AsianInvestor's regulatory round-up, March 12

China: Banks in line for brokerage licences
The China Securities Regulatory Commission (CSRC) said it was considering issuing securities licences to banks as part of broader moves to reform the country’s financial sector.

The news, which was announced by the CSRC on Monday, follows a report by the regulator last May that spelled out its priorities and actions aimed at promoting the securities industry, one of which included encouraging other financial institutions to apply for securities licences.

However, the CSRC said it is still conducting feasibility studies and that no timetable for the launch had been decided.

Asean: Countries look to streamline prospectus
Singapore, Malaysia and Thailand have jointly signed a memorandum of understanding (MoU) looking to establish a streamlined review framework for the Asean common prospectus.

The MoU was signed on March 3 by the Monetary Authority of Singapore, Singapore Exchange, Securities Commission Malaysia and the Securities and Exchange Commission Thailand. The agreement aims to facilitate cross-border equity and debt offerings across Southeast Asia.

Under the streamlined process, which is expected to go live this year, issuers can expect to wait between three to four months before given authorisation by their home and host regulators.

Although the three countries will be the first to participate in the scheme, other Asean regulators will participate when they are ready.

Hong Kong: SFC consults on investors’ role
The city’s Securities and Futures Commission (SFC) launched a consultation on March 2 looking into the responsibilities investors have in ensuring accountability in the boardroom.

Entitled the Principles of Responsible Ownership, the proposal seeks to provide guidance on how investors should fulfil their ownership responsibilities.

While the take-up of the code is voluntary, the regulator encourages investors to comply with the seven principles, which are:

- to establish and report to their stakeholders their policies for discharging their ownership responsibilities;

- to monitor and engage with their investee companies;

- to establish clear policies on when to escalate their engagement activities;

- to have clear policies on voting;

- to be willing to act collectively with other investors when appropriate;

- to report to their stakeholders on how they have discharged their ownership responsibilities;

- and when investing on behalf of clients, to have policies on managing conflicts of interests.

The consultation ends on June 2.

Korea: Regulator boasts PE industry in “growth stage”
Private equity funds in Korea numbered 277 by the end of 2014, representing a rapid growth rate after the industry started out with just two in 2004.

Aggregate committed capital has now grown to W51.2 trillion ($45.4 billion), of which invested capital was worth W31.8 trillion, according to figures from the country’s Financial Supervisory Service.

During the ten-year period the industry has undergone three distinct stages of development and growth: the early stage (2004-2007), the pre-growth stage (2008-2011), and the growth stage (2012-present), the regulator noted.

Once an institutional framework for investing into PE funds took shape and initial investments were made during the early stage, the PE industry advanced to the pre-growth stage, during which the number and size of funds and general partners (GPs) began to grow rapidly.

“Today, Korea’s PE industry is said to have made the transition to the growth stage as witnessed by an increasing number of fund exits, differentiation among GPs, and large-scale PE-led M&A deals,” the regulator said.

Hong Kong: SFC bans ex-StanChart RM
The Securities and Futures Commission (SFC) has banned Wong Chun Yin, a former relationship manager at Standard Chartered Bank, from re-entering the industry for life.

The financial regulator found that between October 2011 and May 2012, Wong made fund transactions in clients’ accounts without their authorisation to meet his sales targets and tried to conceal his misconduct by tampering with his clients’ contact information.

Wong also falsified client instructions for the transactions by misleading the clients into signing fund order forms which were blank or had essential instruction particulars missing from the forms.

The SFC found that Wong’s dishonest conduct was not in the best interests of clients and was in breach of the SFC’s code of conduct.