Financial Services Update: November 15, 2018

Financial Services Update | November 15, 2018
Authors: Shay Wester, Ian Saccomanno, Tra Nguyen, and Bryan Yeoh
 
LOOKING AHEAD
 
 
November 26, 2018: 2018 TELMIN Business Mission Planning Call 3
Register here to join the third of three planning calls for our Business Mission to the 18th ASEAN Telecommunications and Information Technology Ministers Meeting (TELMIN).
 
December 4: 2018 Business Mission to the 18th ASEAN Telecommunications and Information Technology Ministers Meeting
We are now registering senior level executives for our Business Mission to the 18th ASEAN Telecommunications and Information Technology Ministers Meeting (TELMIN) taking place Tuesday 4 December to Thursday, 6 December, 2018 in Ubud, Indonesia. To register, please click here.
 
December 11, 2018 - December 13, 2018: 2018 Myanmar Business Mission
Requested meetings for the 2018 Myanmar Business Mission include: President U Win Myint, State Counsellor Daw Aung San Suu Kyi, Key Cabinet Ministers, Members of Parliament including Speaker of the Pyithu Hluttaw (Lower House) U T Khun Myat, Myanmar Investment Commission, and the UMFCCI. Please contact Jack Myint at jmyint@usasean.org with any questions or to express interest.
 
 
THE COUNCIL'S TAKE
 
 
Vietnam Releases Draft Law on Securities
 
Vietnam’s Ministry of Finance (MOF) recently released a second draft of the Law on Securities for public consultation (Full text of the draft here in Vietnamese). The State Securities Commission (SSC) was tasked with revising the law as the current Securities Law was introduced in 2006 at a time when Vietnam’s securities markets were much smaller. Since 2006, the Vietnamese government has become aware of shortcomings in the law as the market has developed.
 
Changes in the draft law include new conditions for public company status, private placement, redemption of shares, new triggering events of public offer to purchase, expanded scope of “related person,” and changes to acquiring an operation license and enterprise registration certificate for securities companies and fund management companies. Another key change is to conditions for an initial public offering (IPO). The draft law increases the minimum charter capital from VND10 billion (US$430,000) to VND30 billion (US$1.291 million), requires companies to be profitable for two years preceding IPO registration, and sets minimum thresholds for how many shares must be sold off in the IPO.
 
Another change, notable to all industry sectors, is that the draft law lifts the general mandates for 49 percent foreign ownership caps in public companies and harmonizes the definition of “foreign ownership ratio” with the Law on Enterprise. The change in ownership rules will apply to more than 200 conditional sectors, but will exclude key sensitive sectors, including security, defense, telecommunications, and insurance which will all be left at 49 percent. The cap for banks will also remain at 30 percent, though the government may consider lifting this on a case-by-case basis.
 
According to Deputy Minister of Finance Huynh Quang Hai, the government is hoping that the new law will continue to encourage development of the market in a faster, stronger and sustainable manner. Vietnam’s stock market was Asia’s top performer last year posting 48 percent growth. The public consultation ends on December 2 and the draft law is expected to be submitted to the Government in the second quarter of 2019 and then to the National Assembly in the fourth quarter of 2019.
 
Thai Fintech Act Expected this Year
 
Thailand’s Fintech Act is on track to be enacted by the end of the year according to industry groups that have been involved in drafting. The Fintech Act, which the Council first covered in 2017 in this update, will include measures on electronic transactions, know-your-customer rules, and due diligence. It will also require the government to provide open data sources to entrepreneurs to support innovation. This work to build the regulatory infrastructure of a digital financial services system will be critical to building a thriving and modern financial ecosystem, which has lately been a priority of the Thai government and especially the Bank of Thailand.
Outsourcing Regulations Evolving in ASEAN
 
Financial services regulators in ASEAN have recently been re-examining regulations how financial institutions outsource IT systems, with changes to regulations in Thailand, Vietnam, and Malaysia.
 
Thailand: On October 1, Thailand’s Capital Market Supervisory Board (CMSB) issued a new outsourcing regulation that greatly reduces regulatory burden for securities companies. Unlike the previous regulation, which requires securities companies to obtain approval from the Office of the Securities and Exchange Commission (Office of the SEC) prior to outsourcing, now companies only need to notify Office of the SEC within 15 days after they outsource business functions to external providers.
 
Under the new, more lenient regulation, a securities company may outsource any of its functions if they meet two requirements: (1) the company may not reduce itself to an empty shell and (2) if the outsourced function is a central utility function, the company may only outsource to a provider who has been approved by the Office of the SEC. There is no clear definition under this regulation as to what is considered a “central utility function.” However, the Office of the SEC commented in a public hearing document that fund service platform function and electronic payment for a settlement of securities and derivatives may constitute central utility function. The regulation also stipulates requisite provisions which an outsourcing agreement must contain. A sub-outsourcing arrangement is also permissible provided that the securities company consents to the arrangement and the arrangement contains the same requisite contents that was agreed upon between the securities company and the principal external provider. The SEC is authorized to issue further guidance on the regulation so clarification on some points may emerge in the future.
 
Vietnam: The State Bank of Vietnam (SBV) on August 21 issued Circular No. 18/2018/TT-NHNN (Circular 18) on the use of cloud computing services by banks. Most notably, Circular 18 introduces new regulations on the use of cloud computing services in banking as well as regulations on outsourcing cloud computing services to third party service providers. Section 6 of Circular 18 sets out some critical steps financial institutions (FIs) must follow before they outsource cloud computing services. Risk assessment is an essential component throughout these steps. First and foremost, FIs must determine the class of information and the level of information system to be outsourced to third party providers. There are three classes of information and three levels of information systems based on level of complexity and confidentiality. Circular 18 provides clear instructions on the classification of these systems. If a third party is hired to perform all administration-related activities of information systems classified at level 2 or higher, FIs must then send the risk assessment report to SVB, who reserves the right to examine the report on a case-by-case basis. In short, SBV employs a notification system which requires FIs to send a report rather than an application for approval. It is unclear, however, how frequently and based on what factors SVB shall choose to review the risk assessment report. Section 6 also recommends several factors FIs should consider when selecting third party providers and specifies provisions an outsourcing contract must entail. It also lists out minimum contents FIs must include in their own information security regulations. These regulations must be signed by the legal representative and implemented throughout the organization. Like the new Thai regulations, the regulation requires notification of higher risk outsourced activities.
 
Circular 18 will become effective on January 1, 2019 replacing Circular No. 31/2015/TT-NHNN. It applies to all credit institutions (except for people’s credit funds and microfinance institutions), foreign bank branches, and organizations providing intermediary payment services.
 
Malaysia: Bank Negara Malaysia (BNM) has circulated an update to the Outsourcing Exposure Draft that had previously been floated in late 2017. Some key additions in the update include the introduction of materiality thresholds to certain parts of the regulation, recognition and regulations covering cloud service providers (though there is some uncertainty on how this will apply to public cloud), and additional details in the approval system. In contrast with Vietnam and Thailand, BNM’s preference for an approval regime and continued application of certain parts of the regulation to non-material low risk outsourcing arrangements remain areas of significant concern. Despite those challenges, which the Council continues to encourage BNM to address (see below), implementation of the regulation would represent a significant improvement over the status quo.
 
 
ADVOCACY UPDATE
 
 
Bank Negara Malaysia Digital Regulations
 
In a significant move to update data governance and strengthen cybersecurity in the financial sector, Bank Negara Malaysia (BNM) recently released an updated Outsourcing Exposure Draft and a new Risk Management in Technology (RMiT) Exposure Draft for public feedback.
 
The new Outsourcing Draft updates the draft previously released in November 2017, which the Council had also submitted comments on. Some key additions in the update include the introduction of materiality thresholds to certain parts of the regulation, recognition and regulations covering cloud service providers, and additional details in the approval system. BNM’s preference for an approval regime and continued application of certain parts of the regulation to non-material outsourcing arrangements remain areas of significant concern. Despite those challenges, which the Council continues to encourage BNM to address, implementation of the regulation would represent a significant improvement over the status quo. The Council submitted a letter on behalf of members on October 19 raising these issues and other technical challenges in the regulation (attached).
 
The RMiT Exposure Draft (available here) sets out extensive rules for financial institutions’ technology risk management frameworks. The draft is very comprehensive and covers areas including cybersecurity management, cryptography, data center management and third-party service providers. One area of concern in the draft is restrictions it places on use of public cloud, which does not appear to be reflected in the Outsourcing Draft. A first draft of the Council’s submission has been circulated based on member input (attached). Members can submit further comments on the Exposure Draft to Ian Saccomanno at isaccomanno@usasean.org and Tra Nguyen at tnguyen@usasean.org by November 26. A final draft of the Council's letter will then be circulated for further review and edits.
 
Indonesia Insurance Tax
 
The Council, in coalition with other industry associations, is continuing to advocate for a resolution to a problematic change in tax policy affecting the insurance industry in Indonesia. Following early advocacy by the Council, the Indonesian Tax Directorate-General issued Circular Letter S-607/PJ.03/2018 to mitigate a problem, however, the Letter did not fully solve the challenge. The Council and other associations are continuing to work with the Tax DG and the Financial Services Authority (OJK) to fully resolve the issue. The challenge emerged in early 2018 when a confidential tax court ruling changed how income taxes for insurance companies are calculated, significantly increasing their tax burden and leading to the charging of additional back-taxes and penalties. Early analysis indicated that the penalties and back-taxes were so large that more than a dozen insurance companies would fall below-mandatory risk-based capital levels if they were to pay them.
 
 
IN THIS UPDATE
 
 
Market Development
Singapore snaps up lion's share of ASEAN fintech funding at US$222m in January-October 2018
MAS inks deal to promote inclusive financial services
Asean a magnet for Asian fintech firms
CTRP Package 4 to deepen capital markets, says DOF
MAS, SGX leverage blockchain tech to settle tokenised assets
SET readies digital plan
MAS, Bank Indonesia set up US$10 billion bilateral financial arrangement
First ICO portal en route
Peso-renminbi trading to cut business costs, spur flow of Chinese investments
Vietnamese banks have eye on foreign markets
Binance gets funding to push crypto across Southeast Asia
Brunei’s Islamic capital market showing positive growth
Philippines banks slowly tap green financing
OJK's fintech sandbox

Asset Management
Fintech seen spurring rush towards capital markets
Vietnam primed for M&A boom as foreign ownership limit eases
Singapore’s asset management industry hits $2.39trn
Standards launched to enhance transparency, consistency and uniformity of ASEAN
Specialist argues for LTF deductions

Banking
Central Bank provides new details on foreign-bank directive
Singapore: Three global banks open innovation labs in Singapore
SCB downgrades SME loan view
Bank of Thailand weighs SME lending requirements
Bank Indonesia to launch DNDF transactions on Nov. 1
BOT to consider suggestions from developers, banks for home loan policy 
Thai lenders brace for stricter mortgage rules
Monetary board member says BSP ready to pause tightening

E-Payments
Banks required to form task force on payment systems
Singapore and Thailand QR Payments Will Soon Be Standardised
Can mobile banking overcome Myanmar’s trust issues?
Bank Indonesia to Standardize QR Code Payment
Cambodia Sees Growing Fintech Industry; Laos Still Lacks Behind
Gov’t wants more clearing houses for digital deals
GSB platform to pool small shop purchasing
PayNet to launch DuitNow money transfer service in December
Mobile providers to join e-payment services
Nets launches PayCollect, an online billing and collections system for businesses

Insurance
Singapore sets up world's first commercial cyber risk pool
Insurance industry progressing at slow pace, foreign competition needed: AMI
Thailand: Insurance institute to pave the way for business in neighbouring markets
Indonesia: Insurance regulator calls for new ideas to grow industry
Indonesia Among World's Most Underinsured Countries
TII aims to build regional operations of Thai firms
Philippines: Insurance industry adopt FinTech
President rebukes minister, state insurer over health insurance deficit

Market Regulation
OJK issues new regulation to improve customer protection in the financial services sector
Vietnam to lift foreign ownership limit on listed companies
Singapore to launch tokenised securities settlement system
Thailand’s Deputy Prime Minister Calls for More Cryptocurrency Regulations
BSP: Philippine banks ready for stricter global standards
Myanmar eases restrictions on foreign bank lending
ASEAN pulls ahead of Japan in capital market reform
4 Malaysia central bank officials put on leave pending probe into RM2 billion land purchase
New requirements on the use of cloud computing services in banking sector
Singapore regulator takes a stand against shadow banking by fintechs
TFA: Fintech law to be enacted this year
 
ARTICLE CLIPS
 
 
Market Development

Singapore snaps up lion's share of ASEAN fintech funding at US$222m in January-October 2018 Singapore Business Review 15th Nov 2018
Firms specialising in SME financing and wealth management services lured significant investor interest. Fintech firms in Singapore attracted the largest share of funding (48.5%) within ASEAN after achieving a record high US$222m in January-October 2018, according to a report by UOB which cited data from Tracxn.

MAS inks deal to promote inclusive financial services Singapore Business Review 15th Nov 2018
It hopes to open dialogue on the benefits of fintech collaborations between Latin America and the Caribbean and ASEAN. The Monetary Authority of Singapore (MAS) has signed a Memorandum of Understanding (MOU) with the Inter-American Development Bank (IDB) Group which was led by its innovation laboratory IDB Lab in a bid to foster innovation in financial services in Latin America and the Caribbean (LAC) and ASEAN, an announcement revealed.

Asean a magnet for Asian fintech firms The Business Times 15th Nov 2018
The Asean region is an attractive target for growth by fintech firms, with Singapore as a clear beachhead for such startups looking into regional expansion. This is according to the Pulse of Fintech report produced by KPMG, which looked at fintech investment trends in the first half of this year.

CTRP Package 4 to deepen capital markets, says DOF BusinessMirror 14th Nov 2018
The fourth package of the Comprehensive Tax Reform Program (CTRP) of the Duterte administration will deepen capital markets in the country and enlarge avenues for funding the massive infrastructure needs and key private-sector initiatives, a Department of Finance (DOF) official said.

MAS, SGX leverage blockchain tech to settle tokenised assets The Business Times 12th Nov 2018
The Monetary Authority of Singapore (MAS) and the Singapore Exchange (SGX) have developed Delivery versus Payment (DvP) capabilities to settle tokenised assets across different blockchain platforms. "This will help simplify post-trade processes and further shorten settlement cycles," MAS and SGX said in a joint release. DvP is a settlement procedure where securities and monies are exchanged at the same time, so that delivery of securities only takes place if payment is made.

SET readies digital plan Bangkok Post 10th Nov 2018
The Stock Exchange of Thailand (SET) is studying a plan to jump-start the digital asset ecosystem, aiming to integrate traditional and digital exchanges and attract new fund-raising schemes via a new trading platform. With the rising popularity of digital assets and cryptocurrency exchanges, global bourses have recognised that these could disrupt traditional securities trading if there is no plan to handle such disruption.

MAS, Bank Indonesia set up US$10 billion bilateral financial arrangement Channel NewsAsia 9th Nov 2018
The central banks of Singapore and Indonesia on Monday (Nov 5) signed agreements to set up a US$10 billion (S$13.8 billion) bilateral financial arrangement.  It will enable the two sides to access foreign currency liquidity from each other, if needed, to preserve monetary and financial stability, said the Monetary Authority of Singapore (MAS) and Bank Indonesia in a joint media release.

First ICO portal en route Bangkok Post 8th Nov 2018
The first initial coin offering (ICO) portal is likely to be certified this month, with the first authorised ICO offering possibly in December, says the Securities and Exchange Commission (SEC). "At least one ICO portal will be certified in November, then we can approve each ICO offering, which might start in December," said SEC secretary-general Rapee Sucharitakul.

Peso-renminbi trading to cut business costs, spur flow of Chinese investments BusinessMirror 31st Oct 2018
The direct foreign-exchange trading of the Chinese renminbi (RMB) and the Philippine peso will allow the country to corner a bigger share of China’s $120-billion overseas investments, according to the Department of Finance (DOF). On Tuesday Bank of China Manila and 13 other banks signed a memorandum of agreement (MOA) to create the Philippine Renminbi Trading Community (PRTC).

Vietnamese banks have eye on foreign markets Vietnam News 27th Oct 2018
Several Vietnamese banks were gearing up expansions to foreign markets to tap increasing overseas investment by Vietnamese businesses.

Binance gets funding to push crypto across Southeast Asia Tech in Asia 23rd Oct 2018
The world’s biggest cryptocurrency exchange is making a big move into Southeast Asia. Binance, which in 15 months has gone from nothing to about US$750 million in trades every day, has just secured funding from Vertex Ventures. The Singapore VC said it “will support Binance in building a fiat-crypto exchange in Singapore, as well as other fiat-crypto gateways and services throughout Southeast Asia.”

Brunei’s Islamic capital market showing positive growth Borneo Bulletin Online 23rd Oct 2018
Syariah-compliant assets in Brunei Darussalam have shown remarkable growth in the second quarter of this year compared to two years ago, increasing 82 per cent, according to Minister of Home Affairs Pehin Orang Kaya Seri Kerna Dato Seri Setia (Dr) Haji Awang Abu Bakar bin Haji Apong.

Philippines banks slowly tap green financing Phil Star 23rd Oct 2018
Philippine banks convened with other banks in Southeast Asia to look into green financing as the Asia Pacific region still lacks readiness and resiliency, while only a handful of countries have a firm environmental, social and governance (ESG) standards.

OJK's fintech sandbox Lexology 22nd Oct 2018
Until very recently, the Financial Services Authority (OJK) only regulated peer-to-peer fintech lending platforms (P2P firms). A recently issued OJK regulation (POJK 13/2018) increases its regulatory mandate over fintech firms in a bid to prevent financial sector stability, promote consumer protection, and improve non-competitive practices. POJK13/2018 is effective as of 16 September 2018.

Asset Management

Fintech seen spurring rush towards capital markets The Nation 7th Nov 2018
“In the next five years, with the help of fintech, there will be a democratisation of financial services, meaning that the capital markets will be more accessible to the population than ever before,” the secretary-general of the Securities and Exchange Commission (SEC), Rapee Sucharitakul, said yesterday at an industry event. Only around three million Thais have financial accounts in the capital market, equating to a fraction of the total population. However, the increasing prevalence of fintech will bring more Thai people into the capital market, Rapee told those attending Fintech Challenge 2018: The Discovery.

Vietnam primed for M&A boom as foreign ownership limit eases Nikkei Asian Review 1st Nov 2018
Vietnam appears poised for a surge of investment following the country's move to lift restrictions on foreign ownership of companies, as Asian multinationals realize the benefits of having a presence in one of the region's fastest-growing economies. The planned reform comes as the growing trade war between Washington and Beijing turns Vietnam into a haven for businesses wary about maintaining or expanding production in China.

Singapore’s asset management industry hits $2.39trn International Adviser 29th Oct 2018
Assets in the Lion City grew 19% to S$3.3trn (£1.85trn, $2.39trn, €2.1trn) in 2017, up from S$2.74trn in 2016, according to a Monetary Authority of Singapore report, which noted that the growth rate had quickened compared with the previous five years. Traditional and alternative funds were the drivers that took net inflows to S$220bn, which compares with net inflows of S$116bn in 2016.

Standards launched to enhance transparency, consistency and uniformity of ASEAN Borneo Bulletin Online 26th Oct 2018
The ASEAN Capital Markets Forum (ACMF) recently met in Singapore and launched two key initiatives to drive a more connected and sustainable ASEAN capital market. These initiatives complement the measures introduced by the ACMF on collective investment schemes, corporate governance, disclosure standards and capacity building. The ACMF launched a framework to facilitate cross-border movement of investment advisers, which will allow ASEAN investors greater access to professional services. The first phase of the ACMF Professional Mobility Framework is the introduction of the ‘ACMF Pass’ which will allow licensed professionals to provide advisory services within participating ASEAN jurisdictions, with fast-track registration and no additional licensing requirements.

Specialist argues for LTF deductions Bangkok Post 20th Oct 2018
A move to end the tax deductions for long-term equity funds (LTFs) could severely affect Thailand's stock market as the global stock market bull run is poised to dissipate in 2020, says a mutual fund specialist. The outlook is backed by a lower amount of monetary stimulus measures implemented by global central banks and the rising interest rate outlook, said Voravan Tarapoom, chairwoman of the executive board at BBL Asset Management and honorary chairwoman of the Association of Investment Management Companies.

Banking

Central Bank provides new details on foreign-bank directive The Myanmar Times 15th Nov 2018
Foreign banks will be allowed to expand their branch networks in Myanmar next year, according to two senior officials of the Central Bank of Myanmar (CBM) yesterday. “More foreign bank branches will be allowed next year. Foreign banks can no longer be blocked from doing business in Myanmar because the local banks are not developed or ready yet. We need to focus on building up the financial sector as a whole,” said CBM vice governor U Soe Thein.

Singapore: Three global banks open innovation labs in Singapore MarketWatch 15th Nov 2018
Three global banks on Wednesday launched their respective innovation labs in Singapore on the week of the Singapore FinTech Festival. Bank of China opened its first global fintech innovation lab in Singapore to spearhead its worldwide research and development (R&D) activities as well showcase its latest technologies.

SCB downgrades SME loan view Bangkok Post 9th Nov 2018
Siam Commercial Bank (SCB) expects to fall short of its 7% growth target for small and medium-sized enterprise (SME) loans this year. The bank estimates that SME lending will expand by a mere 3% in 2018 after loan growth at the end of September was less than 1% from the end of last year, said Pikun Srimahunt, senior executive vice-president for the SME segment.

Bank of Thailand weighs SME lending requirements Bangkok Post 27th Oct 2018
The Bank of Thailand is considering whether to allow banks to demand additional collateral to back loans extended to small and medium-sized enterprises (SMEs) that are unable to fully comply with the single account scheme practice.

Bank Indonesia to launch DNDF transactions on Nov. 1 The Jakarta Post 24th Oct 2018
Bank Indonesia will introduce domestic non-deliverable forward (DNDF) transactions on Nov. 1, a policy that is expected to ease external pressure on the rupiah.

BOT to consider suggestions from developers, banks for home loan policy  The Nation 23rd Oct 2018
Participants emphasised the need to adjust the regulatory framework if they benefit the general image of the banks without significantly affecting the system. They hoped that customers will gain the most benefit from these proposals, the BOT’s executives said.  The BOT received suggestions and insights until October 22 from related parties with regard to measures to regulate home loans.  The BOT plans to consider the suggestions and announce measures by November, which will be effective from January 1, 2019 onwards, Sakkapop Panyanukul, director of financial stability unit at the BOT, said.

Thai lenders brace for stricter mortgage rules Nikkei Asian Review 18th Oct 2018
Commercial banks in Thailand are bracing for the central bank's plan to impose tighter standards for mortgage lending, a move that will hit a major part of their business. Among those voicing concern is state-owned Government Savings Bank, the country's fourth-largest lender. The Bank of Thailand should take into consideration the potential impact from the new mortgage rules on the property sector, Chief Executive Chatchai Payuhanaveechai said, according to local media. The CEO warned that the residential market will cool down, with ripple effects for housing-related employment.

Monetary board member says BSP ready to pause tightening BusinessWorld 16th Oct 2018
The Bnagko Sentral ng Pilipinas (BSP) may pause its tightening moves should month-on-month inflation show deceleration, a member of the policy-making Monetary Board said, noting that the impending removal of rice import quotas should help prod overall price increases back to target in 2019.

E-Payments

Banks required to form task force on payment systems Business World 13th Nov 2018
The Bangko Sentral ng Pilipinas (BSP) has required banks and players to set up a task force to ensure that all payment systems will be compliant to global standards on digital financial data. Memorandum M-2018-033 signed by BSP Governor Nestor A. Espenilla, Jr. mandates all participants of the domestic payments and settlements system to set up an industry task force to organize Philippine payments.

Singapore and Thailand QR Payments Will Soon Be Standardised Fintech Singapore 12th Nov 2018
Thanks to a partnership signed between NETS and ITMX, Thailand’s interbank payment infrastructure, Thai mobile wallet users will soon be able to scan the NETS QR Code and NETS Pay Users in turn will also be able to scan the Thai Standardised QR Code.

Can mobile banking overcome Myanmar’s trust issues? South China Morning Post 6th Nov 2018
Myanmar’s financial system has had its share of booms and busts. A 2003 banking crisis that led to a spate of panic withdrawals and a collapse in asset prices still looms large. However, with only 10 per cent of the country’s 53.9 million population owning bank accounts, the prospects for growth are huge. Still, trust remains a critical issue.

Bank Indonesia to Standardize QR Code Payment ASEAN Business News 25th Oct 2018
Quick Response Code (QR Code) is increasingly being used as one of the digital payment methods in Indonesia besides EDC (Electronic Data Capture). QR Code is a method of transaction which involves scanning through a device or other infrastructure owned by the buyer or the merchant. In Indonesia, several companies engaged in payments system services and providers of electronic wallets use the QR Code method.

Cambodia Sees Growing Fintech Industry; Laos Still Lacks Behind Fintech Singapore 24th Oct 2018
Cambodia’s startup ecosystem is experiencing growth, with tech investment on the rise. By Q2 2018, Cambodia had seen at least 12 tech startup funding announcements, or exactly a 140% increase from at five in the previous year, according to a new report by Mekong Strategic Partners and Raintree Development. The report, launched during the inaugural Cambodia Tech Summit 2018 in Phnom Penh last week, details the country’s tech startup landscape by category with fintech leading as the most crowded sector with more than 50 active startups operating. These include Morakot, Banhji, Pi Pay, BongLoy and SmartLoy.

Gov’t wants more clearing houses for digital deals Philstar 24th Oct 2018
The Bangko Sentral ng Pilipinas is rushing the launch of more automated clearing houses (ACHs) particularly on government transactions as it aims to increase the level of cashless transactions to 20 percent by 2020 from the current level of about one percent. Vicente de Villa III, officer-in-charge of the central bank’s financial technology sub-sector (FTSS), said there is a need to launch more ACHs to meet the target of the National Retail Payment System (NRPS) to establish a safe, efficient, affordable, and reliable e-payments system.

GSB platform to pool small shop purchasing Bangkok Post 23rd Oct 2018
State-owned Government Savings Bank (GSB) aims to attract 60,000 small shops and One Tambon One Product companies to participate in its sponsored online-to-offline (O2O) e-commerce platform to raise their bargaining power in purchasing goods from manufacturers. O2O-Village Grocery, sponsored by GSB, enables participating merchants to offer both online and offline sales channels through smartphones, tablets and point-of-sale (POS), with the bank taking responsibility for payments and settlements via debit and credit cards, QR code mobile banking and e-wallets, said GSB president and chief executive Chatchai Payuhanaveechai.

PayNet to launch DuitNow money transfer service in December The Edge Markets 22nd Oct 2018
Payments Network Malaysia Sdn Bhd (PayNet) and some 14 banks are expected to offer DuitNow, a new electronic payment service that allows customers to transfer money securely and instantly using recipients mobile number.

Mobile providers to join e-payment services Viet Nam News 22nd Oct 2018
Prime Minister Nguyễn Xuân Phúc has asked Viettel and VNPT to complete applications for submission to the State Bank of Việt Nam (SBV) to participate in e-payment mechanisms in Việt Nam. Earlier, the Ministry of Information and Communications and the two biggest telecom providers in Việt Nam – Viettel and VNPT – proposed that the PM instruct the central bank to allow them to offer financial switching services and electronic clearing services.

Nets launches PayCollect, an online billing and collections system for businesses The Straits Times 15th Oct 2018
Nets on Monday (Oct 15) launched PayCollect, an online billing and collections service that will allow businesses to issue invoices and collect payments electronically.

Insurance

Singapore sets up world's first commercial cyber risk pool Channel NewsAsia 29th Oct 2018
Singapore is setting up the world’s first commercial cyber risk pool as part of efforts to develop the region's capacity to deal with threats from cyber attacks, Finance Minister Heng Swee Keat announced at the 15th Singapore International Reinsurance Conference on Monday (29 Oct). “The pool will commit up to US$1 billion in capacity, and bring together both traditional insurance and insurance-linked securities markets to provide bespoke cyber coverage," he said.

Insurance industry progressing at slow pace, foreign competition needed: AMI The Myanmar Times 29th Oct 2018
In August, U Zaw Naing, secretary of the Insurance Business Regulatory Board (IBRB), which was established by the Ministry of Planning and Finance in 2016, said the board will allow foreign insurance companies to provide life and general insurance policies in the country in 2018-19. He said the board is now considering proposals by international consultants to help it screen and review foreign insurance providers before permitting them to compete in the local market.

Thailand: Insurance institute to pave the way for business in neighbouring markets Asia Insurance Review 26th Oct 2018
Thailand Insurance Institute (TII) has plans to provide training in neighbouring countries so as to pave the way for Thai insurance companies to do businesses in nearby markets. TII director Mr Tadthep Sujitjorn said the organisation will invite representatives of insurance companies in Cambodia, Laos, Myanmar and Vietnam (CLMV) to join its education and seminar programmes on risk assessment, insurance products and business concepts. The programmes could be held either in Thailand or abroad, he said.

Indonesia: Insurance regulator calls for new ideas to grow industry Asia Insurance Review 26th Oct 2018
The Indonesia insurance regulator has called on all sectors of the industry to come up with new ideas to help jump-start the development of the sector. Mr Riswinandi, executive head of Non-Bank Financial Institutions Supervision at OJK or the Financial Services Authority, made a bold keynote address at the 24th Indonesia Rendezvous in Bali yesterday in which he said, “The OJK is very open to all new ideas from stakeholders.”

Indonesia Among World's Most Underinsured Countries Jakarta Globe 23rd Oct 2018
Indonesia has a $14.6 billion gap between existing insurance coverage and the actual amount it would cost the government and businesses to rebuild and recover from major disasters, according to the latest report by global insurance firm Lloyd's and the Center for Economics and Business Research.

TII aims to build regional operations of Thai firms Bangkok Post 23rd Oct 2018
Thailand Insurance Institute (TII) plans to help pioneer insurance businesses in neighbouring countries to expand future business opportunities for local insurance companies. Thailand is Asean's second-largest market for non-life insurance business after Singapore, but Thailand's role in regional insurance is quite minimal, said TII director Tadthep Sujitjorn.

Philippines: Insurance industry adopt FinTech Asia Insurance Review 19th Oct 2018
The Philippine insurance industry is embracing FinTech as it adapts to changes brought about by the wave of global technological advancements. Insurance Commissioner Mr Dennis B Funa told BusinessMirror, “The insurance industry will surely continue to embrace FinTech. It cannot be denied that the evolution of technology has helped our regulated entities to spread their reach. Our people today rely on technology in going about their everyday lives, thus, it is crucial that they have access to insurance products and services at their own convenient time.”

President rebukes minister, state insurer over health insurance deficit The Jakarta Post 17th Oct 2018
President Joko “Jokowi” Widodo reprimanded Health Minister Nila F. Moeloek and Health Care and Social Security Agency (BPJS Kesehatan) president director Fahmi Idris on Wednesday for the ongoing deficit in the state health insurance (JKN).

Market Regulation

OJK issues new regulation to improve customer protection in the financial services sector www.hoganlovells.com 15th Nov 2018
Through its recently-issued Regulation No. 18/POJK.07/2018 ("POJK 18/2018"), the Indonesian Financial Services Authority (the "OJK") now requires financial service companies (pelaku usaha jasa keuangan or "PUJKs") to establish customer complaint handling units and procedures setting out in detail how customer complaints will be handled. Issued on 10 September 2018, POJK 18/2018 will come into force on 10 March 2019 (save in respect of private pawnshops, where it will apply as of 1 July 2020).

Vietnam to lift foreign ownership limit on listed companies Reuters 14th Nov 2018
Vietnam plans to lift some limits on the foreign ownership of listed companies, the country’s stock market regulator said on Wednesday, in a move analysts said could boost overseas interest in one of Asia’s fastest-growing economies.

Singapore to launch tokenised securities settlement system The Asia Times 12th Nov 2018
The Monetary Authority of Singapore (MAS) and the Singapore Exchange (SGX) have been working together to develop a Delivery versus Payment (DvP) system to ease the settlement of tokenized securities payments.

Thailand’s Deputy Prime Minister Calls for More Cryptocurrency Regulations CCN 10th Nov 2018
The Deputy Prime Minister of Thailand, Wissanu Krea-ngam, has called for the enhancement of cryptocurrency regulations in the country. Speaking during the fourth regional Counter-Terrorism Financing Summit which took place in Bangkok, Wissanu argued that there was a need for more domestic and international legal measures to be put in place to prevent the misuse of cryptocurrencies.

BSP: Philippine banks ready for stricter global standards Business World 9th Nov 2018
Banks in the country are more than ready to comply with global standards on capital and liquidity buffers due in January, a central bank official said, with latest data showing they are well above the required levels. Universal and commercial banks have more than enough funds to meet the requirements under the Basel III framework, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi G. Fonacier said, months before these are imposed on Jan. 1, 2019.

Myanmar eases restrictions on foreign bank lending Reuters 9th Nov 2018
Myanmar’s central bank on Thursday announced new rules allowing foreign banks to lend to local businesses, bringing further reforms to the country’s stunted banking sector. In a letter signed by deputy governor Soe Thein, the bank said the decision was made to give local businesses more access to financing. Representatives of the bank could not be reached for comment. “Finally, the old system of restrictive access to finance is being stripped away. Bit by bit…,” said Sean Turnell, an economic advisor to Myanmar leader Aung San Suu Kyi.

ASEAN pulls ahead of Japan in capital market reform Nikkei Asian Review 7th Nov 2018
Since being hit hard by the 1997 currency crisis followed by the 2008 global financial crisis, some members of the Association of Southeast Asian Nations have been hastening reforms in capital markets and corporate governance. Japan now finds itself lagging in these areas as companies in ASEAN promote more women, take on more outside directors, and become increasingly transparent.

4 Malaysia central bank officials put on leave pending probe into RM2 billion land purchase The Straits Times 31st Oct 2018
Four Bank Negara Malaysia officials have been told to go on leave pending investigations into the January purchase of land valued at RM2 billion (S$660 million). The four were put on leave as the authorities including the Malaysian Anti-Corruption Commission investigate further into how the sale was concluded.

New requirements on the use of cloud computing services in banking sector Baker McKenzie Client Alert 24th Oct 2018
The State Bank of Vietnam (SBV) recently issued Circular No. 18/2018/TTNHHH providing for assurance of information systems safety and security in banking operations ("Circular No. 18").

Singapore regulator takes a stand against shadow banking by fintechs Freshfields Bruckhaus Deringer 18th Oct 2018
As banking regulations are progressively calibrated and applied onto fintechs in the region, the Monetary Authority of Singapore (MAS) has revealed last week its plans to prevent shadow banking by fintech companies. This follows the trend of steady encroachment by large fintechs into the sphere of traditional financial services offered by banks.

TFA: Fintech law to be enacted this year Bangkok Post 17th Oct 2018
The Fintech Act is expected to be announced and become effective by the end of this year, making it easier for the public to process information and create a fintech platform, says the Thai Fintech Association (TFA). TFA chief executive Anon Aunsinmun said the law will make it easier for investors, financial institutions and the public to obtain information and data from government organisations, although this is not personal information.