Bridging the FinTech gap: What dividend should we seek from regulatory cooperation across jurisdictions?

Technology-facilitated innovation in financial services, a diverse collection of topics which coalesces under the portmanteau term of “FinTech”, is increasingly in the sights of policy-makers, whether at global, regional and national or state levels.  Keen observers will have noted a proliferation of consultation documents, statements, warnings, speeches and more emanating from national regulators.  Some of these recent publications address specific FinTech applications. Indeed, there has been a veritable deluge of material on Initial Coin Offerings over just the past few months.

Meanwhile bodies such as the Financial Stability Board (FSB), the influential Basel Committee on Banking Supervision (BCBS), and others, both within and without the traditional regulatory cohort, are making some efforts towards setting out (or attempt to setting out) some universal principles or truths which may address an increasingly gaping hole in the global regulatory policy canon.

We are at an early stage in the development of policy responses to FinTech, and it is perhaps unsurprising that globally agreed standards have yet to emerge.

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Filed under Regulatory Reform, Sector Updates by Herbert Smith Freehills

Hong Kong SFC issues new guidance note and FAQs on regulatory cooperation and its benefits

On 12 December 2017, the Securities and Futures Commission (the SFC) published its Guidance Note on Cooperation with the SFC (the Guidance).

The Guidance contains an updated section on disciplinary proceedings and a new section on proceedings in the civil courts and the Market Misconduct Tribunal (MMT). It does not apply to criminal proceedings, which is subject to the unfettered discretion of the Department of Justice. The Guidance replaces the previous version issued in March 2006. Continue reading

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Filed under Hong Kong, Investigations, Sanctions and Money Laundering

Hong Kong SFC announces investor ID regime for Northbound trading under Stock Connect

On 30 November 2017, the Securities and Futures Commission (SFC) announced that it had reached an agreement with the China Securities Regulatory Commission (CSRC) on proposals to introduce an investor identification (investor ID) regime for Northbound trading under the Mainland-Hong Kong Stock Connect schemes. The regime is intended to improve Mainland-Hong Kong cross-border market surveillance and is scheduled to be implemented by the third quarter of 2018. Continue reading

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Filed under Announcements, Hong Kong, Investment banking

The EU publishes a list of non-cooperative tax jurisdictions

On 5 December 2017, the EU published its list of 17 non-cooperative jurisdictions for tax purposes. The list forms part of the EU’s work to clamp down on tax evasion and avoidance, presenting a united front to dealing with non-EU jurisdictions that, in the EU’s view, encourage abusive tax practices. The 17 jurisdictions identified are: American Samoa, Bahrain, Barbados, Grenada, Guam, Korea (Republic of), Macao SAR, Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago, Tunisia and United Arab Emirates. Continue reading

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Filed under Announcements, Europe, Sector Updates by Herbert Smith Freehills

DOJ ENHANCES AND MAKES PERMANENT FCPA SELF-DISCLOSURE PILOT PROGRAM

On November 29, 2017, the US Department of Justice (DOJ) announced that the Pilot Program it launched in 2016 to encourage companies to self-report potential violations of the federal anti-bribery Foreign Corrupt Practices Act (FCPA) would be made permanent, subject to some amendments. The Pilot Program offers incentives to companies, including leniency, that self-report FCPA violations and cooperate with DOJ investigations. Continue reading

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Filed under Announcements, Bribery and Corruption, US

Corporate Crime monthly update – November 2017

Welcome to the November 2017 edition of our corporate crime update – our round up of developments in relation to corruption, money laundering, fraud, sanctions and related matters. Our update now covers a number of jurisdictions. For the full update on each jurisdiction, please click on the name of the jurisdiction below. Below we provide a brief overview of what is covered in each update. Continue reading

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Filed under Corporate Crime, Herbert Smith Freehills, Investigations, Sanctions and Money Laundering, Sector Updates by Herbert Smith Freehills

CHINA’S AMENDED ANTI-UNFAIR COMPETITION LAW – WHAT THE BRIBERY PROVISIONS MEAN FOR COMPANIES DOING BUSINESS IN CHINA

China’s amended Anti-Unfair Competition Law (amended AUCL) comes into force on 1 January 2018. Much has been written about the various iterative drafts released over the 18-month consultation period. But the final amended AUCL omits some of the more radical amendments proposed and in some ways represents a reduced risk to companies provided they transact on commercial and well-documented terms. We set out our analysis below of the anti-bribery provisions. Continue reading

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Filed under Announcements, Bribery and Corruption, China, Sector Updates by Herbert Smith Freehills

Hong Kong SFC publishes consultation conclusions on asset management regulation and launches further consultation

On 16 November 2017, the Securities and Futures Commission (SFC) in Hong Kong published its consultation conclusions on proposals to enhance asset management regulation and point-of-sale transparency (the Proposals) (please click here for our e-bulletin on the SFC’s consultation).

The SFC received 38 written submissions from key players in the asset management industry and, as the majority of respondents supported the Proposals, the SFC has largely adopted them and the proposed changes to the Fund Manager Code of Conduct (FMCC) and the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission (Code of Conduct), with certain modifications or clarifications of the regulatory intent. The revised FMCC and Code of Conduct will come into effect on 17 November 2018 and 17 August 2018 respectively. The SFC has indicated that it will provide further guidance to the industry by way of a set of frequently asked questions, which will be updated from time to time.

The SFC has also launched a further consultation on disclosure requirements applicable to discretionary accounts under the Code of Conduct. The deadline for submitting written comments is 15 January 2018. Our recent e-bulletin outlines the above in more detail. We will be holding a seminar on 8 December 2017 in Hong Kong to discuss the implications of the above for asset managers. Further details will be provided. In the meantime, please do not hesitate to reach out to William Hallatt, Hannah Cassidy, Jeremy Birch or your usual Herbert Smith Freehills contact.

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Filed under Asset management, Hong Kong, Non-UK regulation, Regulatory Reform, Sector Updates by Herbert Smith Freehills

NEW SANCTIONS TARGETING VENEZUELA AND MALI

On 13 November 2017, the EU Council unanimously voted to impose a wide range of targeted sanctions on Venezuela in response to the growing political crisis in the country. Notably, the new EU sanctions go further than current US measures against Venezuela by including an arms embargo, as well as a travel ban and an asset freeze.

Further to a similar regime being imposed on Mali in order to target those seeking to derail the 2015 peace agreement, the UK has laid the legal groundwork for financial sanctions to be imposed once relevant individuals have been identified. Please click here for our full briefing.

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Filed under Announcements, Europe, Sanctions and Money Laundering, Sector Updates by Herbert Smith Freehills

Singapore’s MAS issues Guide to Digital Token Offerings

On 14 November 2017, the Monetary Authority of Singapore (MAS) issued a guide during the first day of the Singapore FinTech Festival to provide general guidance on the application of the securities laws administered by the MAS, namely the Securities and Futures Act (SFA) and the Financial Advisers Act, to offers or issues of digital tokens in Singapore.

This follows the MAS’s clarification on 1 August 2017 that an offer or issue of digital tokens would be regulated if these tokens constitute products which are regulated under the SFA. Our e-bulletin in August 2017 regarding the clarification can be accessed here.

In our recent bulletin, we highlight the key points in the MAS guide and set out our observations. If you wish to discuss this further, please do not hesitate to reach out to our Asia team (the contact details of which are set out in the bulletin) or your usual Herbert Smith Freehills contact.

Herbert Smith Freehills LLP is licensed to operate as a foreign law practice in Singapore. Where advice on Singapore law is required, we will refer the matter to and work with licensed Singapore law practices where necessary.

 

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Filed under Announcements, Regulatory Reform, Singapore