NO 247 – SEPTEMBER 2013

WFE Focus

BCBS and IOSCO publish final report on margin requirements for non-centrally cleared derivatives

On 2 September 2013, the Basel Committee on Banking Supervision and IOSCO released the final framework for margin requirements for non-centrally cleared derivatives. Under the globally agreed standards, all financial firms and systemically important non-financial entities that engage in non-centrally cleared derivatives will have to exchange initial and variation margin commensurate with the counterparty risks arising from such transactions. The framework has been designed to reduce systemic risks related to OTC derivatives markets, as well as to provide firms with appropriate incentives for central clearing while managing the overall liquidity impact of the requirements.

European Parliament endorses market abuse regulation

On 10 September 2013, the European Parliament voted to formally endorse the political agreement on a Regulation on insider dealing and market manipulation to tackle market abuse more effectively, subject to alignment with the final political agreement on MiFID II. This regulation updates and strengthens the existing framework to ensure market integrity and investor protection provided by the Market Abuse Directive. The new framework will ensure regulation keeps pace with market developments. It will strengthen the fight against market abuse across commodity and related derivative markets, explicitly ban the manipulation of benchmarks, such as LIBOR, and reinforce the investigative and sanctioning powers of regulators.

Hong Kong Exchanges publish guidance for long suspended companies

The Stock Exchange of Hong Kong issued a guidance letter for long suspended companies. The letter sets out the current practice and rationale for the continued suspension of companies and discusses the criteria for resumption of these long suspended companies.

In conjunction with the guidance letter, the Exchange has also revised its monthly prolonged suspension status report to summarize, for each long suspended company, the conditions imposed by the Exchange for resumption, major developments and outstanding issues.

Hong Kong Exchanges publishes new listing rules regulation procedure

The Stock Exchange of Hong Kong published a new statement on its approach to enforcement of its Listing Rules, and implemented new procedures for disciplinary matters involving breaches of the listing rules.

Singapore Exchange introduces new rules for mineral, oil and gas companies

The Singapore Exchange introduced new Mainboard admission rules and continuing listing obligations for mineral, oil and gas companies. They set the admission standards applicable to the listing of these companies that are not yet in production and introduce continuing listing requirements that cater to the specific characteristics of these companies. With the new rules, a wider spectrum of mineral, oil and gas companies can tap into Asia’s vast pool of liquidity via SGX. Investors will also have more choices of investing in this sector.

Stock Exchange of Thailand shortens IPO schedule to speed up listing process

On 9 September 2013, the Stock Exchange of Thailand shortened the IPO time frame to enable IPO shares to trade on the exchange within three working days after the subscription date ends, down from the previous four working days, to reduce risks for stockholders. In addition, releasing news about an impending IPO will be one day prior to the first trading day, down from the previous timing of two days before the first trade.