| Market Development
Singapore: NTU partners re/insurers to launch cyber risk management initiative Asia Insurance Review 17th May 2016
Singapore's Nanyang Technological University (NTU), together with the MAS, Cyber Security Agency of Singapore (CSA) and five industry players launched the Cyber Risk Management (CyRiM) Project on the sidelines of the Asia Cyber Risk Summit yesterday. The three-year pioneering project aims to help the public, private and household sectors defend themselves against increasingly sophisticated cyber attacks. With a strong focus on building local data analytics and underwriting expertise, CyRiM will facilitate new areas of research in cyber risk, security and insurance at NTU’s Nanyang Business School (NBS) and will also recommend policies to the Singapore government on advanced cyber risk protection and prevention.
System under control but not risk free, reports financial stability committee The Jakarta Post 16th May 2016
Three months into 2016, Indonesia's financial system is stable and under control, albeit not without risks that must be monitored, the Financial System Stability Committee ( KSSK ) has stated. Based on recent assessment, Indonesia's financial system is in good condition from fiscal, monetary, financial supervision and deposit insurance perspectives, said finance minister and KSSK head Bambang Brodjonegoro. "Despite the relatively good position, we still need to be aware of emerging risks, both external and domestic," he said in a press conference after the first KSSK meeting on Friday in Jakarta.
Malaysian Curren$eek Smartphone App Wins Visa/AIBIM Asean Fintech Challenge CrowdFund Insider 12th May 2016
Curren$eek, a smartphone app that tells users where to find the best money-changer rates, won the Visa and Association of Islamic Banking Institutions Malaysia (AIBIM)’s Asean Fintech Challenge. With this app, users may find out the rates of the money-changers by location, allowing them to make comparisons. The platform currently touts 26 active partners, 27 bank branches, 155 money changes and 10 currencies covered. In the future, Hakim said there are plans to enable money-changers to bid for the business of users who request to change a particular currency and that they were also working with banks to allow direct payment to the money-changer from the user’s account, to eliminate the need for the user to carry cash around.
Indonesia-China Extend Currency Swap Deal Tempo.co 10th May 2016
The Indonesian government and the People's Bank of China agreed to extend the validity period of their bilateral currency swap agreement, which ends in October. Coordinating Minister for Economic Affairs Darmin Nasution said the extension includes an increase in value. "From 100 billion yuans to 130 billion yuans (approximately US$265.7 billion)," Nasution said in the 2nd Meeting of the High Level Economic Dialogue between Indonesia and China in Jakarta, Monday, May 9. With the agreement, trade between Indonesia and China will be denominated in the yuan and the rupiah, without having to exchange currencies to US dollars. This way, the stability and values of the two countries' currencies is more controlled.
Malaysia emerges as global leader in Islamic banking and finance The Edge Markets 10th May 2016
Malaysia has for the first time emerged as the global leader in Islamic banking and finance (IBF), according to the Global Islamic Finance Report 2016 (GIFR 2016), after overtaking Iran in terms of the Islamic Finance Country Index (IFCI). In 2016, Malaysia reported IFCI of 77.77, up from 73.09 in 2015; while Iran saw a lower IFCI of 77.39, from 77.93 in the previous year. The IFCI is a composite index used for ranking different countries with respect to the state of IBF and their leadership role in the industry on a national level, and benchmarked on an international level. The index takes into account the number of Islamic banks and Islamic non-banking institutions, the presence of a central body to oversee the compliancy process, the total Islamic financial assets under management and the total outstanding sukuk, among other factors.
Sukuk unattractive because of higher cost of funds: Official The Jakarta Post 10th May 2016
Compared with government Islamic sukuk securities, which are currently being developed intensively, corporate sukuk are lagging behind, as the cost of funds entailed is much higher than for conventional bonds, according to a Finance Ministry official. Sukuk issuance is more complicated and requires more documents as there is a particular process to go through, namely transfer of assets. This leads to additional cost, said Finance Ministry sharia financing director Suminto.
Tetangco calls for regional unity as ASEAN markets integrate Manila Bulletin 10th May 2016
Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said ASEAN neighbors should look out for each other even if the focus is on keeping “its own house in order.” Tetangco, who was in Germany for the Joint Meeting of the ASEAN+3 (Japan, China and Korea) and Eurosystem Central Bank Governors to discuss central banking and financial stability, said it is important to practice “enlightened self-interest” which were first brought to the fore by the Bank for International Settlements.
Banks, fintechs tie up to plug SME funding gaps Asia One 9th May 2016
Collaborations between banks and fintechs (financial technology firms) - even as they explore leading- edge technology - could also play a big part in addressing the traditional gap in small company funding here. This comes as two local banks, DBS Bank and United Overseas Bank (UOB), extend their reach to smaller companies through tie-ups with fintechs, pushing ahead of their peers in using new technology to target the small and medium-sized enterprise (SME) segment.
Banks enter fintech start-up sphere Bangkok Post 6th May 2016
The greater presence of local commercial banks in corporate venture capital (CVC) is making financial technology (fintech) start-ups red-hot investments. Bangkok Bank (BBL) is the latest to enter the fintech fray to keep pace with the latest developments in the sector. Siam Commercial Bank (SCB) and Kasikornbank (KBank) have already launched their own CVC firms to invest in tech start-ups. Fintech start-ups create innovative products and services that compete with the traditional financial services industry. Virasak Sutanthavibul, BBL's senior executive vice-president for commercial banking, said the company's board approved an initial investment budget of 2 billion baht for its CVC. The budget is slated for tech start-ups, he said at Startup Thailand 2016 last week. BBL is considering whether to set up a new CVC business unit. Arthid Nanthawithaya, chief executive of SCB, said the bank had set aside US$50 million to invest in tech start-ups locally and overseas. Last month SCB formed wholly owned subsidiary Digital Venture Co to manage and operate its venture capital.
Myanmar’s Kanbawza Bank opens first representative office in Thailand Deal Street Asia 6th May 2016
Kanbawza Bank Limited (KBZ Bank), part of KBZ Group of companies has received a license to open a representative office in Thailand. It will become the first bank from Myanmar to open a rep office in a foreign country. “As the largest bank in Myanmar, we are able to use our extensive knowledge of the country’s financial markets to encourage and promote trade, as well as provide advisory services to Thai businesses looking to enter Myanmar,” said U Than Cho, senior managing director of KBZ bank.
PayPal brings its fintech incubation program to Singapore Tech in Asia 5th May 2016
PayPal is getting in the startup incubation game in Singapore, rather unsurprisingly in the fintech space. The nine-month-long incubation program is called Start Tank and will be housed in PayPal’s Technology Center at Singapore’s Suntec City office tower complex. The company today put out a call for interested startups to apply. The submission deadline is May 25 and shortlisted startups will be notified by May 27. They will get the chance to pitch at an event on June 2, with the winners entering the program a few days later on June 6.
Bank Indonesia Creates New Unit to Help Deepen Financial Markets Bloomberg 3rd May 2016
Indonesia’s central bank created a new department to help develop financial markets in an effort to make the economy more resilient to sudden capital outflows, an official said. Nanang Hendarsah, who was head assistant in the office of Governor Agus Martowardojo, will lead the unit as executive director, he said by mobile-phone text message on Tuesday.
OJK to Finalize a Regulation that Governs Municipal Bonds Issuance Hukum 3rd May 2016
The Financial Services Authority (OJK) is currently finalizing a regulation on issuance of “municipal bonds” – a financial instrument that allows regional governments to finance infrastructure projects in their region. “The regulation is currently being finalized by the OJK,” asserted by Firdaus Djaelani, OJK’s Chief Executive of Non-Bank Financial Industry Supervision (IKNB), on Monday, May 2nd 2016 (Jakarta). According to Mr. Djaelani, several regional governments that have ample of regional revenue (pendapatan asli daerah - PAD) will be considered to issue municipal bonds. He pointed out the West Java regional government as an example, which had already expressed will on financing their new Majalenka airport construction by issuing municipal bonds.
Brunei to Get Its First China Bank The Diplomat 2nd May 2016
On April 20, the Bank of China Hong Kong Limited (BOCHK) was granted regulatory approval by Brunei’s Monetary Authority to open a branch in the sultanate, making it the first Chinese financial institution to do so. While China’s penetration into Brunei’s economy is not new, the move will be read as a sign of Beijing’s growing presence in the country. According to Gao Yan, China’s vice minister of commerce, BOCHK is the first Chinese financial institution to establish a presence in the tiny sultanate of over 4 million. The branch opening is said to mark a “new phase” of bilateral financial cooperation between Brunei and China.
Press Release: OJK and OECD/INFE Commit to Enpowering MSMEs Through Financial Literacy and Inclusion Indonesia Financial Services Authority (OJK) 2nd May 2016
Indonesia Financial Services Authority (OJK) and Organization for Economic Cooperation and Development (OECD) will carry out an OJK-OECD/International Network on Financial Education (INFE) High-Level Regional Symposium on Empowering of Micro, Small and Medium Enterprises (MSMEs) through Financial Literacy and Inclusion on 1 - 2 June 2016 in Jakarta (the "Regional Symposium"). This event is in line with the declaration of G20 leaders in Mexico in June 2012 and reinforced by the subsequent declaration in Russia in September 2013 which underlined the importance roles of MSMEs sector in enhancing economic growth, creating job opportunities, and alleviating poverty.
Foreign Fund Flows Slow Amid Malaysia's Eight-Year Rally Bloomberg Business 26th Apr 2016
The overseas funds that have poured into Malaysia slowed to a near halt last week. After investors loaded up on the equivalent of $1.9 billion in a two-month buying spree, stock inflows petered out, reaching the smallest level this year, according MIDF Investment Bank Bhd. Malaysia is home to the world’s longest bull market and the benchmark has not seen a 20 percent decline since the end of 2008.
Second YSX listing delayed until May Myanmar Times 26th Apr 2016
Myanmar Thilawa SEZ Public (MTSH) will not list its shares on the Yangon Stock Exchange until the second week of May at the earliest, according to bourse officials, having initially targeted mid-March. The firm, which is expected to be the second to move its shares onto Myanmar’s new exchange, has not yet received approval from the YSX to list, said Kensuke Yazu, Myanmar representative for the Japan Exchange Group, which co-owns the stock exchange. First Myanmar Investment became the first firm to list on the exchange on March 25.
PSE: SEC should enter into deals with Asean peers on stock trading Business Mirror 25th Apr 2016
THE Philippine Stock Exchange Inc. (PSE) said the government should enter into mutual recognition agreements with its regional peers in Southeast Asia, mainly on buying and selling stocks. PSE President and CEO Hans Sicat told reporters it is “high time” that the Securities and Exchange Commission (SEC) allow foreign shares to be traded and sold domestically, without having to go through the tedious process of registering their stocks locally. Sicat said top Asean countries Thailand, Singapore and Malaysia have already forged a mutual recognition agreement and could trade shares with one another. “In other words, these countries are now doing mutual recognition, similar to a bilateral or multilateral agreement. These countries have relied on their respective regulator’s counterparts,” he said.
Indonesia's Bid to Put a Floor Under Its Bond Market Looks Shaky The Jakarta Globe 22nd Apr 2016
Indonesia's plan to stabilize its often-volatile bond market faces derailment as the country's pension funds struggle to comply with a directive to jack up their bond purchases. In January, Indonesia's Financial Service Authority (OJK) instructed all domestic pension funds to invest at least 30 percent of their money in the government bond market within two years. The directive was welcomed by investors. It would mean the $121 billion market would be part-owned by long-term investors, like in most major debt markets. Their presence would reduce volatile swings in a market dominated by foreigners, who on April 20 owned 44 percent of bonds other than sukuks, up from 38 percent a year earlier.
Singapore Overtakes Hong Kong as Asia’s Top Financial Hub ASEAN Briefing 22nd Apr 2016
Singapore has overtaken Hong Kong as the top financial hub in Asia, according to Z/Yen Group’s Global Financial Centers Index (GFCI). Hong Kong slipped to fourth place overall, while Singapore now only trails London and New York globally. Although the two financial centers are essentially neck and neck – Singapore scoring 755 points out of 1000 and Hong Kong 752 – the shift is indicative of a wider trend of optimism towards Singapore and uncertainty facing Hong Kong.
32,000 bought Singapore Savings Bonds during first 6 months of issue: MAS Channel NewsAsia 20th Apr 2016
About 32,000 individuals bought S$810 million worth of Singapore Savings Bonds during the first six months of their issue, said the Monetary Authority of Singapore (MAS) on Wednesday (Apr 20). The Singapore Savings Bonds were first announced in July 2015, with the aim of providing individual investors with a long-term savings option that offers safe returns. They are fully backed by the Government and can be redeemed early on a monthly basis without penalty.
Indonesia starts on long road to fix its dysfunctional money markets The Star 19th Apr 2016
Indonesia's central bank has taken a first step to fix the country's dysfunctional and often volatile short-term money markets - but the journey will be long. Frustrated by futile attempts to push down the high cost of funds, Bank Indonesia (BI) is shifting in August to a seven-day operating rate as its policy rate, abandoning the current 12-month reference one. The present policy rate is 6.75 percent. At the last auction for one-week reverse repo contracts, BI offered 5.50 percent. Bankers say the benchmark switch will help BI influence rates, which its recent easing moves - including cutting the policy rate by 75 basis points this year - have failed to do.
BI to scrap BI rate for repo rate in August The Jakarta Post 15th Apr 2016
Bank Indonesia (BI) has announced that it will use the BI seven-day repo rate as the new benchmark interest rate as from Aug. 19, abandoning the BI rate, which, the bank says, has lost its relevance to the interbank market rate. The global interbank market rate is currently 4.8 percent after prolonged quantitative easing in the US. This situation led to capital inflows to the Indonesian money market and created a sudden decrease in the interbank rate. “Under the circumstances, the BI rate could not immediately be decrease like the interbank rate as inflation was high. Now, inflation is better controlled and the fuel subsidy is not as big as before,” said BI deputy governor Mirza Adityaswara in Jakarta.on Friday
Asset Management
MoF has agreed to implement PAC's recommendations on 1MDB The New Straits Times 17th May 2016
Ministry of Finance Incorporated (MoF Inc) as the full shareholder of 1Malaysia Development Bhd (1MDB) has agreed to fully implement the Public Accounts Committee’s (PAC) recommendations on the company. In a written reply today, Finance Minister Datuk Seri Najib Razak, responding to a question by Bagan Member of Parliament Lim Guan Eng, said the ministry had released a statement on its official website regarding the matter on May 4.
1MDB says engaging bondholders affected by default The Malaymail 9th May 2016
Sovereign fund 1Malaysia Development Bhd (1MDB) announced today that it has started the engagement process with bondholders affected by the default on its US$1.75 billion 1MDB Energy (Langat) Ltd notes, also called “Langat Notes”.
Singapore adds diamonds to its trading repertoire Nikkei 9th May 2016
A new electronic exchange for trading diamonds opened last week in Singapore, claiming to be the first of its kind to allow physical trading of the gems on an electronic platform. The hope is that the new exchange will be a game-changer that will bring in new traders to the traditionally closed diamond industry, and boost demand for the precious stone which is facing historically low prices amid plunging demand from big spenders such as the Chinese. Backed by Singapore's state investor Temasek Holdings and investor Jim Rogers among others, Singapore Diamond Investment Exchange (SDiX) utilizes an electronic platform designed by engineers who previously created systems for major stock exchanges including the Singapore Exchange.
Spearheading world's first Islamic venture capital fund New Straits Times Online 6th May 2016
Malaysia will take the lead in setting up the world’s first Islamic venture capital fund that will spawn the growth of start-ups, said Treasury Secretary-General Tan Sri Dr Mohd Irwan Serigar Abdullah. Treasury officials and the Malaysia Venture Capital Bhd are now finalising the US$100 million (RM398 million) deal with Islamic Development Bank (IDB) in Jeddah and a memorandum of understanding is expected to be signed during the upcoming IDB’s annual meeting in Jakarta later this month. Although there is a slow growth in start-up in Islamic countries outside Malaysia and Indonesia, he was confident of a shift in the mindset as seen in growing interest in Egypt and the United Arab Emirates. “We are also looking at partnering with Indonesia and Dubai. Partnering with the Middle East countries is a good move as we are developing our own syariah-compliant fund so we will invest in syariah-compliant companies.”
Malaysia gets shot in the arm from foreign investments The Star 26th Apr 2016
The resurgence in asset purchases has driven up Malaysia’s external reserves and supported the FTSE Bursa Malaysia KL Composite Index’s (FBM KLCI) rally over the past two months, although the value of inflows is starting to recede, according to analysts. An upturn in sentiment globally has prompted investors to snap up Malaysian assets in search of bargains. This was reflected not only in the FBM KLCI’s rise recently, but also in the currency and fixed-income markets.
Malaysia Pays Bigger Premium in Debt Sale as 1MDB Delays Payment Bloomberg Business 26th Apr 2016
Malaysia paid a bigger premium to bondholders to own some of its new Islamic debt as a delayed interest payment by its troubled state investment fund weighed on demand. The government priced $1 billion of 10-year notes at a wider spread than an offering a year ago. The sale, which also included $500 million of 30-year notes, drew $6.3 billion of orders, compared with $9 billion for an issuance of the same size in April 2015.
Malaysia's pension fund to double property investments The Straits Times 19th Apr 2016
Malaysia's US$178 billion (S$240 billion) pension fund plans to double its real estate assets in the next few years as it seeks to diversify its holdings that are mostly invested in bonds and stocks. The Employees Provident Fund (EPF), whose property investments include 11-12 St James Square and the Battersea Power Station project in London, is now looking at buying more assets in continental Europe, chief executive officer Shahril Ridza Ridzuan said on Tuesday. EPF manages the retirement savings of more than 13 million people.
SGX focuses on derivatives in fight to survive Nikkei 15th Apr 2016
Amid consolidation among major global bourses, Singapore Exchange has decided to pursue an altogether different strategy from many of its peers. It focuses on offering new derivatives products in the hope of tapping potential investor demand. In February, SGX CEO Loh Boon Chye entered the race to acquire London-based shipping information provider Baltic Exchange, at a time when Deutsche Boerse and the London Stock Exchange Group were working towards a large merger deal.
Banking
Swiss bank probing staff over 1MDB-related dealings Free Malaysia Today 17th May 2016
The Swiss bank BSI SA is investigating employees and their dealings related to 1MDB, Bloomberg reports. Quoting “people familiar with the matter”, the report said one of the employees being investigated in Singapore was Kevin Swampillai, the manager of Yeo Jiawei who is the first banker to be charged by the Singapore authorities over financial dealings related to 1MDB.Although Swampillai, the managing director of wealth management services, has been suspended pending investigation, he hasn’t been accused of any wrongdoing by Singapore authorities. BSI’s ongoing inquiry comes as authorities across the globe examine claims that 1MDB was used to funnel money to politically-connected individuals.
ABS toughens due diligence guidelines for future SGX listings Singapore Business Review 13th May 2016
The Association of Banks in Singapore (ABS) has enhanced the standard of its guidelines for due diligence activities its member banks carry out on all companies wanting to list on Singapore Exchange (SGX). It aims to improve the quality of issuances. Some of the major enhancements to the guidelines include better quality of the board and key management, the type of corporate structure, the business model, the financial position and liquidity of the company.
Banks must break tradition for development: experts Viet Nam News 12th May 2016
Accelerating the use of internet and mobile technology will be essential for Việt Nam’s banking system as the country looks to reach international standards, experts said during the Asian Banker Summit 2016 in Hà Nội yesterday. Addressing the event, Prime Minister Nguyễn Xuân Phúc said Việt Nam will speed up the reorganisation of credit institutions and enhance the efficiency of banking operations for a more stable and competitive economy. State Bank of Việt Nam Governor Lê Minh Hưng said the country’s integration into the global economy, especially since becoming a member of the ASEAN Economic Community and signing the Trans-Pacific Partnership trade deal, means local banking institutions and administrators have to improve their capacity.
National Bank to Receive Support from IFC The Khmer Times 11th May 2016
The International Finance Corporation (IFC) signed a Memorandum of Understanding with the National Bank of Cambodia (NBC) yesterday in a move that officials are predicting will usher in a new era of responsible corporate governing practices, transparency, financial risk management and public confidence in the Kingdom. According to an IFC press release, the World Bank Group member will assist the NBC in enhancing its regulatory, supervisory and administrative capabilities by developing and providing corporate governance training and workshops to the bank’s staff.
HSBC completes transfer of business units to Singapore subsidiary Channel News Asia 9th May 2016
The Hongkong and Shanghai Banking Corp (HSBC) has completed the transfer of its retail banking and wealth management business in Singapore to a locally incorporated subsidiary, the bank announced on Monday (May 9). The subsidiary, HSBC Bank (Singapore), "holds a full bank license in Singapore with Qualifying Full Bank privileges under Chapter 19 of the Banking Act of Singapore", the bank said. The move follows an announcement by the Monetary Authority of Singapore in April 2015 that HSBC is considered one of seven domestic systemically important banks in Singapore.
Moody's: Malaysia's Islamic banks show greater growth stability and better asset quality versus Indonesian peers in the current downcycle Moody's 9th May 2016
Moody's Investors Service says that Islamic banks in Malaysia show greater growth stability and better asset quality when compared to their Indonesian counterparts, despite the similar macroeconomic headwinds faced by both systems. "The divergence between the two systems is notable, considering the fact that the two economies have exhibited similar economic and credit growth trends, and banks in Malaysia and Indonesia show far less difference in the performance of their conventional loans," says Simon Chen, a Moody's Vice President and Senior Analyst. "The outperformance of Malaysian Islamic banks as against their Indonesian counterparts in terms of asset growth reflects to a large part the Malaysian banks' more established franchises, deeper market penetration, and long-standing regulatory support," adds Chen.
DBS, OCBC, UOB in talks to fight money laundering The Straits Times 7th May 2016
The biggest banks here are in talks about setting up a system for sharing information on prospective clients in an effort to combat money laundering. DBS Group, OCBC and UOB are exploring the possibility of a country-wide model for anti-money laundering and enhanced client knowledge, according to Ms Loretta Yuen, the head of legal and regulatory compliance at OCBC. The bank believes the new model "will bring significant control and operational efficiency benefits to the industry and Singapore", Ms Yuen said by e-mail, adding that it's premature to discuss details of the initiative.
Singapore banks become a hotbed for ‘fintech’ Financial Times 6th May 2016
Banks have long used data analysis to predict market movements, investment returns, even risks of customer fraud. But Singapore’s DBS Bank is one of those applying predictive analytics to internal functions — using pattern-detecting software to spot rogue traders, and other unusual staff behaviour. Newly deployed, the programme is already starting to bear fruit, DBS says, allowing the bank to take action before losses escalate. And while other banks are turning to outside technology firms for such sleuthing software, DBS has developed its version in-house — through an unusual government-backed research partnership. It is one of many turning to “fintech” to cut costs and manage risks, as financial institutions around the world face up to depressed revenues and higher regulatory compliance costs. Fintech investment has risen in the Asia-Pacific region from $103m in 2010 to $4.3bn in 2015. Investment there now accounts for 19.3 per cent of the total worldwide, according to consultancy Accenture. Singapore, where the government and the financial regulator are taking concrete steps to support innovation, has become a test bed for the use of new technology in Asia.
SCB plans major revamp of branches to boost SME lending The Nation 6th May 2016
Siam Commercial Bank is transforming its 1,200 branches nationwide into SME branches in an attempt to drive small and medium enterprise credit to one-third of its loan portfolio by 2020 from 20 per cent currently. "This adjustment is a strategy of the bank in preparing to cope with digital banking and e-payment, whose role is increasing in financial services," Vipon Vorasowharid, the first executive vice president in charge of business banking, said yesterday.
Banks warned on growing threat of cyber fraud The Phnom Penh Post 5th May 2016
Local financial institutions need to ensure that adequate safeguards are in place to stop cyber criminals and protect their customers’ deposits from increasingly sophisticated fraud scenarios, a banking expert told a forum in Phnom Penh yesterday. Leonie Lethbridge, the newly appointed CEO of ANZ Royal Bank, told members of business chambers and the local banking community attending the forum that there has been a global upsurge in cyber and financial fraud, and Cambodia must take measures to ensure that it “does not become the next destination”.
BPI to adopt financial technologies amid cyber threats BusinessMirror 5th May 2016
The oldest bank in the Philippines is ready to embrace technological advancements that financial technologies (fintech) have to offer, amid the cyber-threat issues that plagued the country since the start of the year. Ramon L. Jocson, executive vice president of the Bank of the Philippine Islands (BPI), told the BusinessMirror they plan to incorporate fintech in their banking ecosystem, alongside the digitization of selected parts of their business. “Fintech in the financial industry is about the concept that people need convenient banking services but they don’t necessarily need the banks. What they need are efficient banking services,” he said.
Singaporean banks grapple with higher non-performing foreign loans Singapore Business Review 5th May 2016
All of Singapore's three largest banks were hit with higher non-performing loans from foreign borrowers in the first quarter of the year. This chart from Moody's shows that asset quality at DBS, OCBC and UOB deteriorated further in Q1, driven by an increase in non-performing foreign loans and shaky oil and gas loans. "The three banks reported higher non-performing foreign loans in the first quarter of 2016, with DBS and OCBC leading the increase," Moody's said.
Local banks told to embrace challenges posed by fintech firms The Edge Markets 4th May 2016
Malaysia’s banking industry has been urged to embrace challenges put forward by financial technology (fintech) companies to stay relevant in the evolving world economy. “With fintech, people don’t go to banks anymore and banks have taken on intermediation roles ... [hence] banks have to work together with fintech [companies] to see what they can contribute to the financial market,” said Global Islamic Finance Forum 2016 (GIFF 5.0) organising chairman Nazlee Khalifah yesterday. “The banking industry is a very highly regulated industry. They have to embrace technology to ensure banking is easier for customers. Ultimately, what customers want is fast, efficient and reliable [service],” he told reporters after launching the GIFF 5.0 here. The GIFF 5.0 is organised by the AIBIM, supported by Bank Negara Malaysia and the Securities Commission Malaysia.
Vietnam banks heed PM call, cut lending rates for businesses Thanh Nien News 2nd May 2016
Many banks have cut interest rates by 0.5-1 percentage points on loans for businesses following a call by Prime Minister Nguyen Xuan Phuc. Vietcombank, one of the country's largest lenders, Friday reduced the maximum interest rate on medium- and long-term loans from 11 percent to 10 percent a year. The bank plans to lend businesses around VND300 billion (US$13.32 million) at low rates.
Banks’ equity up, assets down Viet Nam News 2nd May 2016
The combined equity of all lenders in the domestic banking system reached nearly VNĐ580.3 trillion (US$25.8 billion) ending January, an increase of VNĐ2.3 trillion over the end of 2015. Thời báo Ngân hàng (The Banking Times) reported the figures, citing the latest data of the State Bank of Việt Nam (SBV).
Moody's warns of corporate foreign debt in Indonesia The Jakarta Post 28th Apr 2016
Rating agency Moody's has given a warning about Indonesian corporate debt, which relies heavily on foreign sources, while choosing not to downgrade the sovereign rating of the country. Moody's kept the sovereign rating at Baa3 with a stable outlook as government and corporate debts were at 26.8 and 23.7 percent of gross domestic product ( GDP ), respectively. The level of government debt is moderate, as the average debt of other countries with the same rating is around 42 percent. "However, almost half of the debt is denominated in foreign currencies, and overseas investors hold more than 38 percent of local government bonds," managing director Atsi Seth said in Jakarta on Wednesday.
Muhammad Ibrahim is new Bank Negara governor The Star 27th Apr 2016
Deputy governor of Bank Negara Malaysia, Datuk Muhammad Ibrahim has been appointed as the new governor for five years, effective from May 1, the Prime Minister's Office said on Wednesday.
New bank accredited for Agri-Agra act compliance Business World Online 25th Apr 2016
The Bangko Sentral ng Pilipinas (BSP) has named 10 rural banks which bigger entities can tap to fulfill their mandate of handing out loans to the farming sector. The central bank under Circular Letter 2016-034 identified accredited rural financial institutions (ARFIs) which bigger banks can use to comply with Republic Act (RA) 10000 or the Agri-Agra Reform Credit Act of 2009. Signed on Feb. 23, 2010, the law requires banks to set aside 25% of its total loanable funds as credit quota for the agriculture and fisheries sector. Broken down, banks must allot 10% of their loanable funds to agrarian reform beneficiaries and a separate 15% to farmers and fisherfolk. Direct compliance can be made through the actual extension of loans to qualified borrowers and the purchase of eligible loans from duly accredited financial institutions as named by the BSP.
Banks told to tighten guard in wake of Comelec data breach Business World Online 22nd Apr 2016
Banks must take extra care in profiling customers, the Bangko Sentral ng Pilipinas (BSP) said on Friday, in the wake of the massive leak of voter data kept by the Commission on Elections (Comelec). Through Memorandum 2016-005, the BSP pressed all banks and other supervised financial entities to “exercise extra vigilance” following the reported leakage of sensitive voter information after the poll body’s Web site was hacked last month. To guard against the possible misuse of stolen voter data, banks and similar entities should require additional information from clients -- apart from those available with the Comelec -- in order to verify their identity. “Customer identification procedures of BSFIs (BSP-Supervised Financial Institutions) that rely on static information which may be obtained from the disclosed Comelec records should be supplemented by requests for additional proof or secondary information to establish the true identity of new and existing clients,” read the order that was signed by BSP Deputy Governor Nestor A. Espenilla, Jr. on Friday.
Banks extend a helping hand to SMEs facing difficulties collecting payments Channel NewsAsia 21st Apr 2016
Small- and medium-sized enterprises (SMEs) are facing increasing difficulties in collecting payments, amid a slowdown in economic growth. However, unlike in previous downturns, some banks appear willing to extend loans to SMEs. Companies in the construction sector, for example, are finding it more difficult to collect money from customers, with payment delays jumping by one-third in the first three months of the year compared to the previous quarter.
Indonesia's Warped Debt Mirror Bloomberg Gadfly 19th Apr 2016
Indonesia's high-yield bond market tells the story. Of the 75 corporate notes rated sub-investment grade by Standard & Poor's, Moody's and Fitch, 45 are actually relatively safe investments, with a probability of welshing on their agreement to creditors over the next one year of less than 0.52 percent, according to a proprietary Bloomberg metric of default risk. The average one-year default probability of junk-rated companies, including state-controlled gold miner Aneka Tambang, taxi operator Express Transindo and noodle maker Indofood, is 0.87 percent, lower than in China, India and Brazil, the data show.
Indonesian banks mull over tough Q1 GTR 19th Apr 2016
Indonesian banks are experiencing the pinch, with the ongoing downturn in China resulting in a tough first quarter for the sector. Indonesia relies on commodity exports for around 60% of its total overseas sales, many of which go to China. With the deflated Chinese property market and efforts to steer the domestic economy away from large scale investment, Indonesia has been affected more than most. “All banks have had a tough first quarter,” Michael Sugirin, Standard Chartered’s head of transaction banking in the country told delegates at the GTR Indonesia Trade and Commodity Finance Conference in Jakarta today, with deal volumes reported to be down across the board.
PLDT ICT unit: Banks must step up measures vs cyber crimes Rappler 18th Apr 2016
The information and communications technology (ICT) arm of the Philippine Long Distance Telephone Company (PLDT) – soon to be called PLDT, Incorporated – urged local banks to improve security measures, as the country's vulnerability to cyber crimes statistically doubled in the past years. Rene Huergas, president of IP Converge Data Services Incorporated (IPC), said all banks should check on their current data security setup, as even the most secure institutions are not safe from the alarming increase in crimes perpetrated online, particularly Distributed Denial-of-Service (DDOS) attacks.
E-Payments
First ever FinTech Bridge established between Britain and Singapore Monetary Authority of Singapore 11 May 2016
Singaporean officials and FinTech companies gathered with UK FinTech companies in Downing Street today to celebrate the launch of the UK’s first ever FinTech Bridge, which included the signing of a Regulatory Cooperation Agreement between the Financial Conduct Authority (FCA) and the Monetary Authority of Singapore (MAS). The agreement will enable the regulators to refer FinTech firms to their counterparts across the globe. It also sets out how the regulators plan to share and use information on financial services innovation in their respective markets.
Banks move forward on cashless payment system The Nation 9th May 2016
Cashless payments in Thailand are expected to rise to between 50 and 60 per cent of the total within five years from the current 30 per cent after banks invest in electronic data capture (EDC) and finalise a new structure for transactional fees. Yos Kimsawatde, head of the Thai Bankers' Association's Payment System Office, said members of the TBA had agreed on the new fee structure, under which charges for digital banking will be significantly lower than in the past. Fund transfers via mobile banking currently cost Bt10 per transaction, for example, but the charge will be lower under the new structure, he said.
Bank Negara records higher use of electronic fund transfers and a decline in cheque usage The Star 4th May 2016
More people are turning to electronic funds transfer services to perform financial transactions. Bank Negara Malaysia (BNM) Payment System Policy Department Director Tan Nyat Chuan said the use of Interbank Giro (IGB) has almost doubled from 19% to 34% while the use of the Instant Interbank Funds Transfer (IBFT) facility has also grown over 60% since 2011. “It is an unprecedented decline in cheque usage. The usage of cheques have declined by about eight fold from 1.6% to about an average of 13% between 2011 and last year,” said Tan during the National E-payment Roadshow 2016 in Ipoh last week. Last year marks the first time in which the number of IBG transactions surpassed the volume of cheques cleared,” he added.
Mobile payment vendors tout security to push wider use Channel News Asia 4th May 2016
Concerns about security may discourage some consumers from adopting mobile payments, but providers such as Visa, Apple and Samsung are aiming to deal with such worries by baking in security protection, regardless of the device one uses. Mr Jarkko Sevanto, head of mobile solutions for Asia-Pacific at Visa, told Channel NewsAsia in an interview that the company's Token Service has features such as access and identity management which add extra layers of security to mobile operating systems. “We have already assumed the worst to happen,” Mr Sevanto said, “So we’re not just protecting the integrity of the device, but the fallout measures should the device get stolen or lost.” Beyond security, Mr Dill highlighted Singapore as an ideal place for mobile payment innovations to take place because its infrastructure is developed and the feedback loop for such ideas should be fast, which helps in the development process.
Thai fintech firm T2P secures $1.1m from 500 Startups, Benchachinda Deal Street Asia 2nd May 2016
Bangkok-based fintech firm T2P has raised $1.1 million from global venture capital 500 Startups, its Thai micro-fund 500 TukTuks and Benchachinda Holding, owned by the founding family of mobile operator DTAC. Natwut Amornvivat, the co-founder of T2P Co, said that it would use the proceeds to expand its e-payment platform service from business-to-business (B2B) to the consumer market. It also plans to expand its service outside Thailand by the end of this year, starting from ASEAN countries. Only 7.6 per cent of Thai people use e-wallet service, which is pretty low compared to the average 19.5 per cent in Asia Pacific, he said. “Currently, around 53 per cent of Thai population use smart phone and 30 per cent of total do not have bank accounts. Thai market, therefore, has big room for us to grow,” he added.
MEPS Plans To Introduce 'Pool ATM' Next Year Bernama 29th Apr 2016
Malaysian Electronic Payment System Sdn Bhd (MEPS) plans to introduce 'pool automated teller machine (ATM)' services which is expected to offer cost efficiency for banks and their clients next year. Managing Director Zulkarnain Kassim said currently, the interbank network provider was in discussion with several banks which had shown keen interest in providing the service. "What we have in mind is to provide free-of-charge interbank services, which means customers will no longer have to pay services charge if their banks subscribe to the scheme," he told Bernama on the sidelines of the 2016 Southeast Asia ATM Conference here recently.
More than 1 in 3 Singaporeans use mobile wallets in face-to-face transactions: Visa Singapore Business Review 28th Apr 2016
Singapore is currently one of the leading markets in the world for contactless payments, as more than 4 million Visa payWave transactions made in a month, according to data from Visa. Visa reports that more than 1 in 3 Singaporeans use Visa payWave for face-to-face transactions. Further, the penetration is higher in supermarkets, where more than half the cashless transactions for Visa are contactless. Respondents cited faster transactions (71%), ease of use (55%), and no need to have cash on hand (47%) as the main reasons for choosing contactless payment options over cash.
Visa opens innovation centre in Singapore Channel News Asia 28th Apr 2016
Visa opened its Singapore innovation centre - a 7,000-square-foot facility that will allow the firm to work with its clients, partners and developers to come up with payment and commerce solutions - on Thursday (Apr 28). The innovation centre at Robinson Road is the first in a network of new innovation centres the company is opening around the world later this year and in 2017. It builds on the success of Visa's flagship innovation centre which opened in July 2014 in San Francisco. President of Visa, Ryan McInerney said the company aims to make commerce and shopping simple and easy for both consumers and businesses through its drive for innovation. The centre aims to be a collaborative space where various stakeholders can come together to create commerce solutions, particularly on mobile and digital platforms, McInerney said.
Philippines' tax bureau taps mobile payment for tax collection Enterprise Innovation 19th Apr 2016
The Philippines' Bureau of Internal Revenue (BIR) has partnered with Globe Telecom's GCash mobile money service for its tax collection effort. It said the goal is to improve tax collection and administration, curb corruption, and strengthen business climate in the country. "The continuous payment of right taxes will continue and sustain the growth of the Philippines," said BIR Commissioner Kim Henares in a statement. "The bureau aims to increase funding contribution for the country’s growing needs for basic infrastructure and social programs necessary to reduce poverty, thus, the government continues to push for the growth of the country’s fiscal space."
Latest Ministry of Finance Regulation on Credit-Card Data Predicted to Boost State Revenues Hukum 18th Apr 2016
The Minister of Finance recently issued Regulation No. 39/PMK .03/2016 (fifth amendment), which amends Ministerial Regulation No. 16/PMK .03/2013 on Details Relating to Types of Data and Information, as well as Procedures for the Provision of Data and Information for the Purposes of Taxation (2013 Regulation). It is believed that this Fifth Amendment will ultimately have a positive impact as regards efforts being made by the government to increase state revenue derived from the taxation sector. At the very least, the regulation should improve Indonesia’s taxpayer database, and thus help to ensure that the general population satisfies its various tax obligations to the government.
Banks to issue chip cards from May 16 Bangkok Post 18th Apr 2016
Mandatory chip-embedded card issuance for debit and ATM cards will come into effect on May 16 nationwide in a move aimed at enhancing financial security, says a senior Bank of Thailand official.
Insurance
Cyber insurance the next growth frontier for local insurers, says MAS Singapore Business Review 17th May 2016
Domestic penetration could rise to 40% by 2020. Local insurers should look to cyber risk management for growth, as enterprises grapple with increasingly sophisticated attacks. Bernard Wee, Executive Director at Monetary Authority of Singapore, said that despite growing risks, cyber insurance adoption by SMEs remains low at less than 10%.
Singapore: Life insurance shows positive start to 2016 Asia Insurance Review 11th May 2016
The first quarter of the year showed a 5% and 6% increase in weighted annual premiums and weighted single premiums, respectively, for life insurance, reports the Life Insurance Association Singapore (LIA Singapore). Overall, the life insurance industry in Singapore achieved a total of S$682.1 million (US$498.05 million) in weighted new business premiums this quarter, a 5% increase compared to the same period in 2015.
Long term Prospects remain Bright for Thailand’s insurance sector Thailand Business News 10th May 2016
Strong potential for growth in Thailand’s insurance sector stems from low rates of insurance penetration, which is 4.1% for life insurance and 1.7% for non-life insurance, according to the Thai General Insurance Association (TGIA). Increasing demand on the back of an expanding middle class and growing awareness of services will drive growth in Thailand’s insurance sector, though short-term prospects may be muted by a cooling of the economy.
China Re prepares for Singapore launch The Insurance Insider 9th May 2016
China Re is in the final stages of establishing a branch office in Singapore as it continues to internationalise its business, The Insurance Insider has learned. Sources said that the Chinese state-owned reinsurer had hired former Hardy Singapore managing director Richard Lim to spearhead its push into the Red Dot. It is understood that China Re has in-principle approval from the Monetary Authority of Singapore, but is awaiting formal approval to commence operations.
Indonesia: Regulator urges foreign-held insurance ventures to list Asia Insurance Review 9th May 2016
The Financial Services Authority ( OJK ) has called upon insurance joint ventures with significant foreign ownership to go public through an initial public offering (IPO). OJK Commissioner for the Non-banking Financial Industry, Mr Firdaus Djaelani, said that alternatively, such insurers might choose to divest their shares by directly seeking local strategic investors, reported The Jakarta Post.
Malaysia: Rural market to boost takaful business Asia Insurance Review 4th May 2016
Malaysia's Islamic insurance industry is set to double its growth rate this year as takaful operators focus on selling cheaper policies in rural areas, according to the nation's takaful body. The number of policies will rise by 10% to 5.05 million in 2016, compared with 4.3% growth in 2015 and a 1% estimated expansion of non-Islamic business, Mr Ahmad Rizlan Azman, Chairman of the Malaysian Takaful Association, said in an interview with Bloomberg in Kuala Lumpur. Insurers entering the micro-takaful market and the liberalisation of commission structures are the biggest drivers, he said.
Implementation of the AEC and the impact on the insurance industry - are we ready? Lexology 4th May 2016
The much-anticipated goal was to implement the ASEAN Economic Community (AEC) by 31 December 2015, thereby forming a single market and production base across ASEAN member countries (AMC). The insurance industry will have many opportunities and challenges to overcome as the AMC continue their progress to integrate the market across the ASEAN region. However, with a new AEC Blueprint for 2025, economic integration still seems some way off.
IC urged to review tariff to lower insurance rates Business Mirror 3rd May 2016
The country’s nonlife insurers are urging the Insurance Commission (IC) to review tariff rates to check their relevance in the era of free trade and globalization. In a speech during the 13th General Insurance Summit at Dusit Thani Hotel, Michael Rellosa, vice chairman of the Philippine Insurers and Reinsurers Association (Pira), said it may be high time for the IC to look into the tariff rates and why nonlife insurers are having difficulty following them. Rellosa revealed that in 2015, the nonlife insurance industry paid P21 million in fines for tariff breaches. Rellosa said he is not questioning the wisdom of the IC in penalizing insurers, but he urged the regulator to consider the tariff in relation to the Asean economic integration is slowly unfolding. Rellosa, who is the present chairman of the Asean Insurance Council, said the economic integration is the reason the government made insurance companies raise more capital than they could actually use at the moment.
Philippines: New rules out for low-cost pre-need and health plans Asia Insurance Review 2nd May 2016
The Insurance Commission has released the rules governing the sale of cheaper health insurance and pre-need products to better protect consumers. The rules, advised through separate circulars, cover micro pre-need products as well as health microinsurance or micro-health products.
Catastrophe insurance pool proposal in limbo Business Mirror 30th Apr 2016
The fast economic growth in Metro Manila, as may be seen particularly in the large volume of vehicle sales to middle- class families, also has a downside—the vulnerability of the metropolis to a near wipeout caused by natural or man-made disasters. This is the reason the Insurance Commission (IC) and the Philippine Insurers and Reinsurers Association (Pira) are pushing for an executive order (EO), which will make it mandatory for all households and micro-, small- and medium-sized enterprises (MSMEs) to have catastrophe insurance for disasters, such as earthquakes and floods.
Zurich Insurance moves into takaful with Malaysia buy Reuters 27th Apr 2016
Zurich Insurance is set to take full ownership of Malaysia's MAA Takaful after the deal received regulatory approval, giving Europe's fifth-biggest insurer a foothold in the world's second largest Islamic insurance market. MAA Takaful, one of Malaysia's 11 Islamic insurers, is a joint venture launched in 2006 by MAA Group Berhad and Bahrain's Solidarity, which hold 75 percent and 25 percent stakes respectively.
Singapore: NTU-led alliance to plug risk management data gaps Asia Insurance Review 26th Apr 2016
Nanyang Technological University (NTU Singapore) is spearheading an alliance of leading multinational and regional companies in the insurance industry to enable more countries in Asia to better cope with the economic and financial fallout from natural disasters. The alliance will address gaps in data that is required for risk management and quantification in Asia. The Natural Catastrophe Data and Analytics Exchange (NatCatDAX) Alliance, launched at the 7th International Symposium on Catastrophe Risk Management organised by NTU on 21 April, will be an industry-led catastrophe data and analytics platform for Asia. It will generate a rigorous database by tapping into national and industry data. Such high quality data, market analytics and product innovations are currently lacking in the region.
New Provisions on Work-Accident Insurance Health Services and Tariffs Hukum Online 26th Apr 2016
The Minister of Employment (“Minister”) has issued Regulation No. 11 of 2016 on Health Services and Tariffs for the Work-Accident Insurance Program (“Regulation”). The Regulation represents an implementation of Article 25 (7) and Article 47 of Government Regulation No. 44 of 2015 on the Work-Accident and Death-Insurance Benefit Program (“44/2015 Government Regulation”),[1] which sets out a ministerial mandate for the specification of the various types of services that may be provided under the work-accident insurance program, which is in turn under the Social Security Agency for Labor (Badan Penyelenggara Jaminan Sosial – “BPJS”) program.
Cambodia: Insurance take-up in construction still low Asia Insurance Review 26th Apr 2016
Despite strong growth in investment in the construction sector, investors, builders and developers still largely neglect insurance on projects, industry and government officials say. Director and General Manager of Forte Insurance, Mr Youk Chamroeunrith, said: “People still seem to have a limited understanding about construction insurance.”
Microinsurance eyed as a disaster preparedness tool Business World Online 22nd Apr 2016
Davao City -- Cebuana Lhuillier Insurance Solutions, along with the Insurance Commission (IC) are actively campaigning to popularize microinsurance as a tool for disaster and climate change preparedness, with the Philippines ranked among the most disaster-prone countries in the world. “There are four phases of disaster namely preparedness, mitigation, response and recovery. Lhuillier wants to zero in on disaster preparedness through microfinance,” Jonathan D. Batangan, general manager of Cebuana Lhuillier Insurance Solutions, said during a Disaster Resilience Forum held in the city Thursday. The company has been conducting a series of educational roadshows around the country since January this year to promote microinsurance awareness. Mr. Batangan said Filipinos, especially low-income earners, can best prepare themselves for any man-made or natural disaster by investing in microinsurance with lower premiums and guaranteed benefits.
Thai insurers branching out to augment slowing local business Fintech Innovation 21st Apr 2016
The Thai General Insurance Association (TGIA) has high hopes that the country’s insurance market predicting a 4.1% rise for life insurance and 1.7% for non-life insurance despite a slowing economy. The number of insurers could fall if the Office of the Insurance Commission (OIC) follows through with plans to enforce its capital adequacy ratios, currently the fourth highest in ASEAN. An increase in risk-based capital requirements may leave smaller operators vulnerable to acquisitions by larger companies.
Construction Insurance Trails Boom Khmer Times 21st Apr 2016
Despite strong growth in investment in the construction sector, investors, builders and developers still largely neglect insurance on projects, industry and government officials say. Director and general manager of Forte Insurance Youk Chamroeunrith said that with the sector’s rapid growth there were still many risks. “People still seem to have a limited understanding about construction insurance,” he said. “But in other countries, construction insurance is seen as an important way of managing risk.”
Cybercriminals targeting Singapore banks Asia Insurance Review 20th Apr 2016
Banks in Singapore are increasingly being targeted by cybercriminals. While other financial centres - and certainly non-financial corporations - are also at risk, Singapore stands out as a significant number of banking customers read Chinese, and that, according to technology company IBM, has made it more vulnerable to the rising Chinese-language hacks on the dark web, reported the Business Times. A 2015 PwC study showed Singapore banks put tech-related crimes and risks at the top over all other concerns. Asked about the level of preparedness in dealing with risks, respondents' answers out of Singapore led to an overall score of 2.9 out of a possible 5. This is lower than the study's global average of 3.13.
Thai Siam Commercial Bank may sell stake in $3b insurance arm to foreign buyer Deal Street Asia 20th Apr 2016
Siam Commercial Bank Pcl, Thailand’s third-largest lender, is exploring options for its life insurance operations that could involve bringing in a foreign partner, people familiar with the matter said. The Bangkok-based lender has received proposals from investment banks and is considering possibilities including selling a stake in unit SCB Life Assurance Pcl and granting rights to sell insurance products through Siam Commercial’s branch network, according to the people. A deal could give Siam Commercial’s life insurance businesses a valuation of at least $3 billion, the people said, asking not to be identified because the discussions are confidential.
Singapore: Insurance details sought for private-car hires Asia Insurance Review 18th Apr 2016
Taxi groups and passengers are calling for more clarity about how private-hire cars used by taxi app providers GrabCar and Uber are insured. Among them, the National Taxi Association called for standardisation of coverage for the private hire sector, reported The Straits Times. Questions about third-party insurance have piled up following last Tuesday's announcement that the government plans to regulate the private hire sector through the licensing of drivers and registration of vehicles. The announcement did not mention insurance.
Market Regulation
IMF urges Duterte gov’t to repeal bank secrecy law to improve tax collection Inquirer 17th May 2016
Lifting the bank secrecy law is one of the tax measures that should be implemented by the incoming administration if it wanted to improve tax collections and shore up revenues, according to the International Monetary Fund (IMF). “Elimination of banking secrecy is of the utmost importance. Current provisions for taxing interest, in particular, differ widely and randomly, across holders, issuers, maturities, and currencies. These withholding provisions should be unified, particularly in light of the increasing integration of the Philippine financial sector with the rest of Asean,” the IMF said in its tax reform recommendations to the Department of Finance (DOF). In turn, the DOF is working on a comprehensive tax reform package it will again pitch for consideration of the incoming Duterte administration.
Bank Negara Malaysia's Concept Papers on Corporate Governance and Shareholder Suitability Lexology 16th May 2016
Bank Negara Malaysia (BNM) issued two concept papers in March 2016, i.e., the Concept Paper on Corporate Governance (Corporate Governance Paper) and the Concept Paper on Shareholder Suitability on 18 March 2016 (Shareholder Suitability Paper). BNM is currently seeking public feedback for both papers. Whilst many of the suggestions are not new, the effect of the proposals on licensed financial institutions (FI) and their shareholders may be far-reaching.
The IFSB organises a regulators’ forum at GIFF 5.0 CPI Financial 15th May 2016
The Islamic Financial Services Board (IFSB) has successfully organised a Regulators’ Forum themed, “Islamic Finance in 2016 and Beyond: Challenges, Opportunities and Evolving Regulatory Focus” on 10 May 2016 in Kuala Lumpur, Malaysia. This Forum was held in conjunction with the Global Islamic Finance Forum 5.0, organised by the Association of Islamic Banking Institutions Malaysia (AIBIM) on 10 – 12 May 2016 at Sasana Kijang, Bank Negara Malaysia. The half-day Regulators’ Forum, attended by over 100 delegates from across the world, was conducted in an interactive environment which enabled speakers and participants to explore the implications on the Islamic financial services industry (IFSI) from evolving global regulatory reformed agenda while raising awareness on the emerging challenges in the resilience and stability of the IFSI. The IFSB’s Islamic Financial Services Industry Stability Report 2016, the fourth edition in this series, was also launched by HE Dr. Hendar, Deputy Governor of Bank of Indonesia during the Forum.
MAS Issues Proposed Enhancements to Resolution Regime for Financial Institutions in Singapore Lexology 15th May 2016
In June 2015, the Monetary Authority of Singapore ("MAS") issued a consultation paper on the Proposed Enhancements to the Resolution Regime for Financial Institutions in Singapore ("June 2015 Consultation Paper"). On 29 April 2016, the MAS issued its Response to Feedback Received on the June 2015 Consultation Paper ("Response"), and an additional consultation paper on Proposed Legislative Amendments to Enhance the Resolution Regime for Financial Institutions in Singapore ("April 2016 Consultation Paper").
Credit bureau committee awaits CB regs Myanmar Times 13th May 2016
Myanmar's Central Bank is hoping to enact regulation in June that will pave the way for a credit bureau to help the country’s banks better assess risk when making loans and loosen strict collateral requirements. The Myanmar Bank Association (MBA) has already signed an agreement with Singaporean firm NSP Holdings to establish a joint-venture credit bureau, according to U Zaw Lin Aung, secretary of the Credit Bureau committee.
Malaysian central bank investigates fintech regulation Fin Extra 13th May 2016
Fintech could bring great benefits to Islamic finance, according to the governor of Bank Negara Malaysia, but also poses risks which regulators need to guard against. The central bank has begun a review "of the changes and additional guidance needed to ensure that the regulatory framework remains appropriate to manage the risks, while encouraging productive innovation that will drive costs down and improve the quality of service to consumers". The review will look at the impact of fintech on the management of risk by traditional financial institutions, how startups introduce risks to the broader system as a result of regulatory arbitrage, and the impact on consumers.
Malaysia bolsters fintech regulatory framework Nikkei Asian Review 12th May 2016
Malaysia's central bank announced on Wednesday that it has started reviewing the regulatory framework needed to accommodate the growth of companies that use technology to provide financial services and offer an alternative to traditional banking. "Fintech is challenging the status quo of the financial industry," Gov. Mohammad Ibrahim told a gathering of Islamic-finance practitioners in Kuala Lumpur. He said the review will consider the impact of fintech on risk management by financial institutions. It will also look at new risks arising from fintech startups as a result of regulatory arbitrage and the impact on consumers.
Tharman takes over as Singapore finance minister after Heng suffers stroke Reuters 12th May 2016
Singapore Finance Minister Heng Swee Keat suffered a stroke and collapsed during a cabinet meeting on Thursday and Deputy Prime Minister Tharman Shanmugaratnam was named to cover his duties. Heng, 54, who had been tipped as a potential successor to Prime Minister Lee Hsien Loong, was recovering in hospital after surgery, the prime minister's office said. "Deputy Prime Minister Tharman Shanmugaratnam will be covering the duties of the minister for finance with immediate effect," it said in a statement. Tharman, 59, stepped down from his role as finance minister in October after Lee inducted younger people in key ministries as part of preparations for a leadership transition. Tharman was named the coordinating minister for economic and social policies and also continued as the chairman of the Monetary Authority of Singapore, the central bank. "Heng Swee Keat had a sudden stroke due to an aneurysm, which is a localized weakening of a blood vessel. He underwent initial neurosurgery to relieve pressure in his brain due to the bleeding," the statement from the prime minister's office said. It said the aneurysm was successfully closed and Heng will remain under close monitoring in an intensive care unit. Heng, a former managing director of the central bank, collapsed at 5.34 pm on Thursday and was rushed to hospital.
Thailand should ease crowdfunding regulations: Hongsin Kwek, PhoenixICT Deal Street Asia 12th May 2016
As fintech become increasingly important worldwide, the Thai government and the Office of Securities and Exchange Commission (SEC) have expressed their desire to see one of its components – crowdfunding – take roots in Thailand. Hongsin Kwek, the CEO and founder of a well-know crowdfunding hub PhoenixICT is keen to do just that. Kwek, was one of the organisers of Crowdfunding Asia, the first conference of its type focused on the Asian markets since 2014. Currently, she is a consultant for the Thai government to help make crowdfunding feasible in the country.
Bank Negara studying changes needed to adopt fintech New Straits Times 11th May 2016
Bank Negara is reviewing the changes needed for the adoption of financial technology, or fintech, said Bank Negara Governor Datuk Muhammad Ibrahim. The bank wants to ensure that the regulatory framework remains appropriate to manage the risks, while encouraging productive innovation that will drive costs down and improve the quality of service to consumers, " he said. The new central bank chief was presenting his keynote address at the launch of the three-day Global Islamic Finance 5.0.
Last-ditch bid to plug hole in fight against dirty funds Business World Online 10th May 2016
The finance department has submitted to Congress proposed amendments to the country’s Anti-Money Laundering Act (AMLA) and bank deposit secrecy law, barely two months before the next government takes over. “This is in light of several financial controversies that have exposed the weaknesses of our tax and financial system’s legal framework,” read an April 20 transmittal letter signed by Finance Secretary Cesar V. Purisima and addressed to leaders of the Senate and the House of Representatives. The Finance department cited the February laundering of $81 million stolen from the Bangladesh Bank’s account with the Federal Reserve Bank of New York that was wired to local bank accounts and then used to play in casinos in the Philippines. The proposal also seeks to address foreign banks’ “de-risking” that has led to the closure of accounts of Philippine money transfer operators and subsequently hike in cost for overseas Filipino workers sending money home. The Finance department prepared the proposed amendments to AMLA, or Republic Act (RA) No. 9160, with the Anti-Money Laundering Council and the Bangko Sentral ng Pilipinas (BSP). Among others, the proposal seeks to subject casinos, real estate brokers, art dealers and motor vehicle dealers to the provisions of the current anti-money laundering law. Moreover, amendments to the Bank Secrecy Law (RA 1405) and the Foreign Currency Deposit Act of the Philippines (RA 6426) will allow, for tax administration, examination of deposit accounts without onwers’ written permission.
Philippines seeks to tighten money laundering laws after heist Reuters 10th May 2016
The Philippines started the process to strengthen its anti-money laundering and bank secrecy laws on Tuesday, aiming to plug loopholes that allowed $81 million stolen in one of the world's biggest cyber heists to pass through Manila banks and casinos. The Department of Finance said it was working with the country's anti-money laundering council and central bank to amend the list of entities covered by its anti-money laundering law to include casinos. A draft bill was submitted to Congress, it said. Unidentified hackers infiltrated the computers at the Bangladesh central bank in early February and tried to transfer $951 million from its settlement account at the Federal Reserve Bank of New York.
OJK Amends Bankers Certification Regulation Tempo 2nd May 2016
The Financial Servicea Authority plans to revise its regulation on mandatory risk management certification for bankers. The revision will be aimed at reducing certification cost burden for banks. "After we study [the regulation], level one and level two [bankers] does not need to have [risk management] certification, just professional certification," said Irwan Lubis, OJK’s Deputy Commissioner of Banking Supervision on Monday, May 2, 2016.
BSP tackles impact of de-risking strategy Philstar 30th Apr 2016
The Bangko Sentral ng Pilipinas (BSP) is putting in place measures to cushion the adverse impact of the de-risking activities being undertaken by foreign banks and the money laundering scandal that hit the local financial system on remittances. BSP Governor Amando Tetangco Jr. said in a his keynote address during the Financial Inclusion Summit 2016 organized by the Bank of the Philippine Islands (BPI) Foundation there are concerns needed to be addressed by monetary authorities. “Foremost is the adverse impact on remittance costs and flows of the closure of accounts of several money transfer operators by correspondent banks who are limiting their exposure to possible channels for money laundering and other financial crimes,” Tetangco said.
Securities and Exchange Commission Chairman Steps Down Irrawaddy 29th Apr 2016
In a surprise move, the chairman of the Securities and Exchange Commission submitted a letter of resignation on Thursday to step down from his current post. Also Burma’s former deputy Finance minister, Maung Maung Thein has played an integral part in the Ministry of Finance for the past three years amid a series of initiatives aimed at modernizing the country’s economy. Maung Maung Thein, who had also previously been the general manager of Myanmar Insurance, is known for having introduced private insurance businesses across Burma and for helping create the country’s first stock market. Some 10 private insurance companies now play a key role in the industry since their launch in 2013.
Proposed Legislative Amendments to Enhance the Resolution Regime for Financial Institutions in Singapore Monetary Authority of Singapore 29th Apr 2016
On 23 June 2015, the Monetary Authority of Singapore (MAS) issued a consultation paper on proposed enhancements to the resolution regime for financial institutions in Singapore. MAS has considered the feedback received. The consultation paper and our responses to comments of wider interest can be found on the MAS website at this link.
MOF, MTI announce new appointments to statutory boards Channel News Asia 29th Apr 2016
The Ministry of Finance (MOF) and Ministry of Trade and Industry (MTI) announced on Friday (Apr 29) new appointments to the boards of several statutory boards. Mrs Tan Ching Yee, the incoming Permanent Secretary for Finance, has been appointed as the chairman for the Inland Revenue Authority of Singapore (IRAS), MOF said. She takes over from Mr Peter Ong Boon Kwee, who will take on a new appointment as Permanent Secretary for the Prime Minister’s Office (Strategy), concurrently with his appointment as head of the Civil Service. Mr Ng How Yue, Permanent Secretary for the Ministry of Law, has been named as chairman of the Energy Market Authority (EMA). He succeeds Mr Loh Khum Yean, who has been appointed as Permanent Secretary for Trade and Industry. MTI also announced that Mr Png Cheong Boon has been re-appointed as CEO and board member of JTC. All the appointments take effect from Sunday (May 1).
SGX public consultation on listing rules amendments to align with changes to the Companies Act - Electronic transmission of notices and documents Lexology 28th Apr 2016
After a series of public consultations by the Steering Committee for the Review of the Companies Act, key provisions in the Companies Act (Cap 50) of Singapore (Companies Act) were identified for reform and refinement. The resultant Companies (Amendment) Bill 2014 incorporating such proposed amendments was passed by the Parliament in October 2014, with the changes to the Companies Act effected in two phases, on 1 July 2015 and 3 January 2016 respectively.
Attorney General’s Office and Indonesia Deposit Insurance Corporation to Cooperate in the Handling of Legal Issues Related to Liquidated Bank Assets Hukum 27th Apr 2016
The Indonesia Deposit Insurance Corporation (LPS) and the Deputy Attorney General for Administration and Private Law recently signed an extension of cooperation as regards the handling of issues relating to administration and private law by both the LPS and the Attorney General’s Office. The signing was attended by LPS Executive Chairman, Fauzi Ichsan, as well as by the Deputy Attorney General for Administration and Private Law, Bambang Setyo Wahyudi. The signing means that a cooperation agreement which dates back to 2012 will be extended for another three years.
Indonesia, Turkey, IDB discuss Islamic infrastructure bank The Jakarta Post 26th Apr 2016
Indonesia, Turkey and the Islamic Development Bank ( IDB ) eye to agree on the structure of their planned Islamic infrastructure bank within six months. Finance Minister Bambang Brodjonegoro was in Washington DC representing Indonesia at the IMF-World Bank Spring Meetings from April 12 to 18. There he also held a tripartite meeting with IDB president Ahmad Mohamad Ali and the deputy prime minister of Turkey, Ali Babacan, on the establishment of the Islamic Mega Infrastructure Bank to be cofounded by the three parties.
New Provision on Minimum-Capital Requirements for Commercial Banks Hukum Online 26th Apr 2016
The Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) has issued Regulation No. 11/POJK.03/2016 on the Mandatory Minimum-Capital Requirements for Commercial Banks (“2016 Regulation”). The 2016 Regulation updates provisions relating to commercial-bank obligations to maintain certain levels of funds which relate to their risk profiles, and also states that the OJK is to replace Bank Indonesia (BI) as the regulatory and monitoring body for financial institutions.[1]
Thailand: e-Insurance and e-Policy Regulatory Developments Lexology 22nd Apr 2016
The Office of Insurance Commission (OIC), in collaboration with local insurance associations, is establishing a regulatory framework to conduct insurance business via electronic means, known as e-Insurance. This is part of the Thai Government’s promotion of the digital economy and commerce. The framework is intended to promote e-Insurance with sufficient controls to secure and protect consumers when acquiring personal insurance through electronic transactions via websites, mobile applications, etc.
Indonesian regulator to introduce micro VCs, other incentive Deal Street Asia 22nd Apr 2016
The Financial Services Authority (OJK) said that it is looking at a new regulation that will allow the inception of a micro venture capital (VC) firm with lower capital requirement compared to a regular VC - in a bid to encourage the creation of a wider startup ecosystem in Indonesia. The government also plans to provide more tax incentives for startups and small businesses in a bid to encourage entrepreneurship in the country, create new jobs and increase purchasing power.
New OJK Rule on Guidelines for Investment Managers and Custodian Banks in Managing Real Estate Investment Trusts in the Form of a Collective Investment Contract Lexology 20th Apr 2016
To boost Indonesia’s real estate investment trust ("REIT")'s market, the Financial Services Authority (Otoritas Jasa Keuangan or "OJK") has issued OJK Regulation No. 19/POJK.04/2016 on Guidelines for Investment Managers and Custodian Banks that Manage Real Estate Investment Funds in the Form of a Collective Investment Contract ("OJK Rule No. 19/2016"). While OJK Rule No. 19/2016 has been in force since 4 April 2016, it was only published on OJK's website in mid-April 2016.
Indonesia to launch fintech regulations by end 2016 Deal Street Asia 19th Apr 2016
Indonesia’s Financial Services Authority (OJK) is preparing to launch new rules governing financial technology (fintech) companies by the end of the year. The regulations are expected to help set a healthy ecosystem in which fintech startups could grow and collaborate with traditional banks. Chairman of Board of Commissioners of the Financial Services Authority Muliaman Hadad said the regulator will consult authorities from other countries in the region to get an idea of the industry ecosystem in the regional level. “We will start consulting our peers in China, Australia, Singapore, and Malaysia. I want to see their responses and suggestions first. However, we will try our best to finalise it this year,” said Hadad, Tuesday.
Philippine Central Bank To Reform Anti-Money Laundering Law Following Bangladesh Bank Heist Lawyer Herald 18th Apr 2016
Bangko Sentral ng Pilipinas (BSP), Central Bank of the Philippines has revealed on Saturday penalizing any financial institution involved in laundering $81 million stolen. The fund has been stolen from Bangladesh Bank reserve kept with Federal Reserve Bank of New York in May. Meanwhile, the Philippine central bank has also decided strengthening its regulatory oversight for non-banking financial institutions. Such institutions have allegedly been contributing to the growth of shadow banking in the Philippines.
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