Asia

Topic: Regulation and compliance

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SFC launches consultation on anti-money laundering guidelines

The Securities and Futures Commission (SFC) has launched a three-month consultation on proposals to amend its anti-money laundering and counter-financing of terrorism (AML/CFT) guidelines for licensed corporations (LCs) and associated entities (AEs).[1] The proposed amendments aim to align the AML/CTF guidelines with the Guidance for a Risk-based Approach for the Securities Sector (RBA Guidance) issued … Continue Reading

IOSCO issues measures to reduce conflict of interests in debt capital raising

On 21 September 2020, the International Organization of Securities Commissions (IOSCO) published a final report containing guidance on potential conflicts of interest and associated conduct risks market intermediaries may face during the debt capital raising process. The guidance is in the form of nine measures. Each measure is designed to address one or more of … Continue Reading

New US DOJ guidance on corporate compliance programs emphasizes dynamic program design and implementation

During the summer, the United States Justice Department announced the latest set of updates to its “Evaluation of Corporate Compliance Programs” policy. The policy, which was first released in 2017 and revised last year, provides companies with detailed guidance on how the Department will review the adequacy and effectiveness of compliance programs when making charging … Continue Reading

Insurance Authority consults on draft rules for insurance-linked securities regulatory regime

On 4 September 2020, the Insurance Authority (IA) launched a six-week consultation on the proposed Insurance (Special Purpose Business) Rules (SPB Rules). The consultation ties in with the introduction of the new regulatory regime for the issuance of insurance-linked securities (ILS) which is expected to come into operation in 2021. The SPB rules will be added … Continue Reading

SFC issues FAQs on licensing obligations of family offices

The Securities and Futures Commission (SFC) has published FAQs to provide additional guidance on the licensing obligations of single family offices and multi-family offices under the Securities and Futures Ordinance (SFO). The FAQs follow the SFC’s circular issued on 7 January 2020 relating to the licensing obligations of family offices which conduct business in Hong … Continue Reading

Regulatory framework for haircuts on non-centrally cleared securities financing transactions – FSB extends implementation deadlines

On 7 September 2020, the Financial Stability Board (FSB) issued a press release stating that it has decided to delay by one year the implementation dates for its policy recommendations relating to minimum haircut standards for non-centrally cleared securities financing transactions. In August 2013 the FSB developed policy recommendations to address financial stability risks that … Continue Reading

Insurance Authority extends the validity of temporary facilitative measures to 31 December 2020

The Insurance Authority has issued a circular today extending Phase 2 of the temporary facilitative measures (TFMs), introduced in March 2020, by another three months (i.e. to 31 December 2020) in light of the current COVID-19 situation. The Phase 2 TFMs permit insurers and intermediaries to use non-face-to-face distribution methods for selling certain insurance products … Continue Reading

Insurance Authority consults on the proposed capital rules for insurance groups

The Hong Kong Insurance Authority (IA) has published a consultation paper on the proposed Insurance (Group Capital) Rules (Group Capital Rules), marking the launch of a six-week public consultation which will end on 30 September 2020.  The consultation ties in with the implementation of the new supervisory framework for multinational insurance groups, which is due … Continue Reading

IOSCO report on liquidity provision in the secondary markets for equity securities

On 11 August 2020, the International Organisation of Securities Commissions (IOSCO) published a report, Liquidity provision in the secondary markets for equity securities. The report identifies some of the key elements of market making programs that may help promote the provision of liquidity, strengthen investor confidence and foster fair and efficient markets. The report focuses … Continue Reading

Basel Committee releases consultative documents on Principles for operational risk and operational resilience

On 6 August 2020, the Basel Committee on Banking Supervision (Basel Committee) published a consultative document seeking comments on proposed Principles for operational resilience. Given the natural relationship between operational resilience and operational risk, the Basel Committee is also proposing to update its Principles for the sound management of operational risk (PSMOR). The Basel Committee … Continue Reading

FSB report : Financial stability implications and policy measures taken

On 15 July 2020, the Financial Stability Board (FSB) published a report that provides an update on financial stability developments and risks relating to COVID-19, the policy actions taken to date and how they relate to the FSB principles, the factors that affect the effectiveness of policies and their implementation and the way forward. The … Continue Reading

Last chance to take part – Global operational resilience survey

Operational resilience, which has risen to increased prominence over recent years, has been brought into even sharper focus following the outbreak of COVID-19. Our risk consulting team is carrying out a survey to explore how financial institutions are managing their crisis response planning and preparedness in the event of severe operational disruption, particularly leading up … Continue Reading

HKMA publishes guidance on range of practices adopted by major banks for managing climate risks

Following the recent publication of a white paper setting out the Hong Kong Monetary Authority’s (HKMA) initial thoughts on supervisory expectations for the management of climate risks (to read our blog post on this, please click here), the HKMA has issued a circular to provide greater detail on the relevant practices adopted by major banks … Continue Reading

HKMA publishes white paper on green and sustainable banking

The Hong Kong Monetary Authority (the HKMA) has published a white paper outlining its initial views on the supervisory expectations for authorized institutions (AIs) in addressing climate-related issues. The development of the supervisory expectations forms part of the work envisaged under phase 2 of the three-phased approach introduced by the HKMA in May 2019, which … Continue Reading

HKMA revises supervisory policy manual modules CA-G-1 “Overview of Capital Adequacy Regime for Locally Incorporated Authorized Institutions” and RE-1 “Recovery Planning”

The Hong Kong Monetary Authority (HKMA) has issued, by notice in the Gazette, revised versions of the Supervisory Policy Manual (SPM) modules CA-G-1 and RE-1 as statutory guidelines under section 7(3) of the Banking Ordinance.[1] CA-G-1 “Overview of Capital Adequacy Regime for Locally Incorporated Authorized Institutions” The changes incorporated in the revised SPM module CA-G-1 … Continue Reading

Insurance Authority extends Phase 2 of temporary facilitative measures implemented in light of COVID-19

Further to the introduction of the Phase 2 temporary facilitative measures (TFMs) on 27 March 2020, the Insurance Authority (IA) has released a circular announcing that Phase 2 of the TFMs will be extended by three months in view of the COVID-19 pandemic. The Phase 2 TFMs (amongst other things) permit insurers and intermediaries to … Continue Reading

Doing business in the EU after the transition period

We have updated our popular client briefing note ‘Doing business in the EU’ covering the temporary transitional relief measures EU27 Member States are implementing, if any, for the period after the transition period should the UK/EU not enter into a free trade agreement. For a copy of the updated briefing note please contact Simon Lovegrove.… Continue Reading

SFC publishes consultation conclusions on the proposed refinements to the scope of regulated activities and competence requirements under the OTC derivatives licensing regime

The Securities and Futures Commission (SFC) has published its consultation conclusions on the proposed refinements to the scope of regulated activities and competence requirements relating to the over-the-counter (OTC) derivatives licensing regime (the Consultation Conclusions) contained in its consultation paper dated 20 December 2017 (the Consultation Paper), following feedback from industry associations, market participants, professional … Continue Reading

HKMA publishes feedback from thematic reviews of AML and CFT control measures for remote customer on-boarding initiatives

The Hong Kong Monetary Authority (HKMA) has published a circular setting out key observations and good practices relating to anti-money laundering (AML) and counter-financing of terrorism (CFT) control measures applicable to remote customer on-boarding initiatives. The feedback is based on recent thematic reviews, engagement with authorized institutions (AIs) and technology firms in the Fintech Supervisory … Continue Reading

HKMA publishes guidance on additional measures to alleviate the impact of COVID-19

Following the deferral of the implementation of Basel III announced by the Group of Central Bank Governors and Heads of Supervision on 27 March 2020, the Basel Committee on Banking Supervision (BCBS) issued additional guidance[1] to alleviate the impact of COVID-19 on the global banking system on 3 April 2020.  In light of this, the … Continue Reading

Insurance Authority issues circular on application of certain guidelines in response to COVID-19

In recognition of the impact of COVID-19 on the insurance industry and taking into account a request made by the Hong Kong Federation of Insurers, the Insurance Authority (IA) has issued a circular, announcing that it will modify the approach for bringing certain guidelines into effect. In relation to the following guidelines (which took effect … Continue Reading

HKMA releases common assessment framework on green and sustainable banking

In May 2019, the Hong Kong Monetary Authority (HKMA) introduced a three-phased approach to support the development of green and sustainable banking in Hong Kong. The HKMA has now released the common assessment framework under Phase 1, following feedback received from the banking industry. The common assessment framework will be used to assess the “greenness” … Continue Reading

Roundup of green and sustainable finance regulatory developments

Earlier this month, a joint statement was issued in relation to the establishment of the Green and Sustainable Finance Cross-Agency Steering Group (the Steering Group). This follows a number of recent announcements aimed at supporting the development of sustainable finance in Hong Kong and highlights that tackling climate change remains a top priority for the … Continue Reading

SFC defers introduction of initial margin requirements for non-centrally cleared OTC derivatives in light of COVID-19

The Securities and Futures Commission (SFC) has announced that the introduction of the initial margin (IM) requirements for non-centrally cleared OTC derivative transactions, initially scheduled to be phased-in from 1 September 2020, will be deferred by one year. To read our previous blog post on the SFC’s consultation conclusions on margin requirements for non-centrally cleared … Continue Reading
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