Angela Papesch, director of policy and head of the Asia-Pacific office for ISDA, and Jacqueline Low, regional treasury counsel, emerging market sales and trading at Citigroup, gave a rundown of recent regulatory developments in the region.
China
ISDA has submitted draft language for close-out netting to the Chinese Banking and Regulatory Commission, which it hopes will be included in the forthcoming bankruptcy law. It is also finalizing a Chinese translation of the collateral glossary.
India
ISDA is pushing for legislation on closed-out netting, which could be finalized in coming months. It is also is in talks with the Securities and Exchange Board of India regarding clarification on know-your-client requirements relating to offshore derivative trades.
Indonesia
Prohibitions against margin trading of fx positions against the rupiah came into effect last month (DW, 7/15).
Korea
The Financial Supervisory Service this month issued guidelines on over-the-counter transactions, including assessment of appropriateness of transactions and verification of counterparty's legal authority. The move follows the disciplining of three foreign banks for derivative trades with state-owned companies earlier this year (DW, 7/8).
Malaysia
Credit derivative guidelines were introduced earlier this month: loan obligations can be reference assets but not deliverable obligations; funded credit derivative transactions must be marketed and termed as investments.
Singapore
Regulations concerning structured deposits or notes were released mid-October. Prospectus requirements for structured note issues have been widened significantly. Only deposit-linked transactions that are principal-protected, repayable in cash and--in the case of early termination--repaid fully in principal, may be exempted.
Thailand
Bank of Thailand recently widened the scope of acceptable exotic derivatives permissible onshore. Thailand Futures Exchange is preparing its first futures contract launch in coming weeks.
