Financial Services Update: Indonesia's New Banking Bill Subject of Hearing

• June 16: Roundtable Discussion on Infrastructure in ASEAN: Opportunities and Challenges for U.S. Businesses
  Southeast Asia is in dire need of infrastructure investment: it is estimated that approximately $60 billion is needed each year through 2022 to meet physical infrastructure needs in the region, much of it necessary to support continued economic development and regional integration in the Association of Southeast Asian Nations (ASEAN).  China’s movement forward with the creation of the Asian Infrastructure Investment Bank (AIIB)—which was originally announced in Indonesia—has refocused international attention on the vital role played by international financial institutions, private-public-partnerships, and the private sector in addressing infrastructure financing needs.  The commercial part of the U.S. pivot to Asia has also included a focus on physical and regulatory infrastructure, connectivity, and other Asian development needs in ASEAN and the Lower Mekong.  This event will examine trends, opportunities and challenges in funding infrastructure development in the ASEAN region, including national policies that support or hinder investment, the role of multilateral banks, China’s increased focus on infrastructure investment, the comparative advantage that U.S. companies have in the infrastructure sector, and the role of corporate social responsibility in large infrastructure projects.
   
• July 1: Conference on Investing in Vietnam, featuring H.E. Dinh Tien Dzung, Minister of Finance
  Join Minister of Finance Dzung and a delegation of key Vietnamese financial officials including Mr. Vu Bang, Chairman of the State Securities Commission, in discussing investment opportunities in Vietnam's financial sector.  Recent developments in Vietnam's macroeconomic outlook as well as the Ministry of Finance's economic growth and financial sector development strategies will be covered in this half-day conference featuring an opening speech from the minister, two panel sessions of Vietnamese and U.S. experts, and a concluding luncheon hosted by the Ministry of Finance and State Securities Commission.  A full tentative agenda can be found here and a formal letter of invitation can be found here.
   
• July 2: Roundtable Discussion with Mr. Phung Ngoc Khanh, Director General, Insurance Supervisory Authority of Vietnam
  Join the Council's Financial Services Committee in a roundtable discussion with Director General Phung Ngoc Khanh of Vietnam's Insurance Supervisory Authority (ISA).  The Director General would like to speak with Council members on developments and opportunities in Vietnam's dynamic insurance sector.  More on the ISA can be found here.
   

Indonesia's New Banking Bill Subject of Hearing

• On June 11, the House of Representatives’ Commission XI for financial affairs held a public hearing on Indonesia’s proposed banking law.  In attendance were representatives from the Foreign Banks Association in Indonesia (FBAI).  The hearing was led by MP Jon Erizal, Deputy Chair of Commission XI, who heads the commission's working committee on the bill.  In his opening remarks, Mr. Erizal emphasized that the draft currently under review is entirely new, rather than having been based on the previous parliament’s version.  He added that the input of industry stakeholders was necessary to ensure that the completed bill was the result of an informed policy-making process.  During the hearing, the FBAI addressed five portions of the draft bill: the requirement to incorporate as an Indonesian entity, limitations on foreign equity, the obligation to provide loans to small and medium-sized enterprises, consumer data protection and secrecy, and legal penalties.  The FBAI proposed that branch offices of foreign banks in Indonesia be permitted to retain their status, and that matters related to such entities be regulated separately by the Financial Services Authority (OJK).  The FBAI also urged the Commission to drop from the bill language that would establish a definitive cap on foreign ownership of Indonesian banks.  It suggested instead that regulation of foreign equity be conducted solely by the OJK in light of banks’ adherence to clearly-defined standards of corporate governance and transparency.  The FBAI also said that the mandatory provision of loans to SMEs was a matter best left in the hands of the OJK.  FBAI representatives recognized the necessity of data disclosure rules, but urged that these rules protect customers’ confidentiality.  As envisaged by the FBAI, mandatory disclosure rules would only apply for tax-related offenses.  Finally, the FBAI proposed that the schedule of penalties for violation of the banking law be harmonized with the Indonesia’s revised criminal code, in consultation with legal experts and the Indonesian Bankers Association.  Lawmakers said they welcomed private sector input, but urged the FBAI to substantiate its proposals with objective analysis.  They further emphasized that Parliament regards the provision of loans to SMEs as a policy priority, and encouraged FBAI to find ways to contribute in supporting such businesses.  In closing, the Commission said it would give the FBAI one more week to provide additional input on the bill.

Vietnam's Derivative Market Outlined in New Regulation

• Vietnamese Prime Minister Nguyen Tan Dung recently proclaimed Decree 42/2015/ND-CP that laid the foundation for the formation of a derivatives market in Vietnam tentatively scheduled to begin operations in 2016.  The decree listed the regulations for the market’s operations and the requirements needed for companies, brokerage & securities firms and banks to participate.  For example, brokerage firms will need at least US$37 million in chartered capital and can trade derivatives for their own profit.  Companies that wish to trade derivatives for profit are required to have chartered capital amounts of at least US$27.8 million.  Banks and securities firms will need to clear a higher equity threshold amount to be general clearing members (US$324 million for banks and $55.5 million for securities firms) than to be direct clearing members (banks: US$231.5 million and securities firms: $41.6 million).  The idea of a Vietnamese national derivatives market has been floated since 2006 when derivatives trading was recognized under the Law on Securities, but plans to implement a market did not begin until last year.  Vietnamese officials have received assistance and support from Japanese and British experts in setting up the market.  The derivatives market will only cover futures, listed options and forward contracts and other derivatives based on underlying assets that are already traded on one of the two Vietnamese stock exchanges.  The Vietnam Securities Depository will serve as the central clearing house for all derivatives transactions and clearing members will have to deposit and maintain a sufficient maintenance margin in cash or securities with them.  They will also have to provide money towards a clearing fund and a provisional settlement risk fund to cover obligations in case of an insolvency.  Derivatives based on non-securities assets and swaps on interest rates and foreign currencies will not be available for trading at the market’s opening, but may be introduced in the future.

Philippine Government Presents E-Commerce Roadmap

• The Philippine’s Department of Trade and Industry (DTI) will present its draft 10-year E-Commerce Roadmap at the AIM Conference Center in Makati on June 15, 2015.  This presentation comes after the DTI confirmed in February 2015 its commitment to the creation of an E-Commerce roadmap, announcing it intended to gather input from industry and government stakeholders in a series of seminars and webinars.  These meetings took place on 15 December 2014, 11 May 2015, 18 May 2015, and 22 May 2015, according to the DTI website.  According to Undersecretary Prudencio Reyes Jr., who has led the seminars, the DTI roadmap will focus on coming up with new strategies to propel the Philippines to maximize the growth of e-commerce.  The roadmap will likely include measures to engage small and medium enterprises in e-commerce and improve education around e-commerce.  According to the DTI, the Philippine internet market in 2014 accounted for P1.4 trillion (US$31.1 billion), or 8-13 percent of the country’s Gross Domestic Product (GDP).  The e-commerce industry is expected to grow to USD 2B by 2015.  The e-commerce industry however faces major challenges such as cumbersome rules and procedures and the low rate of credit-card use in Philippines, which in 2012 was 5 percent of the population.  A DTI webinar on the proposed content of the roadmap can be found here and slides from the webinar can be found here.

SGX Appoints New CEO

• Earlier this month, the Singapore Exchange (SGX) announced it had selected veteran Asian banker Loh Boon Chye to succeed outgoing CEO Magnus Bocker.  Mr. Loh is well regarded in regional financial circles, and previously served as a director on the SGX.  From 2012 until March of this year, he was Deputy President and Head of Global Markets for Asia-Pacific at Bank of America’s Merrill Lynch division.  His move comes as the SGX seeks to boost equity-trading volume, which has suffered amid a lack of large-scale IPOs, technical glitches, and a 2013 crash which wiped out US$6.83 billion in market value.  During his five-and-half-year tenure, Mr. Bocker sought to improve trading volumes through connections with other Asian exchanges within and outside of ASEAN.  Despite some successes, his strategy faced significant challenges given the tendency of many regional governments to regard market operators as national assets.  Bocker’s most ambitious venture, a US$9 billion bid for the Australian Securities Exchange, was blocked in 2011 by the Australian government on the grounds that a takeover was not in the country’s interest.  To remain competitive, the SGX increasingly turned to derivatives trading based on a range of Asian assets.  Recent years have witnessed derivatives trading grow to record levels, even as overall trading volume has stagnated.  SGX data indicate that daily securities turnover in May was about US$820 million, a decline of 2 percent from a year ago, and a drop of 9 percent when compared to April.  Market participants have characterized the problems confronting the SGX as structural in nature, and many predict the bourse’s new CEO will have to effect substantial changes to revitalize its fortunes.

OJK: Financial Literacy Program Panders to Wrong Demographic Tempo 11th Jun 2015
The Financial Services Authority (OJK) said that the financial education programs being carried by industry players cater to the wrong demographic. More than 27 percent of these programs are aimed at students, while over 30 percent are focused on the Greater Jakarta area. Meanwhile, industries are only targeting 12.07 percent of SME industries, 15.23 percent of professional workers, and 7.26 percent consumers. OJK board of commissioners' member for education and consumer protection Kusumaningtuti S. Soetiono said the statistics were revealed through the financial services industry's quarterly report submitted to the regulator.

Indonesia’s new roadmap for Islamic finance boost Brunei Times 11th Jun 2015
Indonesia's capital market regulator has published a five-year strategy for the Islamic finance industry, its latest effort to shake the sector out of its niche status in the world’s most populous Muslim country. The roadmap from Indonesia’s financial services authority, Otoritas Jasa Keuangan (OJK), charts an extensive agenda ranging from reducing fees on Syariah-compliant products to developing education and training programmes. It aims to encourage an Islamic finance market that lags behind Indonesia’s peers: Islamic banks hold roughly five per cent of total banking assets in the country, compared with more than 20 per cent for neighbour Malaysia and well behind the 50 per cent in Saudi Arabia. Authorities want Indonesia’s Islamic banks to hold at least 15 per cent of the market by 2023, an ambitious target considering the sector’s growth is stalling.

SEC approves rollout of Philippine bourse's new trading platform InterAksyon 11th Jun 2015
The Securities and Exchange Commission (SEC) has cleared the rollout of the local bourse’s new trading platform. In a statement, the Philippine Stock Exchange Inc. (PSE) its PSEtrade XTS will be launched on June 22 following receipt of the SEC approval. “The PSE has been working closely with the SEC on the implementation of the new system to ensure that their requirements from a regulatory standpoint are addressed. We shall continuously provide the SEC with updates and information they need as we launch PSEtrade XTS to ensure its successful implementation,” PSE president Hans B. Sicat said. The launch comes nearly a year after the PSE announced that it would adopt NASDAQ’s X-stream Trading technology to power the local bourse’s new trading engine.

Indonesia to Unleash Loan Funds as Micro Lending Rates Cut Bloomberg 11th Jun 2015
Indonesia wants to unleash 30 trillion rupiah ($2.3 billion) of new loans for small businesses and halve some bank micro lending rates to help revive an economy running at its slowest pace in five years. The government has asked state-owned lenders to cut lending rates for so-called Kredit Usaha Rakyat, or financing given to small businesses that may not meet bank criteria, as part of the package, said Gatot Trihargo, a deputy at the State-Owned Enterprises Ministry, in an interview in Jakarta on Wednesday. Rates for such loans can be as high as 24 percent. The move is the latest by policy makers who are trying to spur flagging growth in Southeast Asia’s biggest economy, having already loosening lending rules for mortgages and with plans to cut corporate tax.

NBC, JFSA to extend supervisory support The Phnom Penh Post 11th Jun 2015
The National Bank of Cambodia and the Japan Financial Service Agency agreed yesterday to extend their cooperation on sharing experience and expertise in the areas of banking and financial sector supervision in the Kingdom. Neav Chanthana, deputy governor of National Bank of Cambodia (NBC), said that their Japanese counterparts had helped train NBC staff for years; however, today’s agreement would take that cooperation to the next step. “Our exchange of the letter today is also a testimony of both our commitment to expand and deepen our traditional bilateral cooperation in financial sector,” she said.

The Philippines takes to banking without ATMs Gulf News 10th Jun 2015
As a schoolgirl in Manila, Vilma Fetesio would stand at the dock each month with her brother and other children, waiting for boatmen to bring them money from their parents on other islands. Sometimes, in rough weather, the boats didn’t come. “We waited at the port the whole afternoon, at times the whole day,” said Fetesio, now a teacher back on her native Culion island. “During the typhoon season when no boats sailed, some of us would go hungry.” Culion, a day’s journey across the South China Sea from the capital, once housed the world’s largest leper colony and was called “the land of no return”. It’s one of 604 municipalities in the Philippines that don’t have a bank, a deficit the monetary authority is trying to overcome by encouraging the adoption of mobile phone transactions.

RI’s inclusive finance targeted to rise to 90% by 2017 The Jakarta Post 9th Jun 2015
The Financial Services Authority (OJK) is targeting that Indonesia’s inclusive finances, which include people’s banking and financial literacy as well as banking participation, will reach 90 percent by 2017. “We will continue to educate people and push them to become banking consumers. We will also continuously push the related parties to become bank agents,” OJK commissioner council chairman Muliaman D. Hadad said as quoted by Antara news agency after he opened a finance literacy international seminar in Nusa Dua, Bali, on Tuesday.

Malaysian ringgit may continue to be under pressure: Analysts Channel NewsAsia 12th Jun 2015
The Malaysian ringgit has been under pressure in recent months, hurt by weak commodity prices and a strengthening US dollar. Analysts said the trend may continue, with additional factors such as movements in bond markets and uncertainty about the country's fiscal budget weighing on sentiment. However, they also noted that volatility in the ringgit has been due more to market adjustments rather than a crisis-style sell-off. Singaporeans are looking to take advantage of a sliding ringgit, which has been trading near all-time lows against the Singapore dollar. In Thursday (Jun 11) trade, the ringgit was trading at 2.78 to the Singapore dollar.

Ringgit’s decline halts, expected to remain weak The Star 11th Jun 2015
The ringgit has recovered slightly from a nine-year low against the US dollar, as the greenback weakened against most other major currencies in the world. The ringgit rose after Bank Negara’s assurance that the weakness of the currency was temporary and that the current levels were not reflective of the country’s long-term economic fundamentals. It closed at 3.7525 rising 0.52%, against the greenback yesterday. This was in tandem with the regional trend, as the US dollar fell against other major currencies.

New SGX CEO appointment welcomed by industry players Channel NewsAsia 10th Jun 2015
Singapore Exchange (SGX) is set to launch a new chapter next month, with homegrown veteran banker Mr Loh Boon Chye taking the helm. Industry players said they are optimistic that the new CEO will be able to take the bourse forward, with necessary reform. However they also said he has his work cut out for him, as there are challenges ahead. Keppel DC REIT's IPO on the mainboard last year was Singapore's second largest in 2014, raising more than S$500 million. As a whole, the IPO market in Singapore has been languishing, and this year, there have been only three listings so far, raising about S$55 million.

BSP to let peso weaken in value vs US dollar Philippine Daily Inquirer 10th Jun 2015
Monetary authorities will allow markets to chip away at the peso’s value amid heightened risk aversion among investors, who remain on edge due to uncertainty over global financing conditions. In line with the movement of other Asian currencies, the peso has fallen in recent weeks as the dollar rallies in anticipation of a rate increase by the US Federal Reserve. At the start of the week, the peso fell to a five-month low of 45.025-to-$1, reflecting investors’ growing preference for the dollar to the detriment of emerging-market asset classes. “Markets tend to have heightened volatility when new information comes or is released, especially when such relates to the Fed,” Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said.

Philippine stocks decline to 5-month low Business Mirror 9th Jun 2015
Philippine stocks fell for a fourth day, sending the benchmark index to the lowest level since January, as capital outflows continue amid concern economic growth is weakening. The Philippine Stock Exchange Index fell 1.4 percent to 7,379.5 at 10:46 a.m. in Manila on Tuesday, bound for the lowest close since January 12. JG Summit Holdings Inc. and SM Prime Holdings Inc. led losses, declining at least 2.7 percent. International investors sold a net $11.8 million of shares on Monday, following six straight weekly outflows. “Investors are looking for something to hold onto, to overcome the first-quarter GDP disappointment,” said Justino Calaycay, an analyst at Manila-based Accord Capital Equities Corp. “A big part of investor confidence has been lost because of weak GDP, and a weakening peso is eroding gains of international investors with exposure to the Philippines, fueling further foreign selling.”

Phl banking system ‘stable’ – S&P The Philippine Star 12th Jun 2015
Standard & Poor’s Ratings Services has classified the Philippine banking system as ‘stable.’ “We classify the banking sector of Philippines in Group ‘7’ under our Banking Industry Country Risk Assessment (BICRA) criteria. Other countries in the group include Indonesia, Portugal, Iceland, and Ireland,” it said in a report released yesterday. S&P said the credit quality of the Philippine banking system is improving but faces several risks. “We feel poor transparency, weak corporate governance, and inefficient legal infrastructure may limit any material reduction in credit risk. In addition, credit risk in the system may increase if acceleration in property prices or credit growth is prolonged,” S&P said.

Asian banks see big business in Vietnam's growing foreign sector Voice of Vietnam 12th Jun 2015
Foreign banks, especially those from Asia, are strengthening their foothold in Vietnam to cater to a growing number of multinational companies and crowd out local lenders. In March, Malaysia's Public Bank Bhd was allowed to acquire the stake owned by Vietnamese lender BIDV in their US$62.6 million joint venture VID Public Bank. After the deal, the Malaysian bank will turn the Vietnam-based venture into a 100% foreign-owned bank. Singapore's United Overseas Bank (UOB) has also submitted an application for upgrading its branch in Ho Chi Minh City into a wholly foreign-owned bank in Vietnam. However, the request has not been approved.

Foreign banks go native with a flourish in Myanmar Nikkei Asian Review 11th Jun 2015
Yangon saw a spate of ribbon-cutting ceremonies in May, following the Central Bank of Myanmar's decision last October to allow nine foreign banks to open branch offices for limited commercial operations for the first time since the 1960s. Some of the foreign bankers holding the scissors chose to wear traditional longyi sarongs and matching silk jackets for the occasion, but they were not in Myanmar for the fashion. "The country's treasure has now opened up and, with lots of natural resources and being very nicely located, there are tons of projects that need financial support," said Hiroshi Minoura, vice chairman of Sumitomo Mitsui Banking, looking comfortable in his exotic new Myanmar garb.

Indonesia to Halve Lending Rates on Government-Backed Micro Loans The Jakarta Globe 11th Jun 2015
Indonesia will halve lending rates for some small businesses, the finance minister said on Thursday, as part of efforts to revive growth in Southeast Asia’s biggest economy. Bambang Brodjonegoro confirmed reports that lending rates for small businesses would be cut to 12 percent from 24 percent. He did not say when the lower rates would take effect. Vice President Jusuf Kalla said on Wednesday that state-controlled banks taking part in a government-sponsored micro loan program had agreed to the lower rates with some help from government subsidies, according to media. “The government seems to view banks as an agency of economic growth instead of a profit-oriented business and willing to sacrifice profits for the sake of growth,” said Angga Aditya Assaf, Jakarta-based analyst for Trimegah Securities.

Foreign Investors Seek to Raise Investment in Domestic Banks Stoxplus 10th Jun 2015
Foreign investors have shown great interest in Vietnam banks, local newswire Bao dau tu reported. Recently, banking stocks have recovered. Therefore, investment funds such are VinaCapital are considering increasing holdings of bank shares. Currently, VOF Investment Limited (VinaCapital) is the third largest shareholder of Eximbank with 5.02% charter capital. Andy Ho, VinaCapital’s Chief Executive Officer (CEO), said that VinaCapital will continue to pour capital into the banking and financial sector of Vietnam if there are opportunities.

Thailand’s Central Bank Stands Pat Wall Street Journal 10th Jun 2015
Thailand’s central bank kept its benchmark interest rate unchanged on June 10, following two consecutive surprise cuts to help support the economic recovery. The Bank of Thailand’s Monetary Policy Committee voted unanimously to maintain the one-day repurchase rate at 1.5%. The central bank made two back-to-back 25-basis-point cuts at its previous meetings in March and April.

Ampon named Bank of Thailand board chairman Bangkok Post 9th Jun 2015
The cabinet has approved the appointment of Ampon Kittiampon, secretary to the cabinet, as chairman of the board of the Bank of Thailand for the second term. Mr Ampon served in that capacity from Sept 2, 2013 and his term ended on May 31, 2015. Deputy Prime Minister MR Pridiyathorn Devakula had approved the appointment earlier and asked the Finance Ministry to propose the appointment to the cabinet.

Adopt E-Payments, BNM Urges SMEs Bernama 10th Jun 2015
The Small-and-Medium Enterprises (SMEs) have been urged to reap the benefits of cost savings and enhance their competitiveness in the market by rationalising their business processes through the adoption of e-payments. Making the call, Bank Negara Malaysia (BNM) said it organised a National e-Payment Roadshow in Johor Baharu today in collaboration with the Association of Banks in Malaysia, the Association of Islamic Banking Institutions Malaysia and the National Cards Group. Concurrent with the roadshow, a township campaign to encourage small businesses to accept payment cards will begin in Johor Baharu, Muar, Batu Pahat, Skudai and Kluang.

Malaysia's online sales in 2020 to beat analyst projection The Star 9th Jun 2015
The Malaysian Communications and Multimedia Commission (MCMC) expects Malaysia's online retail sales figures by 2020 to exceed the 6.1% projection by a market research analyst, driven by the growth in broadband penetration and rising disposable incomes. MCMC chairman Datuk Seri Dr Halim Shafie said research firm, Frost and Sullivan, had estimated that 6.1% of retail sales in Malaysia would come from online system by 2020. "MCMC thinks the value is going to be lot more than this assumption," he said, adding that online retail sales accounted for 1% in 2013. He said Frost and Sullivan had forecast online retail sales in Malaysia to grow seven times from RM2.97 billion in 2013 to RM22.6 billion in 2020.

Singapore: Swiss Re & NUS to build insurance and big data expertise Asia Insurance Review 12th Jun 2015
Global reinsurer Swiss Re has signed an agreement with the National University of Singapore (NUS) to collaborate in joint activities using big data, business analytics and information technologies. The three-year partnership is the first such initiative undertaken by a reinsurance company in Singapore. Swiss Re will work with the Business Analytics Centre, the Business School, the School of Computing and Saw Swee Hock School of Public Health at NUS. The unprecedented public-private partnership will incubate innovative solutions that can address large and complex risks caused by digitisation, societal and urban challenges. These include ageing population, advances in healthcare, changing risk landscape created by the Internet of Things (IoT), as well as natural catastrophes faced by many countries in Asia.

Dai-ichi Life wants bigger Indonesia presence but won't bid for BRI unit Reuters 10th Jun 2015
Dai-ichi Life Co, Japan's second-largest life insurer, is keen to further build its presence in Indonesia but is not interested in bidding for a stake in Bank Rakyat Indonesia's (BRI) insurance unit, its president said. Dai-ichi Life bought 40 percent of Indonesia's Panin Life for about $250 million in 2013 - part of a two-pronged M&A strategy that seeks to sow the seeds of future growth in Asia as well as tap developed markets like the United States for more immediate profit contribution. Indonesia's insurance market is one of the fastest growing and most under-insured markets in Asia, attracting much interest from global insurers battling sluggish growth at home.

Vietnam: Finance Ministry proposes non-life insurers be listed Asia Insurance Review 9th Jun 2015
Only seven out of 31 non-life insurance and reinsurance companies in Vietnam are listed on the stock exchange at present, and the Vietnamese government is keen for more of them to be listed so as to increase transparency and improve the business environment in the insurance sector. The seven are Bao Viet Holdings (BVH), Petrol Vietnam Insurance (PVI), Bao Minh (BMI), Petrolimex Joint Stock Insurance Company (PJICO), Post and Telecommunication Joint Stock Insurance Corporation, BIDV Insurance Company (BIC), and Vietnam National Reinsurance Corporation (VINARE), according to a report in VietNamNet Bridge. The Ministry of Finance has proposed that non-life insurance companies to be listed on the stock exchange.

Market Regulation
Insiders to meet to discuss action on the kyat Myanmar Times 12th Jun 2015
The Central Bank of Myanmar has called a meeting for today with public and private sector experts to discuss taming exchange rate volatility, according to several sources. The kyat has steadily declined this year against the dollar, though the drop had been especially swift this month. It traded around K1137 on informal markets on June 1, but had reached near K1267 per dollar on June 10 around 1:30pm, before strengthening back to K1237 to close the day. Yesterday, the kyat continued to strengthen – as of deadline, it had appreciated past K1200. The Central Bank is working to intervene in the market to prevent volatile swings.

Bankers clash on plan to cap foreign ownership Jakarta Post 12th Jun 2015
Executives of local and foreign-owned banks have expressed their contradictory stances on an idea to restrict foreign ownership in Indonesian banks as well as the operation of foreign banks as stated in a new draft of the banking bill. They expressed their opinions during a hearing with House of Representatives’ Commission XI on Thursday discussing whether such restrictions should be stated in the new draft, which will replace the old one. The old banking bill, which was proposed in 2013 under the House’s initiative, was supposed to replace the existing banking law that has been dubbed too liberal.

BSP plots new methods to enhance open market operations The Philippine Star 12th Jun 2015
The Bangko Sentral ng Pilipinas will soon implement new methods to enhance its open market operations, its top official said. BSP Governor Amando Tetangco Jr. said this “major reform” intended to improve efficiency in the conduct of monetary policy is also meant to further develop the domestic money market. “We are developing new approaches to enhance open market operations and start to move away from a high reserve requirement regime in the context of establishing an interest rate corridor system,” Tetangco said. “The objective is to achieve greater efficiency in the conduct of monetary policy but it should also pave the way for the full development of the domestic money market that is the anchor of real price discovery and better liquidity management for the broader market,” he explained.

New laws to govern derivatives sector Viet Nam News 11th Jun 2015
The Prime Minister last Friday issued Decree 42/2015/ND-CP on derivatives and the derivative trading market in Viet Nam, which will become valid next month. Under the new decree, companies that trade derivatives for profits on the derivative trading market must have at least VND600 billion (US$27.8 million) in chartered capital. Brokerage firms on the new market should have at least VND800 billion ($37 million) in chartered capital and will be allowed to trade derivatives for their own profits. Firms should also meet the requirements set by the Ministry of Finance on profit, disposable capital, and professional procedures.

Phl urged to lift bank secrecy law The Philippine Star 11th Jun 2015
The Organization for Economic Cooperation and Development (OECD) is urging the Philippines to lift its bank secrecy law to strengthen the country’s tax system and fight tax evasion while meeting global standards in tracking tax fraud. The Philippines needs to put in place a legal mechanism by lifting the bank secrecy law that will allow the exchange of information necessary in transparency, OECD Center for Tax Policy and Administration head of global relations Richard Parry said in a briefing during the two-day Workshop on Fiscal Management through Transparency and Reforms in Bagac, Bataan. “It is possible to do it. The political will is needed for the Philippines to meet international standards in that area,” he said. The bank secrecy law is a special legislation that requires banks and financial institutions to protect and keep confidential customer information from third parties even if these are government or tax authorities, unless the client relieves the bank of its duty.

Central Bank to limit payments to only the kyat Myanmar Times 10th Jun 2015
The Central Bank of Myanmar is moving to strengthen the kyat’s use in the local economy, eventually pushing the country’s hotels, restaurants and shops to list prices only in the local currency. It has issued a letter directed at government ministries and regional governments, stating they must use only local currency for charges as well as for price quotations when selling products or services. It also applies to private enterprise under the various national and regional government branches, said a Central Bank of Myanmar official. The letter is directed at internal payments rather than foreign purchases, and is to be followed up by more formal rules. Yet experts say it may be a tall order to force transactions into the local currency.

Philippines: Appeals Court backs ruling to stop capital increases for insurers Asia Insurance Review 10th Jun 2015
The Philippine Court of Appeals has upheld the decision of a lower court to stop the government from implementing an order that requires insurance companies to increase their paid-up capital to PHP1 billion (US$22.2 million) by 2020. In a 10-page decision, the Appeals Court said that there is a need to examine the far-reaching implications of the proposed increase in the paid-up capital, especially in relation to the insurance firms’ capability to raise the amount, reported the Inquirer. The order for the capital increase was issued by the Department of Finance (DOF) and the Insurance Commission (IC) through a Department Order in 2012.

JPSK bill pushed amid potential legal issues The Jakarta Post 9th Jun 2015
Deposit Insurance Corporation (LPS) acting executive director Fauzi Ichsan says ongoing efforts to avoid legal conflicts in the long-awaited financial system safety net (JPSK) bill may be pursued, prolonging the bill’s deliberation process. "We just want to make sure that the content of the JPSK bill will not contradict existing laws such as the Financial Services Authority [OJK] Law and the Bank Indonesia Law. That's what has led to such a prolonged deliberation process," he told The Jakarta Post on the sidelines of a JPSK seminar on Tuesday.

Central Bank: Hotels, Tickets, Salaries Must Be Paid in Rupiah The Jakarta Post 9th Jun 2015
Indonesia’s central bank confirmed on Tuesday that a rule taking effect on July 1 means that hotel rooms, airline tickets, property leases and most salaries must be paid in rupiah, as part of a campaign to help prop up the weakening currency. The rule banning use of US dollars for many domestic transactions was announced in April. On Tuesday, Bank Indonesia provided more details on the regulation aimed at controlling onshore demand for dollars, thus easing pressure on the currency. “This is about our sovereignty,” said Lambok Siahaan, special staff to the central bank’s board of governors. “Excessive forex demand has an effect on our exchange rate and inflation.”

Vietnam seeking more stock ownership for foreigners Thanh Nien News 9th Jun 2015
Vietnam is seeking to give bigger ownership to foreign stock investors in line with its international trade commitments, the country's finance minister said on Tuesday. The Finance Ministry has submitted to the government amendments to a decree on foreign ownership in Vietnamese listed firms, with changes "in line with World Trade Organization commitment", minister Dinh Tien Dung told a business forum in Hanoi. He did not elaborate. WTO commitments mean no limits for foreign ownership in Vietnamese firms, except for sectors under specific laws and sectors related to national security, according to the State Securities Commission, the stock market watchdog.