Sunday 23rd November 2014
NEWS TICKER – FRIDAY NOVEMBER 21ST 2014: The director of the National Security Agency, Navy Admiral Michael Rogers, says he expects to see adversaries launch a cyber-attack in the next few years aimed at severely damaging America's critical infrastructure. "I fully expect that during my time as commander, we're going to be tasked to help defend critical infrastructure within the United States because it is under attack by some foreign nation or some individual or group," Rogers told the House Select Committee on Intelligence this morning (EST). Rogers, who also serves as commander of the US Cyber Command, says the government is better prepared to defend against those attacks than it was two years ago.On November 24th, the Federal Reserve will conduct a fixed-rate offering of term deposits through its Term Deposit Facility (TDF) that will incorporate an early withdrawal feature. This feature will allow depository institutions to obtain a return of funds prior to the maturity date subject to an early withdrawal penalty. The Federal Reserve will offer eight-day term deposits with an interest rate of 0.29000% and a maximum tender amount of $20,000,000,000. The penalty for early withdrawal is 0.75%, the minimum tender per institution is $20,000,000,000 - The Straits Times Index (STI) ended +29.72 points higher or +0.90% to 3345.32, taking the year-to-date performance to +5.70%. The FTSE ST Mid Cap Index gained +0.64% while the FTSE ST Small Cap Index gained +0.83%. The top active stocks were SingTel (+0.51%), UOB (+1.37%), DBS (+1.64%), Keppel Corp (+0.22%) and OCBC Bank (+1.16%). The outperforming sectors today were represented by the FTSE ST Basic Materials Index (+1.70%). The two biggest stocks of the FTSE ST Basic Materials Index are Midas Holdings (+1.72%) and Geo Energy Resources (+3.02%). The underperforming sector was the FTSE ST Technology Index, which gained +0.16% with Silverlake Axis’s share price gaining 0.41% and STATS ChipPAC’s share price unchanged. The three most active Exchange Traded Funds (ETFs) by value were the IS MSCI India (+1.70%), SPDR Gold Shares (+0.34%), DBXT MSCI Singapore IM ETF (unchanged). The most active Real Estate Investment Trusts (REITs) by value were Suntec REIT (unchanged), Ascendas REIT (unchanged), CapitaCom Trust (+0.89%) - In an interview with US online service Careers Info-Security News Greg Shannon, chief scientist at the CERT Division of Carnegie Mellon University's Software Engineering Institute says that to defeat cyber-adversaries, cybersecurity professionals should adopt a contrarian attitude, says. "Having that contrarian point of view allows you to get into the mindset of the adversary," Shannon says in an interview with Information Security Media Group. "How would this technology work if it did something the designer of it didn't think of?" he asks. "Certainly, that's the way the adversary is thinking, coming up with new attacks, new threats. They're looking at an app, a piece of software or some websites, [and they think] 'What can I do here that the designer didn't think of? Is there a way to get information through channels, through tricks that weren't anticipated? Is there some frailty of humans that I can exploit to get information out of them that they wouldn't normally give me?'" – Raiffeisen Bank International warned in an analyst conference call yesterday that profits in its Russian business would be challenged in Q4 versus Q3. The bank’s Chief Financial Officer Martin Gruell said higher risk provisioning and increased operating expenses could cut profits in its single most profitable market. "I would expect the fourth quarter to be a bit lower than the third quarter," he said. He believes the worst of the rouble's devaluation is over, but explained that the impact on the group’s capital from the dip in the ruble, could push RBI's core capital below 10% of risk-weighted assets by the end of this year - The performance of the Dutch residential mortgage-backed securities (RMBS) market remained stable during the three-month period ended September 2014, according to the latest indices published by Moody's Investors Service. The 60+ day delinquencies of Dutch RMBS, including Dutch mortgage loans benefitting from a Nationale Hypotheek Garantie, decreased to 0.95% in September 2014 from 0.98% in June 2014. At the same time, the 90+ day delinquencies decreased to 0.72% during the three-month period compared with 0.75% in June 2014. Cumulative defaults continued to increase to 0.54% of the original balance, plus additions (in the case of Master Issuers) and replenishments in September 2014, compared with 0.47% in June 2014, says the ratings agency. Cumulative losses slightly increased to 0.11% in September 2014 from 0.10% in June 2014 – According to a Clearstream client bulletin on November 18th, the US Internal Revenue Service and the US Treasury published an amendment to the current temporary regulations (TD9657) regarding FATCA. The amendment impacts Foreign Financial Institutions (FFIs) who have entered into an agreement with the IRS to become a participating FFI. It amends the determination date and timing for reporting with respect to the 2014 calendar year.

IOSCO publishes a report on institutional investors in emerging markets

Thursday, 14 June 2012
IOSCO publishes a report on institutional investors in emerging markets The International Organisation of Securities Commissions (IOSCO) has published  a report on Development and Regulation of Institutional Investors in Emerging Markets, which focuses on a wide range of developmental issues and challenges faced by emerging markets seeking to develop their institutional investor base. Some of these challenges include limited capital market size and liquidity, competition to capital market investment from substitute services, regulatory restrictions, overly dominant distribution channels and constraints on cross-border activities. Additional discussions on related macro-economic and capital market conditions in the emerging markets and analysis of cross-border activities of institutional investors are also included in the report.     http://www.ftseglobalmarkets.com/

The International Organisation of Securities Commissions (IOSCO) has published  a report on Development and Regulation of Institutional Investors in Emerging Markets, which focuses on a wide range of developmental issues and challenges faced by emerging markets seeking to develop their institutional investor base. Some of these challenges include limited capital market size and liquidity, competition to capital market investment from substitute services, regulatory restrictions, overly dominant distribution channels and constraints on cross-border activities. Additional discussions on related macro-economic and capital market conditions in the emerging markets and analysis of cross-border activities of institutional investors are also included in the report.

 

 

The report offers a set of key recommendations for policy makers and regulators looking to attract and better regulate institutional investors in their jurisdictions.  It highlights the importance of the legal protection of property and ownership rights. It also emphasizes the need to ensure reasonable transaction costs, develop flexible trading and hedging mechanisms, remove undue administrative impediments on product authorization processes, build a multi-pillar pension system with tax incentives and provide a level playing field for foreign investors. Finally, the report recommends that regulators periodically review the regulatory framework and coverage, combine deregulation with enhanced supervision and enforcement, and improve coordination with other regulatory bodies to monitor, mitigate and manage systemic risk.

The IOSCO Emerging Markets Committee (EMC) established a Project Team to review the development and regulation of institutional investors in Emerging Markets (EMs), to identify and analyze the issues and challenges for the development and regulation of institutional investors, and to make recommendations that EM regulators may consider as they supervise their respective markets. The Project Team



According to the report institutional investors are playing an increasingly important role in the development of EMs. Markets with large numbers of institutional investors tend to be less volatile and allocate resources and capital more efficiently to companies requiring funding. Highly specialized and managing substantial capital, institutional investors are better positioned to put pressure on corporations and their management to improve corporate governance and transparency. By pooling assets, institutional investors can achieve economies of scale, employ high quality investment professionals, develop better investment strategies and build solid risk management systems, all of which result in higher and more stable returns for investors, says IOSCO.

The report emphasises that in light of the challenges ahead, the development of institutional investors in the EMs calls for concerted efforts by both regulators and the market. It requires a pragmatic and sequenced approach by regulators to ensure that such efforts do not destabilise the financial system, and that adequate safeguards are established at both market and regulatory levels.

The report also contains a number of recommendations to help EM regulators and policy makers develop and regulate institutional investors; most of which are obvious. However, it is acknowledged that some frontier markets lack the appropriate financial markets infrastructure to sustain the evolution of sustainable capital markets and investment. We reproduce the key recommendations below.

Capital Market Environment. The foundation of a well-functioning capital market is the protection of property and ownership rights. In addition to a sound legal system, regulators need to promote proper corporate governance standards and other investor protection measures. A capital market that is favorable to institutional investors should have reasonable transaction costs (both explicit and implicit), a broad range of potentially high-quality investment products and flexible trading and hedging mechanisms.

Product Offering and Innovation. The authorisation process for new product issuance should be simple, fast and free of administrative obstacles. It should also be accompanied by strict post-issuance supervision and prompt regulatory actions when risks and violations occur. A multi-tier issuance regime could be used to lower issuance costs and broaden the product offering. Insofar as risks are manageable, regulators should support innovations that improve market efficiency or broaden investor-friendly product offerings.

Multi-pillar Pension System. The aging population is a major concern in many jurisdictions because it burdens the national pension and social security system. This burden could be shared by private pensions and personal savings plans. The development of a multi-pillar pension system, however, requires an appropriate set of tax incentives. Given that the financial performance of pension plans affects future pensioners’ standards of living, institutional investors in this market should be subject to higher prudential and professional standards.

Distribution Channels and Practices. Regulators should broaden the product distribution channels by increasing the type and number of distributors institutional investors can use. Regulators should introduce detailed rules for distribution practices and encourage Self Regulatory Organizations (SROs) to establish best practice standards on suitability, disclosure, marketing and fees.

Market Openness. Regulators should ensure a level playing field for foreign and domestic investors. Policy makers should gradually loosen or remove restrictions on fund repatriation and capital controls. Regulators should also break down barriers that prevent domestic investors from investing abroad.

Human Capital and Professional Integrity. Regulators and SROs should seek to improve the quality and availability of human capital by training and developing local talent and attracting professionals from other industries or overseas. The incentive structure should align the interests of the professionals with those of the investors. Sound licensing, record keeping and supervision systems should be established for industry professionals.

Regulatory Framework and Financial Stability. In accordance with the IOSCO Principles, regulators should prevent market abuse by building sound surveillance capacity and periodically reviewing their regulatory framework and coverage. Regulators should work together domestically and across jurisdictions, to monitor, mitigate and manage systemic risk.

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