Working Group B : Cross-border Offerings of CIS and Debt Securities

Transcription

1 Agenda Item 4.2 Working Group B : Cross-border Offerings of CIS and Debt Securities Progress Update and Issues for Considerations 13 th ACMF Meeting 21 October

2 Background SEC Thailand leads working group B: Cross-border Offering of Products and Services under Mutual Recognition Regime Focus on CIS and debt securities H1 2010, 2 questionnaires to map regulations Responses from 5 members: Indonesia, Malaysia, Philippines, Singapore and Thailand 2

3 Agreed Timeframe Cross-border offerings 1. Non-retail investors (NRI) H1 H2 H1 H2 1.1 Plain 1.2 Complex 2. Retail investors (RI) 2.1 Plain 2.2 Complex 3

4 Cross-border offerings of CIS 4

5 Outline CIS framework Requirements for offers made to either NRI or general public Which types of CIS are to be allowed? What is the requirement on home regulator? Additional requirements for offers made to general public ASEAN UCITS Next steps 5

6 Which types of CIS are to be allowed? CIS must be: ASEAN locally constituted & regulated (exclude recognized & unregulated schemes) also offered to respective types of local investors For offers either to NRI or general public, issued & managed by regulated CIS operator 6

7 What is the requirement on Home Regulator? In compliance with IOSCO s principles on CIS Considering result of: FSAP / IOSCO s assisted self assessment ( broadly implemented ) For offers either to NRI or general public, IMF s assessment Peer review 7

8 Additional requirements for offerings made to general public Mechanism to ensure regulatory equivalence prevent regulatory arbitrage ensure comparable investor protection WG B will discuss further CIS issued in compliance with ASEAN UCITS 8

9 ASEAN UCITS ASEAN UCITS Agreed set of rules on: product restrictions disclosure requirements If ASEAN-UCITS compliant : can be offered to general public without reauthorization by host regulator 9

10 ASEAN-UCITS compliant CIS Product restrictions: Types of eligible assets Investment restrictions, such as Company limit Group limit Unlisted securities limit Leverage limit OTC derivatives counterparty limit 10

11 ASEAN-UCITS compliant CIS Information disclosure adoption of Key Information Document (KID) concise, pre-defined, easily understood, and comparable format Info in KID: - investment objectives & policies - past performance - risk / reward profile - fees - other practical information 11

12 Next steps Conclude details on requirements for offering to NRI by Q Conclude definition of plain vs. complex funds by Q Concurrently explore ASEAN UCITS requirements to be launched by H

13 Cross-border offerings of debt securities 13

14 Offering of debt securities to non-retail investors (NRI) All members should have a light touch or exemption regime for cross-border offering to NRI by

15 Offering of debt securities to general public ASEAN and Plus Standards All members should adopt the use of ASEAN and Plus standards for multi-jurisdictional offerings by H Member should try to reduce number of its Pluses Should the use of ASEAN and Plus be extended to all foreign debt offerings (not just multi-jurisdiction offerings) by H1 2012? 15

16 Offering of debt securities to general public Registration process To leverage the work on MR prospectus by WG A Accounting standards All members should allow the use of IFRS by foreign issuers by

17 Credit rating There are significant differences in rating requirements among ACMF members Singapore: not require ratings MY, TH: allow international credit rating agencies (inter CRA) under certain circumstances Philippines: allow inter CRA when open branch + obtain license Indonesia: allows only local CRAs no work shall be done by WG B in this area 17

18 Recognized international CRAs Recognized inter CRA SG TH MY PH * IN Multilateral Agencies Yes Yes Yes No No Other Foreign Issuers Yes Yes Yes No No Subsidiary of Foreign Parent Yes Yes Yes No No Domestic Issuer where part of the issue is sold offshore simultaneously Domestic Issuer where sale is to domestic investors Yes Yes No No No Yes No No No No Note: * International CRA is recognized provided that it opens a branch / regional headquarter and acquire a license from the SEC Philippines Source : S&P 18

19 Complex products offering to general public Should the ASEAN disclosure standards for disclosure of complex products be developed? If yes, in 2 phases Phase I Develop a scheme to accommodate offering made under a debt program (shelf registration) by H Phase II Develop a scheme to accommodate derivative embedded securities by..? 19

20 Next Steps debt securities 1. WG B to develop definitions of plain and complex products by Q Members who do not have NRI regime should develop one by Members who did not adopt ASEAN and Plus standards for multijurisdictional offerings of debt securities should do so by H If ACMF agrees, members should adopt ASEAN and Plus to cover all foreign debt offerings by H If ACMF agrees, WG B to develop ASEAN disclosure standards for complex products a scheme to accommodate offering made under a debt program (shelf registration) by H Members who do not allow the use of IFRS by foreign issuers should do so by

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