วันศุกร์ที่ 25 กุมภาพันธ์ พ.ศ. 2554

Feb11 RTRS-Reuters Summit-West can look to Asia to see future of tougher regulations

By Rachel Armstrong

SINGAPORE, Feb 25 (Reuters) - Regulators in the United States and Europe have learned some hard lessons from the global financial crisis and should now look to Asia to see how many of their new tougher rules governing financial markets will work out.

A lot of regulations under consideration in the developed world to rein in the excessive risk-taking of banks blamed in part for the global financial crisis are already in place in Asia, which came through the crisis relatively unscathed.

The new buzzwords attached to western countries' regulatory proposals include macroprudential lending controls and counter-cyclical credit buffers, but these are tools most Asian financial centres adopted in the wake of the region's own financial crisis in 1997.

"In all sorts of areas, the Asian markets haven't had the same problems the U.S. and European markets had and that in part is because of some of the changes which were made 12 years ago after the Asia crisis," said Martin Wheatley, chief executive of Hong Kong's Securities and Futures Commission.

Asian-style regulation includes tougher capital standards for banks, lending controls such as limiting loan-to-value ratios for mortgages and caps on debt servicing.

In the buildup to the global crisis, there were no caps imposed by regulators in western Europe or the United States on loans for houses. Some banks even loaned out amounts that exceeded the value of the house in question.

In comparison, many Asian countries have upper limits for home loans. Hong Kong, for example, caps mortgages at a maximum of 70 percent of the value of the home and lower for more expensive properties.


The tough approach taken by Asian regulators in recent years to control domestic banks is likely to be extended to the regional operations of overseas banks, lawyers and former regulators said.

"Now, Asian regulators will no longer look at the famous western names as a Godsend, instead they'll see them as a potential liability and the upshot is they'll make sure they're treated as tough as local banks," said Simon Topping, former director of banking policy at the Hong Kong Monetary Authority and now a partner at accountancy firm KPMG.

Many European and U.S. banks are likely to look to growth in Asia to make up for the sluggish performance of developed economies.

The huge array of new rules and regulations dished out by their home regulators may, if nothing else, give hope they could get an easier ride in Asia.

Instead, banks with full-blown banking operations in Asia such as Standard Chartered and Citigroup could face higher capital requirements than in their home jurisdictions.

"The UK may say one of its banking groups needs to have an 11 percent capital base and try to impose that around the world, but if a host regulator thinks its subsidiary needs 12 or 13 percent, it'll say 12 or 13," said Topping.

International banks that currently operate in the region through branch networks may be forced by some regulators to set-up subsidiary companies instead so they can be subject to more intense supervision.

"The model of requiring foreign banks to become locally-incorporated subsidiaries will be debated more and more within Asia," said Thirachai Phuvanatnaranubala, secretary general of Thailand's Securities and Exchange Commission.


Although Asia's financial sector came through the global financial crisis largely unscathed, regulators can't take all the credit.

Many countries in the region lacked the complex financial instruments, securitisation and lending practices seen in the United States and Europe that triggered the crisis.

Simpler markets don't mean they can't offer valuable lessons.

The resilience of the globally interconnected financial centres such as Hong Kong and Singapore is in large part down to regulators' ability to balance a light touch on financial markets with a stronger one in the local banking system.

"These centres did a better job than the UK and U.S. at putting a separation between a tightly controlled and tightly supervised domestic banking system and their function as a global financial centre," said Nicolas Veron, a senior fellow at Brussels- based think tank Bruegel, which specialises in financial regulation.

"The UK in particular wasn't able to separate regulation of the City of London from the domestic banking system. They're now looking for a new model and should at least reflect on the systems in Hong Kong and Singapore," said Veron.

British policymakers are unlikely to explicitly adopt another country's regulatory model. But they have lured Wheatley back from Hong Kong's SFC to oversee the establishment of its new consumer and markets regulator.

Wheatley is British and has experience as deputy CEO at the London Stock Exchange. But his record in Hong Kong means he is one of the few regulators whose reputation has improved in the past three years.

He said it's far too early to say what major changes he'll try to implement when he moves back to London. But one of his first tasks may be to deal with the unintended consequences of the changes pushed through by overseas regulators, he said.

"There are some big, big decisions being made very quickly at the moment and that's inevitably going to create some market anomalies which we're going to have to correct," he said.

And this is the fear shared by many in Asia. For while many Asian countries are plagued by reams of red tape in some areas of regulation, their big-picture macroprudential policies are surprisingly simple.

The worry is that regulators in the United States and Europe may over react following the global financial crisis.

"I think re-regulation as it's happening in the West tends to create conditions for financial fragmentation and not financial integration, so the more you regulate systems the more barriers there will be to cross-border activity, and a less cohesive approach to deal with future problems," Veron said.

(Editing by Neil Fullick) ((rachel.armstrong@thomsonreuters.com)(+65 68703835)(Reuters Messaging: rachel.armstrong.thomsonreuters.com@reuters.net))


SE Asian bourses years away from M&As -Thai regulator

Wed, Feb 23 2011
* Electronic trading link only likely option now - regulator
* Says bourse consolidation needs straightening legal system
* Mounting competition to fuel improvement in bourses

By Rachel Armstrong

SINGAPORE, Feb 23 (Reuters) - Most of South East Asia's stock exchanges are several years away from getting involved in the global wave of bourse consolidation, the head of Thailand's market regulator said.

Exchanges in Malaysia, the Philippines, Singapore, Vietnam, Indonesia and Thailand are setting up electronic trading links between their markets with the eventual aim of having cross-border dealing in all their listed shares.

But the ownership structures of these bourses -- with the exception of Singapore -- means that going any further than this and looking at full-blown M&A deals is currently not an option.

"Right now the only linkage is through the electronic means of this project, and that is the only likely option for now," Thirachai Phuvanatnaranubala, Secretary General of Thailand's Securities and Exchange Commission, told Reuters in a phone interview on Wednesday.

Deutsche Boerse bid for NYSE Euronext and Singapore Exchange's move for Australia's ASX have prompted talk that the major global exchanges market could soon be cut to just two or three big players.

This would leave question marks over the future of smaller exchanges such as those in Southeast Asia.

"How the exchanges in Asia and ASEAN can take advantage of this trend or not is quite difficult to say at this stage," said Phuvanatnaranubala.

Several exchanges in Southeast Asia are still largely controlled by governments and members so would probably need to demutualise before any deals could happen.

"I think the development is still in early stages in Asia and the ASEAN exchanges especially are still at the stage whereby we need to straighten out our legal system," said Phuvanatnaranubala.

"But obviously after that stage is over in the next few years then the people involved will have to think hard as to their future strategy," he said.

However, mounting competitive pressure would encourage the region's exchanges to improve their efficiency, he said.

"My feeling is that the more we let them compete the more we get rid of the hindrances and the faster they have to adapt and become leaner."

(Editing by Vinu Pilakkott)

((rachel.armstrong@thomsonreuters.com)(+65 68703835)(Reuters Messaging: rachel.armstrong.thomsonreuters.com@reuters.net)) Keywords: EXCHANGES THAI/

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วันจันทร์ที่ 14 กุมภาพันธ์ พ.ศ. 2554

Thailand to Allow New Stock Exchanges, Regulator Says

Thailand will allow new securities exchanges to compete with the state-controlled bourse to lower the cost of raising capital for domestic companies, the Securities and Exchange Commission said.
A law is being drafted to end the Stock Exchange of Thailand’s monopoly on equities and financial derivatives trading, the commission’s Secretary-General Thirachai Phuvanatnaranubala said in an interview in Bangkok yesterday. The exchange said it needs to prepare for increased competition.

The government has pushed the bourse that was founded in 1975 to become profit-oriented and lower share-trading fees to increase its attraction to overseas investors. The exchange plans to sell shares in an initial public offering next year to raise funds for expansion and to compete with regional rivals.

“Thailand will have wide-open competition in operating of stock exchanges,” Thirachai said. “New exchanges will allow companies other ways to raise funds, probably at lower cost.”
New entrants will likely specialize in securities focused on particular industries or companies like the technology-heavy Nasdaq Stock Market in the U.S., he said.

The Stock Exchange of Thailand more than doubled its profit to 456.6 million baht ($14.8 million) in 2009 from 205.5 million baht a year earlier as it cut costs, according to the bourse’s latest financial statements on its website.

'Enhance Efficiency'

“We need to markedly enhance efficiency, strengthen our franchise and expand our customer base to prepare for competition,” Veerathai Santiprabhob, the Stock Exchange of Thailand’s chief strategy officer, said in a mobile-phone text message in response to Bloomberg’s questions.

Brokerages in Thailand have been allowed by the regulator to reduce fees for some stock trades since 2010. Brokerages are able to charge commission of less than 0.25 percent on daily trades of at least 5 million baht.

Exchanges in the Association of Southeast Asian Nations, or Asean, plan to develop cross-border trading links as part of a plan to make the markets more accessible and spur trading. Malaysia and Thailand will start cross-trading of shares by year-end, while Singapore and the Philippines will be next to join, Yusli Mohamed Yusoff, chief executive officer of Bursa Malaysia Bhd., operator of the Malaysian bourse, said Jan. 18.

‘Urgent Need’

“Bourses in the region have seen the urgent need to increase cooperation before slipping off investors’ radar screens,” Thirachai. “The cooperation will probably deepen to a point where those bourses decide to have mutual equity investments among them.”

Alliances among Asian bourses would reflect increased mergers and acquisitions worldwide, including London Stock Exchange Group Plc’s Feb. 9 agreement to buy the owner of the Toronto Stock Exchange for about $3.2 billion in stock. Deutsche Boerse AG and NYSE Euronext are “in advanced discussions regarding a potential business combination,” they said in a statement Feb. 9.

Hong Kong Exchanges & Clearing Ltd. is open to mergers, Lorraine Chan, a spokeswoman for the exchange, said yesterday. Shares of ASX Ltd. rose 4.7 percent yesterday, the most since Singapore Exchange Ltd. agreed to buy the Sydney-based operator of Australia’s exchanges for A$8.35 billion ($8.4 billion) in October.

The benchmark SET Index has dropped 8.1 percent this year, Asia’s fourth-worst performer, after surging 41 percent in 2010. The gauge slid 3.6 percent this week, its worst weekly performance since the period ended May 28.