Welcome to Herbert Smith Freehills’ monthly private wealth industry updates in Asia.
Every month we survey ten Asian jurisdictions for legal developments concerning trust and estate planning which are of interest to the private wealth industry, and provide a succinct summary in a table format. The jurisdictions covered in the update are Hong Kong, Singapore, China, Taiwan, Japan, India, Malaysia, Indonesia, Thailand and the Philippines. We hope that these updates will prove to be a useful resource to keep private clients, business people, and lawyers abreast of legal updates in the region.
Government abolishes fraud exception to summary judgment
With effect from 1 December 2021, the civil procedure rules will be amended to allow victims of fraud in civil litigation to apply for summary judgment from the High Court and the District Court. Before the amendments, the relevant rules provided that summary judgment was not applicable to an action which included a claim by the plaintiff based on an allegation of fraud, which presented obstacles to victims of fraud from seeking speedy redress in the courts.
Insurance Authority issues circular on FATF updates
The Insurance Authority published a circular regarding recent updates from the Financial Action Task Force (FATF). Since February 2020, the FATF has paused its review process for high-risk jurisdictions subject to a call for action, namely Iran and the Democratic People’s Republic of Korea, in light of the Covid situation. The circular also highlighted other recent developments, including updates on the statement on Jurisdictions under Increased Monitoring, the various outcomes of the FATF plenary held from 19 to 21 October 2021, and the Revised Application Paper on Combating Money Laundering and Terrorist Financing by the International Association of Insurance Supervisors.
SFC refines requirements on enhanced fund data reporting
In line with international regulatory developments on fund data reporting, the Securities and Futures Commission (SFC) has issued a circular to inform management companies of SFC-authorised unit trusts and mutual funds of its refined requirements on enhanced fund data reporting. The refinements aim to increase the SFC’s ability to perform its supervisory and regulatory responsibilities. In particular, the circular supplements the 2018 enhanced requirements, and sets out the reporting frequency for various types of reports, with the first report date on 31 December 2021. The reporting forms set out the fund data required to be submitted in full.
MAS concludes world’s first cross-border digital trade financing pilot
On 11 November 2021, the Monetary Authority of Singapore (MAS), the Infocomm Media Development Authority (IMDA), the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) and three commercial partners concluded the world’s first cross-border digital trade financing pilot. The scheme facilitated the transfer of electronic records between jurisdictions that adopted the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Electronic Transferable Records (MLETR). Following the pilot, selected systems and trade platforms can be used for live shipments of goods between United Arab Emirates and Singapore.
MAS revises Guidelines on Corporate Governance for FIs in Singapore
The MAS has released revised Guidelines for Corporate Governance for Financial Institutions (FIs) incorporated in Singapore, replacing the previous Guidelines of 3 April 2013. The revised Guidelines explain good corporate governance practices that FIs should observe in relation to issues such as board and remuneration matters.
MAS includes Investment holdings data in SGFinDex
On 8 November 2021, the MAS launched the second phase of the Singapore Financial Data Exchange (SGFinDex), which enables individuals to view information on their investment holdings at The Central Depository (CDP) as part of their consolidated financial position. This expands the range of information individuals can view in respect of their financial portfolio to facilitate better financial decisions and planning.
Government rolls out property tax trials in pilot areas
The Standing Committee of the National People’s Congress has authorised the State Council to pilot property tax reforms in certain regions, with an aim to advance the property tax legislation proactively and to facilitate the steady development of the property market. Tax will be levied on all types of residential and non-residential property, excluding rural homesteads and houses built on them. The State Council is still considering the list of pilot areas, and the Ministry of Finance and the State Taxation Administration will prepare the measures for this pilot scheme.
Tax authority reminds businesses of applicable income tax agreements
On 11 November 2021, the National Taxation Bureau of Taipei, Ministry of Finance (NTBT) issued an announcement to remind businesses that there are 33 comprehensive income tax agreements in force. If a profit-seeking enterprise receives income from any of the contracting foreign countries, it should consider whether there are applicable provisions on tax exemption or a limited tax rate, and avoid double taxation.
Ministry of Justice discloses beneficial ownership of Japanese companies
In response to the evaluation report of the Financial Action Task Force (FATF) in August 2021, the Ministry of Justice (MOJ) will implement a new policy that discloses the beneficial ownership of the Japanese companies to the commercial registry offices. This policy will take effect in January 2022, to encourage more companies report the identities of their investors.
SEBI warns debenture trustees of dealings in unregulated products
The Securities and Exchange Board of India (SEBI) noticed that some registered Debenture Trustees were undertaking activities related to unregulated products, such as acting as a trustee for digital gold, in contravention of the SEBI Act 1992 and the SEBI (Debenture Trustees) Regulations 1993. SEBI also warned that it will take action against such Debenture Trustees.
BNM participates in cross-border payments proof-of-concept
Bank Negara Malaysia (BNM), Payments Network Malaysia Sdn Bhd (PayNet), and their international partners will collaborate on a proof-of-concept to explore the feasibility of linking the real-time payment systems in Malaysia, Singapore and the Euro area, with an aim to enable fast, secure and cashless cross-border payments. The outcome of this collaboration will be published around end-2022.
Government ratifies Tax Regulation Harmonization Law
The government has ratified the Law No. 7 of 2021 on Harmonization of Tax Regulations, which aims to create a more just taxation system and to increase compliance by taxpayers. The law introduces a six-month voluntary disclosure programme to invite taxpayers to disclose their historically undisclosed assets, which will take effect from 1 January 2022 to 30 June 2022. Taxpayers that choose to report their unrevealed assets acquired between 1 January 1985 and 31 December 2020 shall be subject to income tax at a stipulated rate.
Government considers updating AML legislation
The cabinet and parliament are considering the existing anti-money laundering (AML) regulations in face of the recommended revisions from the Financial Action Task Force (FATF). Possible amendments include to widen the definition of financial institutions to encompass fintech businesses and to extend the scope of the definition of a politically-exposed person. These proposed amendments are subject to further changes.
BSP signs FinTech cooperation agreement with MAS
Bangko Sentral ng Pilipinas (BSP) and the MAS have signed a cooperation agreement that aims at facilitating the inter-operable e-payments between the two countries. The agreement also highlights the fact that ASEAN members are beginning to link their domestic payment systems.
The contents of this document are for reference purposes only. Some of the information comes from public sources and this may not be comprehensive, accurate or up to date; where we have relied on third party information and sources, this has not been verified by us. The document does not constitute legal advice, and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication, and any facts in this document should be checked for your specific circumstances at the time you wish to use or refer to them.