Search results for

It’s crunch time for the revised Markets in Financial Instruments Directive. Esma must heed the industry’s concerns over liquidity, costs and access to prevent disaster in 2017

Market participants have warned about liquidity shortages and market volatility as possible causes of the next so-called black swan event.

The new Minister of Finance, Vishnu Lutchmeenaraidoo, presented his first budget on March 23 2015. He qualified the budget as a no-tax budget, although it is perhaps more accurate to describe it as a no-new-tax budget. It is clear that the budget is aimed at boosting growth and investment.

Oene Marseille Emir Nurmansyah The central bank of Indonesia, Bank Indonesia, has issued regulation 16/21/2014, which is effective as of January 1 2015, requiring all non-exempt, non-bank entities to comply with certain minimum hedging, liquidity, credit rating, and reporting requirements when they take out foreign loans. The regulation applies to all foreign loans, which is defined broadly to include all rupiah or foreign-currency denominated debts owing by a resident of Indonesia to a non-resident. Resident of Indonesia includes any person or legal entity that is has been or plans to be domiciled in Indonesia for at least one year.

Rodrigo de Campos Vieira Due to the historic lack of financing sources for hotel projects in Brazil, the market has sought out creative fundraising mechanisms to meet the substantial deficit of hotel rooms in Brazil. The most successful financing structure known to date, referred to as condo-hotels, involves the sale of autonomous units from real-estate development projects or as an ideal fraction of real estate. The former integrates a pool of hotels managed by a professional operator, to individuals or corporations. The proceeds of the real-estate development project are distributed to the owners of the condo-hotel units by the operator of the pool of hotels.

Masaki Mizukoshi The amended Companies Act went into effect on May 1 2015. One of the major changes in the amendment was the introduction of a new corporate structure – a company with an audit committee. This was introduced to make it easier for Japanese companies to utilise outside directors and so to enhance the monitoring of executive directors of the company. The audit committee must consist of at least three directors, the majority of which must be outside directors, and an executive director or employee of the company or one of its subsidiaries may not be a member of the audit committee. Like a statutory auditor in a company with a board of statutory auditors, which is a very common corporate structure among Japanese listed companies, the audit committee in the new structure has the power to audit the execution of duties by directors (other than members of the audit committee) and prepare an audit report. In addition, the audit committee has the unique power to state its opinion on the nomination and remuneration of directors (other than members of the audit committee) at a shareholders meeting, and through exercising this power properly, the audit committee is expected to achieve more effective monitoring of executive directors.

Vicente D Gerochi Arvin Kristopher Razon The Philippine public-private partnership (PPP) programme, which the administration of President Aquino hopes will fast-track infrastructure development, has attracted a lot of interest from local and foreign investors. Nine projects have been awarded since 2010, including the NAIA Expressway, the LRT Line 1 Cavite Extension, the Mactan-Cebu International Airport Terminal, the Automated Fare Collection System, and the public school projects. Aside from these, 11 projects were rolled out in 2014, including the Laguna Lakeshore Expressway, which is the biggest project to date with a value of $2.73 billion. Local government units have also initiated their own PPP projects. With 50 more projects in the pipeline, the PPP programme could be the key to addressing the country's critical infrastructure backlog. However, concerns have been raised as to the sustainability of the programme. Will succeeding administrations continue to support it? Can best practices developed from, and the lessons of, past biddings be institutionalised?

Muharrem Küçük Tolga Çabakli The new regulation on Principles and Procedures Applicable to Factoring Transactions (Regulation) was published by the Banking Regulation and Supervision Agency on February 4 2015 (Official Gazette 29257). The Regulation includes provisions related to: (i) invoicing; (ii) provision of negotiable instruments; (iii) assignment of future receivables; and (vii) retention of documents. The Regulation aims to prevent any fictive factoring transactions. It is prohibited to enter into any factoring transaction without a genuine invoice or a document which is also treated as the invoice. Banks and factoring companies incorporated in Turkey (Institutions) are required to inspect transactions to verify whether invoices are repeating or recurring, through the Central Invoice Record System. Additionally, if an invoice has been cancelled, clients must notify the Institutions and for the provision of new replacement invoices an undertaking must be provided by clients.

Daniel Futej Cyril Hric In November 2014, the Slovak Parliament passed Act 371/2014 on resolving crisis situations on the financial market and on amending certain acts (Act). The Act transposes Directive 2014/59/EU (which establishes a framework for the recovery and resolution of credit institutions and investment firms) of the European Parliament and of the Council (BRRD) into Slovak law. The objective of implementing the BRRD is to introduce the new framework of prevention and resolution of potential crisis situations on the financial market, which was created at the EU level in response to the financial crisis. The financial crisis demonstrated the extensive scope and range of risks on the financial market, where the complexity of interconnection means that the failure of one financial institution may cause a systemic crisis that has the potential to affect the entire financial system. The priority of the Act is to implement the effective crisis management system created by the BRRD. According to the Act, the Resolution Council (Rada pre riešenie krízových situácií – the Council) was established on January 1 2015 as the national resolution authority in the Slovak Republic. The institutions that fall within the competence of the Council are credit institutions and investment companies with share capital of at least €730,000. The Council is part of the Single Resolution Mechanism (SRM), which comprises: (i) the Single Resolution Board, based in Brussels; (ii) the national resolution authorities of the euro area countries; (iii) the national resolution authorities of those other EU member states that have opted to participate in the SRM.

The FSB’s consultation on total loss-absorbing capacity is the last significant piece of post-crisis reform. But there are concerns about how it will work in practice