RED TAPE ROUNDUP: PBoC relaxes RMB trade settlement rules, SFC establishes risk unit, Myanmar looks to end currency peg

In this round up of recent regulatory news, the People’s Bank of China relaxes rules related to renminbi trade settlement, Hong Kong’s Securities and Futures Commission establishes a unit to monitor systemic risk, Myanmar seeks to end 35-years of having a pegged currency, the Reserve Bank of India looks to set capital ratios higher than Basel III and Japan launches investigation into advisory firms.

  • 06 Mar 2012
Email a colleague
Request a PDF

PBoC relaxes RMB trade settlement rules

The People’s Bank of China relaxed rules on renminbi settlement on March 2 by allowing all firms in the country to pay for cross-border transactions in the currency.

For the past two and a half years, the central bank has only allowed companies on the on the mainland designated enterprises (MDEs) list to conduct exports in renminbi. Chinese exports were valued at US$1.9 trillion in 2011, however as at December 2010, there were only 67,359 MDEs.

The new rules only apply to exports.

"Companies that can settle their trades in yuan [renminbi] are no longer restricted to those selected for the pilot programme. All registered exporters and importers can now settle their trades in yuan," the People's Bank of China said in a statement.

CBRC encourages green lending

China Banking Regulatory Commission has asked lenders to pay special attention to the environmental and social impacts of their customer projects and use the results to determine ratings and access to credit.

The assessment covers areas ranging from energy consumption, pollution, land use, health, safety, relocation of residents, to ecological protection and climate change, reports news agency Xinhua.

The move will reduce lending to industries with high energy consumption and high levels of pollution.

SFC establishes risk unit

Hong Kong’s Securities and Futures Commission has set up a commission charged with reducing systematic risk and maintain financial stability in the city’s financial markets.

The Risk and Strategy Unit is headed by Bénédicte Nolens, who took up the role of senior director of risk and strategy on March 5. Before joining the SFC, Nolens was managing director and the head of compliance for the Asia Pacific region at Credit Suisse, overseeing compliance for the investment banking, private banking and asset management divisions.

Reporting to the chief executive officer Ashley Alder, the new unit is tasked with identifying and evaluating large risks facing the financial sector and working with SFC divisions to determine the priorities for the watchdog to address these risks.

Myanmar looks to end currency peg

The Southeast Asian nation of Myanmar is planning to end its fixed exchange as the country looks to expands it economic ties with developed nations, reports Bloomberg.

Authorities will soon announce a shift to a managed float of the kyat, the local currency, and seek to keep it from rising beyond the informal rate of about 800 per dollar, a person familiar with the discussions told Bloomberg. Officials will then activate an interbank exchange market, in which the central bank will intervene to influence the kyat’s value.

The move would end a 35-year peg to the IMF’s special drawing rights. Currently there is MMK6.4 to one US dollar.

RBI seeks capital ratios higher than Basel III

The Reserve Bank of India (RBI) has indicated it will ask banks to have higher capital adequacy ratios than those under the Basel III reforms.

Speaking at a conference on March 1, Deepak Singhal, chief general manager at the central bank said: “A requirement of one per cent above the floor set under Basel III would not impact Indian banks. RBI would not like our banks to be seen as laggards,” reports the Business Standard.

RBI has proposed tier one capital of at least 7% and said the total capital be kept at least 9%. It has also proposed a capital conservation buffer in the form of common equity of 2.5% of risk weighted assets, reported the newspaper.

Basel III guidelines prescribe a minimum tier one capital ratio of 4.5%.

India regulator sets out new oversight of co-op banks

The Business Standard newspaper also reported that India’s central bank has set out a new framework for supervising urban cooperative banks which defers the point at which the RBI gets involved.

Banks need to take steps to improve their capital adequacy positions if the ratio falls below 9%.

"The corrective action should include measures for augmenting capital, close monitoring of NPAs (non-performing assets) and its recovery, especially large NPAs, improving profitability by curtailing expenses and mobilising low-cost deposits, depending on the nature of the deficiency," said the RBI in a notice.

The RBI will now begin monitoring a co-op if its capital adequacy ratio falls below 6%, gross bad loans exceeded 10% of the loan book or deposits were concentrated in the hands of a few depositors, or its credit-deposit ratio rises higher than 70%.

Japanese regulator launches probe into all advisory firms

Japan’s Financial Services Agency (FSA) has launched an investigation into all the country’s investment advisory firms and it continues to scrutinise the suspected loss of more JPY210 billion (US$2 billion) of company pension funds by AIJ Advisors.

The FSA has asked all 265 fund management companies to disclose more information on their operations including whether they had set up investment trust funds overseas and whether they use external auditors.

The financial regulator suspended AIJ on February 24 after the advisory firm couldn’t account for the money it managed.

Thailand to court votes in favour of flood package

Thailand’s Constitutional Court has voted in favour of government’s post-flood spending plans including transferring the debt of the Financial Institutions Development Fund (FIDF) debts to the Bank of Thailand.

On February 22, Judges voted 7-2 in favour of the transfer, which will make the country’s central bank responsible for the interest payments on the debt related to the Asian financial crisis as well as principal.

The nine judges voted unanimously to allow an executive order that gives the government permission to borrow THB350 billion (US$11.4 billion) to fund water management and flood rehabilitation projects.

  • 06 Mar 2012

Bookrunners of International Emerging Market DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 7,508.01 16 15.54%
2 HSBC 7,147.22 22 14.80%
3 Deutsche Bank 5,436.77 11 11.25%
4 JPMorgan 3,674.16 10 7.61%
5 Bank of America Merrill Lynch 2,414.03 9 5.00%

Bookrunners of LatAm Emerging Market DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 3,783.77 4 20.92%
2 HSBC 3,266.83 3 18.06%
3 Deutsche Bank 2,977.43 1 16.46%
4 JPMorgan 1,766.98 6 9.77%
5 Bank of America Merrill Lynch 1,683.06 6 9.31%

Bookrunners of CEEMEA International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 15 Jan 2018
1 Citi 3,111.25 5 23.30%
2 HSBC 2,253.75 3 16.88%
3 Deutsche Bank 1,520.23 3 11.39%
4 Sumitomo Mitsui Financial Group 1,341.03 2 10.04%
5 Standard Chartered Bank 1,291.27 1 9.67%

EMEA M&A Revenue

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 02 May 2016
1 JPMorgan 195.08 50 10.55%
2 Goldman Sachs 162.26 37 8.77%
3 Morgan Stanley 141.22 46 7.64%
4 Bank of America Merrill Lynch 114.20 33 6.18%
5 Citi 95.36 35 5.16%

Bookrunners of Central and Eastern Europe: Loans

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 ING 3,668.64 29 9.07%
2 UniCredit 3,440.98 25 8.50%
3 Sumitomo Mitsui Financial Group 3,156.55 13 7.80%
4 Credit Suisse 2,801.35 8 6.92%
5 SG Corporate & Investment Banking 2,478.18 21 6.12%

Bookrunners of India DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 AXIS Bank 51.86 2 27.57%
2 Standard Chartered Bank 45.42 1 24.14%
2 Mitsubishi UFJ Financial Group 45.42 1 24.14%
2 CITIC Securities 45.42 1 24.14%
Subtotal 188.11 3 100.00%