Asia Pacific: against the stream

Author: Karry Lai | Published: 28 Aug 2018
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Lightbulb moments

Cryptocurrency news has also dominated Asia Pacific headlines. Japan's Financial Services Agency (JFSA) is reportedly considering changing its existing regulation on cryptocurrency exchanges so that these are regulated under the Financial Instruments and Exchange Act rather than the Payment Services Act. After the $530 million Coincheck theft in January, all exchanges were investigated. The JFSA called on six cryptocurrency exchanges to improve their anti-money laundering practices and to report on their plans. The move caused bitFlyer, the country's largest cryptocurrency exchange, to suspend the creation of new accounts.

Opening information flows

Non-EU financial regulators, including Hong Kong's Securities and Futures Commission (SFC), Japan's JFSA, the UK's Financial Conduct Authority and the US' Securities and Exchange Commission are looking to get an exemption from the General Data Protection Regulation to ease cross-border investigations. The regulators are seeking an administrative arrangement to provide formal exemption to be applied to cross-border information sharing.

The Hong Kong Monetary Authority (HKMA) has created an open application programming interface (API) framework for the banking sector. The move will ease information sharing between banks and third party vendors. The framework is one of seven initiatives announced by the HKMA in September 2017 to prepare Hong Kong for the introduction of so-called smart banking.

Roadblocks ahead

China Mobile has been blocked from entering the US on national security grounds. The decision was made against the backdrop of the growing tensions between US and China. The US Commerce Department is reviewing export controls to strengthen national security reviews of foreign acquisitions of US companies. The proposed legislation will give the Committee on Foreign Investment in the US (Cfius) the power to review transactions for national security risks as well as the creation of a list of new technologies that will be controlled which are likely to include artificial intelligence and robotics technologies that are part of the Made in China 2025 initiative.

The Competition and Consumer Commission of Singapore has provisionally found that the Grab and Uber merger has reduced competition. If the companies fail to address competition concerns, the merger may have to be unwound. Uber took a 27.5% stake in Grab in exchange for the company's operations in eight Asian countries.

Stock market shake up

The Securities and Exchange Board of India (Sebi) has created an expert panel to examine the norms for direct listing of Indian companies abroad. The listing of the equity share capital of companies that are incorporated in India is not allowed on foreign exchanges and vice versa. Although companies incorporated in India can list debt securities on international exchanges through masala bonds, equity share capital can only be listed overseas through an American depositary receipt or global depositary receipt while foreign companies listing on Indian exchanges needs to go through the Indian depositary receipt route.

Sebi has also created a panel to look into options that can help make stock market listing more attractive for Indian startups. The panel will look into the existing institutional trading platform framework, which dates from 2015, to identify areas for improvement.

Hong Kong's SFC has made amendments to the Codes on Takeovers and Mergers and Share Buy-backs. The changes include increasing the voting approval threshold for whitewash waivers to 75% and empowering the Takeovers Panel to require compensation for shareholders who have suffered as a result of a breach of provisions of the Takeovers Code.