts Bangkok Post 31st Aug 2018
The Bank of Thailand's board of directors has approved a major shake-up at the assistant governor level by rotating three assistant governors and appointing four new ones, effective from the end of this month. Somboon Chitphentom, assistant governor for the financial institutions policy group, will succeed Woraporn Tangsaghasaksri, who is assistant governor for banknote management group and will be moved to oversee the human resource management and development department, said the central bank. Jaturong Jantarangs, assistant governor for the monetary policy group, will be rotated to the supervision group.

Businesspeople Urge State Counselor to Reduce Tax And Loan Interest Rates The Irrawaddy 29th Aug 2018
Leading businesspeople urged State Counselor Daw Aung San Suu Kyi to reduce tax and bank loan interest rates during a meeting in the administrative capital Naypyitaw on Tuesday. Potential investors are maintaining a wait-and-see attitude and Myanmar’s economy is experiencing a slowdown, said leading builder U Maung Weik. Reducing bank loan interest and tax rates will attract investors, he said. “As the interest rate on bank loans is 13 percent, businesses find it hard to profit. There is a need to reduce this rate temporarily to 8 or 9 percent. We believe many investors will come back into the market then,” said U Maung Weik.

Malaysian central bank liberalises foreign exchange policy Financial Times 17th Aug 2018
The new governor of Malaysia’s central bank has moved to liberalise its foreign exchange policy and signalled a more conciliatory approach to regulating overseas insurance companies, marking a sharp shift away from the previous administration’s tough stance on international financial institutions.

AMBD updates Alert List Borneo Bulletin Online 14th Aug 2018
Autoriti Monetari Brunei Darussalam (AMBD) has informed members of the public that the AMBD Alert List has been updated.The AMBD Alert List is a list of individuals, companies and websites which are neither authorised nor approved under the relevant laws and regulations administered by AMBD or whose activities raise a suspicion of illegal financial activity. To access the Alert List, as well as the list of persons and institutions licensed by AMBD, members of the public may visit AMBD’s website at http://www.ambd.gov.bn.

Upcoming OJK Regulation on Fit and Proper Test Reassessment Hadiputranto, Hadinoto & Partners 13th Aug 2018
The Financial Services Authority ("OJK") is currently preparing a new regulation on fit and proper test reassessments for "primary parties" in the financial service sector. The draft regulation is currently being disseminated by the OJK for public comment. We have not received any confirmation on when the OJK will enact this regulation. Clients are encouraged to review the draft regulation and to provide comments to the OJK.

Repeal law for minister to grant tax exemptions The Edge Markets 10th Aug 2018
The legal provision that allows the finance minister to exempt companies or individuals from paying tax at his discretion should be repealed, a tax lawyer said. S Saravana Kumar, a partner of Lee Hishammuddin Allen & Gledhill (LHAG), said Section 127 (3A) of the Income Tax Act 1967 (ITA) must be removed to avoid issues of abuses of the tax law. Speaking to reporters on the sidelines of a tax seminar here, Saravana said Sections 127(3) and 127 (3A) both allow the finance minister to give tax exemptions. He said Section 127(3) could be maintained because tax exemption under this provision is only granted through a gazette order that has to be tabled in Parliament.

TBA: Transfer glitch refunds shortened to 1 day Bangkok Post 8th Aug 2018
The Thai Bankers' Association (TBA) has agreed to shorten the period for unmatched fund transfer returns in the event of mobile app glitches to one day from a few days. The one-day fund returns were a result of a meeting between the Bank of Thailand and the TBA a few weeks ago, said TBA chairman Predee Daochai.

MOF seeks stamp duties on electronic records of fixed property transfers Singapore Business Review 7th Aug 2018
This will help safeguard Singapore's revenue base, it said. The Ministry of Finance (MOF) has proposed changes to Singapore’s Stamp Duties Act and introduced the Stamp Duties (Amendment) Bill 2018 in Parliament. According to an announcement, MOF proposed the duty to be levied on electronic records of transfers of immovable properties and shares. Currently, transfers of immovable properties and shares are typically done via physical records, and stamp duty is levied where applicable.

DOF on draft Federal Constitution: ‘Leaves much to be desired’ BusinessMirror 7th Aug 2018
The draft Federal Constitution “leaves much to be desired” particularly on the financial aspect, according to the Department of Finance (DOF). In a Senate hearing on the National Budget on Tuesday, Senator Sherwin Gatchalian asked if the economic team had an official position on Federalism. While Finance Secretary Carlos G. Dominguez III said there was none, he lamented that the draft Constitution had issues with regard to finances, particularly on shouldering debt and financing certain

BI, BSP team up to fight money crimes The Jakarta Post 6th Aug 2018
Bank Indonesia (BI) and the central bank of the Philippines, Bangko Sentral Ng Pilipinas (BSP), signed an agreement to strengthen bilateral cooperation in fighting money laundering and terrorism financing.

MAS approves Corporate Governance Council's code revisions Singapore Business Review 6th Aug 2018
They will also establish the industry-led Corporate Governance Advisory Committee by late 2019. The Monetary Authority of Singapore (MAS) accepted the final recommendations of the Corporate Governance Council regarding the proposed revisions to the Code of Corporate Governance which eyes to encourage firms to innovate, grow, and boost investors confidence in the capital markets, an announcement revealed. Amongst these recommendations is to streamline the code to focus on key tenets of corporate governance which shall be done by shifting baseline market practices to the Singapore Exchange’s Listing Rules (SGX LR). It also includes removing overly-prescriptive or duplicative requirements already in SGX LR from the code, and introducing a voluntary Practice Guidance to provide guidance on compliance with the code.

SEC releases draft rules on initial coin offerings Business World 3rd Aug 2018
THE SECURITIES and Exchange Commission (SEC) has issued draft guidelines for the conduct of initial coin offerings (ICOs), in a bid to keep up with the number of start-ups using this scheme to raise funds from the public. In an e-mailed statement to reporters, the corporate regulator said the draft guidelines were patterned after rules in other jurisdictions and markets. The draft circular defines an ICOs as “distributed ledger technology fund-raising operations involving the issuance of tokens in return for cash, other cryptocurrencies or other assets.” The benefits of an ICO include profits through the increase in the value of tokens which can later be sold, voting or governance rights, and usage rights.