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Regulation

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  • The Financial Conduct Authority’s study of competition in investment banking has found no need for action over competition in the primary debt markets, in contrast to equities (see separate story). However, the regulator said it will closely monitor the use of reciprocity to award mandates, particularly in covered bonds.
  • The recent reforms to liberalise China inbound investments have reignited discussions about a merger of the qualified foreign institutional investor (QFII) scheme with the RMB QFII (RQFII) initiative. News emerging today suggests regulators are keen to move forward with the harmonisation of existing rules.
  • The volatility in renminbi markets has meant local corporates have had to adjust their expectations for the RMB, but Commonwealth Bank of Australia is seeing the currency growing in popularity.
  • In this round-up, China reports the first gain in foreign exchange reserves for March, a treasury official said preparations for the Shenzhen Connect have been completed, an RMB globalisation index dropped further in February, and Deutsche Bank assisted a corporate client set up a cross-border RMB liquidity solution. Plus, a recap of our top stories this week.
  • Belgium’s economic ministry mistakenly pitted itself against one of the main goals of Capital Markets Union — and possibly the fundamental EU law of free movement of capital — when it ruled recently that international securitizations may not purchase Belgian consumer credit receivables; a rule that GlobalCapital has learned is now under review.
  • HSBC’s group chief executive Stuart Gulliver told clients at a forum in Hong Kong on Thursday that China deserves patience as it attempts its economic transition, adding that he expects Mainland authorities to keep their word on RMB stability.