On 9 January 2017, the MAS announced the Second Reading of the Securities and Futures (Amendment) Bill 2016 (Bill) in the Singaporean Parliament. The Bill introduces wide-ranging amendments aimed at strengthening the regulation of over-the-counter derivatives markets, enhancing regulatory safeguards for retail investors, enhancing the credibility and transparency of Singapore capital markets, and strengthening the enforcement regime against market misconduct.
On 16 December 2016, the Securities and Futures Commission issued a circular which introduces new measures to heighten the individual accountability of senior management of licensed corporations (LCs), through the designation of one or more Managers in Charge (MICs) of certain core functions. Our e-bulletin of 19 December 2016 on the new MIC Regime, including implementation deadlines, can be located here.
EMIR is the centrepiece of the EU post financial crisis reform of derivatives markets and seeks to address perceived issues with counterparty credit risk and transparency. After a long and difficult consultation period, and some way behind other similar global initiatives, the next major piece of the EMIR framework will soon come into effect, which is the requirement for eligible counterparties to post margin on OTC derivative transactions.
Acting for another – Hong Kong court of final appeal issues important clarification under the prevention of bribery ordinance
In the recent case of HKSAR v Luk Kin Peter Joseph & Yu Oi Kee (FACC 8/2016), the Hong Kong Court of Final Appeal (CFA) clarified the scope of agency in the context of group companies for private sector offences under the Prevention of Bribery Ordinance (POBO).The CFA examined whether an agency relationship existed between directors of a subsidiary as agent and the parent company as principal, and held that for the purpose of section 9 of POBO, an agency relationship can arise without any pre-existing duty (legal, contractual or fiduciary). The mere acceptance of a request to act in relation to the principal’s affairs or business may itself create an agency relationship.
UK and Hong Kong regulators enter into co-operation agreement to foster collaboration and promote innovation
On 7 December 2016, the UK's Financial Conduct Authority (FCA) and the Hong Kong Monetary Authority (HKMA) entered into a co-operation agreement as part of an initiative to promote innovation in their respective markets and to reduce barriers to entry for firms both in the UK and Hong Kong. This is the fifth such co-operation agreement that the FCA has entered into (with previous agreements being concluded with regulators in Australia, China, Singapore and South Korea) and the first such co-operation agreement that the HKMA has entered into, representing a key initiative for the HKMA.
Hong Kong government launches two consultations on legislative proposals to enhance regime for combatting money laundering and terrorist financing
Earlier this month, the Hong Kong government launched two consultations on legislative proposals aimed at bringing Hong Kong in line with international standards for combatting money laundering and terrorist financing. With a mutual evaluation of Hong Kong’s regime with other members of the Financial Action Task Force (FATF) looming in 2018, the government is keen to ensure that Hong Kong’s regime aligns with the FATF’s standards. The consultations will last for two months and will end on 5 March 2017. Subject to the views and comments received, the government aims to introduce the proposed reforms into the Legislative Council in the second quarter of 2017.
On 13 January 2017 the Ministry of Justice ("MoJ") published a call for evidence ("CfE") regarding potential reform of the law concerning corporate criminal liability in respect of economic crime. This publication is the latest development concerning a potential new offence of failure to prevent economic crime, which was first announced by David Cameron in May 2016.
The purpose of the CfE is to enable the MoJ to obtain evidence as to whether reform of the law of corporate criminal liability is required, and if so, what form this should take. If the government determines that reform is required following the CfE then the next stage will be a full consultation on a detailed proposal and draft legislation – likely to take place sometime in the summer of 2017. The changes that may result from this process have the potential to be very significant for corporates, and the fact that there will be full consultation and scrutiny of the proposals is welcome, including the opportunity to engage at this early stage by responding to the CfE.
HKMA issues guidance on empowerment of independent non-executive directors of Hong Kong-incorporated authorised institutions
In its recent circular, the Hong Kong Monetary Authority provided further guidance on the empowerment of independent non-executive directors (INEDs) in the banking industry in Hong Kong, following an industry consultation carried out in early 2016. The guidance examines, amongst other things:
- the role of INEDs;
- the expected practices of locally incorporated authorised institutions (HK-Incorporated AIs) with regard to INEDs; and
- proposed measures to be taken by HK-Incorporated AIs to ensure that there are sufficient suitably qualified people willing to serve as INEDs on the boards of HK-Incorporated AIs.
New guidance issued by the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) clarifies that U.S. attorneys, compliance personnel, and others are not prohibited from providing services related to compliance with U.S. sanctions laws, even where sanctions would otherwise prohibit U.S. persons from direct or indirect involvement in the underlying business activities. To read more from our CC&I team, click here.
New corporate governance standards for Hong Kong authorised insurers came into effect on 1 January 2017
In October 2016, the Office of the Commissioner of Insurance (OCI) revised the Guidance Note on the Corporate Governance of Authorised Insurers (Revised GN10). Under Revised GN10, the OCI not only enhanced the minimum standards of corporate governance that are expected of authorised insurers, but also widened the scope of application of such standards.