THE APEC EXPERIENCE IN FINANCIAL

INTEGRATION

AND

LINKS TO THE PACIFIC ALLIANCE

PACIFIC ALLIANCE

CAPITAL MARKETS SEMINAR

IFC- LIMA 23- 24 JULY 2018

JULIUS CAESAR PARREÑAS, PH.D.

COORDINATOR, ASIA-PACIFIC FINANCIAL FORUM

SENIOR ADVISOR, MIZUHO BANK, LTD.

THE APEC FINANCE MINISTERS’ PROCESS FMP

APEC Finance and

Development Institute

Disaster Risk Finance

Solutions Working

Group

APEC PPP Experts

Advisory Panel

Asia-Pacific Infrastructure

Partnership (APIP)

Asia-Pacific Financial

Forum (APFF)

Asia-Pacific Forum on Financial Inclusion

APEC Financial

Institutions Dealing with

SMEs

Financial Regulators

Training Initiative

Managed by ABAC

21 APEC Finance Ministries Advisory Functions: ADB, IMF, OECD, WBG, ABAC

Finance Ministers Heads of Delegation of International

Organizations and ABAC

Deputy Finance Ministers/Deputy CB Governors Representatives of International Organizations

and ABAC

Senior Finance Officials Representatives of International

Organizations and ABAC

FMP Policy Initiatives

THE ASIA-PACIFIC FINANCIAL FORUM - STRUCTURE APEC Finance Ministers Process (FMP)

APEC Business Advisory Council (ABAC)

Asia-Pacific

Financial Forum

(APFF)

Financial Infrastructure Development

Network

Insurance / Retirement

Income

Capital Markets

Financial Market

Infrastructure

Trade / Supply Chain Finance

Asia Region Funds Passport

Classic repo markets

Long-Term Investment/Islamic

finance

Innovative Health Financing

APFF Work Streams

Microinsurance

Disaster Risk Financing

Insolvency

Accounts

Receivables Finance

Credit Information

Secured Transactions

Regulation and Accounting

Retirement Income

Accounts/Tax/ Investor ID / Transparency

Repo/Securities Lending

Derivatives

Data management/ Technology

Post-Trade Ecosystem

Fund Services

Data Ecosystem

Central banks

Securities, banking, insurance regulators

International regulatory organizations

Securities industry

Banking (general, trade finance, secured lending, factoring)

Insurance and Pensions

Asset management

Business and consumer credit information

Chambers of commerce

THE ASIA-PACIFIC FINANCIAL FORUM - NETWORK

Firms

Investment / commercial banks

Insurers and pension funds

Non-bank lenders

Asset managers

Law, accounting, consultancy firms

Corporates

Credit rating agencies

Credit bureaus

International / domestic industry

associations

Government agencies

Finance ministries

Justice ministries

Trade ministries

Development assistance agencies

Foreign affairs ministries

Regulatory bodies

International organizations

ADB

BIS

IMF

OECD

World Bank/IFC

UNCITRAL

Academic / research

institutions

Over 400 individual experts Over 200 organizations

THE ASIA-PACIFIC FINANCIAL FORUM - LEADERSHIP

CAPITAL MARKETS

Classic Repo

• Sherpa: Mark Austen, ASIFMA

Asia Region Funds Passport

• Co-Sherpas: Amy Ang, EY * Armin Choksey, PwC * Andrew Clements, KWM

FINANCIAL MARKET INFRASTRUCTURE Post-Trade Ecosystem • Sherpa: TBC

Accounts/Tax/Investor ID/Transparency • Sherpa: TBC, ASEAN+3 Bond Market Forum

Repo/Lending • Sherpa: TBC, ASIFMA

Derivatives • Sherpa: Rishi Kapoor, ISDA

Fund Services • Sherpa: TBC, Asia Fund Standardization Forum

FMI Fintech • Sherpa: Catherine Simmons, Citi *

• Core Group: * Suu Wei Ho, PayPal * Matthew Gamser, IFC/WBG * Ivan

Mortimer-Schutz, IFC/WBG * Boon-Hiong Chan, Deutsche Bank * Quynh Do

Nuh, Visa * Peter Lovelock, TRPC * Laura Winwood, TRPC

TRADE AND SUPPLY CHAIN FINANCE • Sherpa: Boon-Hiong Chan, Deutsche Bank

INSURANCE AND RETIREMENT INCOME

Overall Sherpa: Makoto Okubo, Nippon Life

• Vice Sherpa: Paul Lynch, Prudential

Regulation and Accounting

• Sherpa: Makoto Okubo, Nippon Life

Long-Term Investment

• Sherpa: Brian Murray, AIA

Retirement Income

• Co-Sherpas: Vanessa Wang, Amundi * Josef Pilger, EY* Ka Shi Lau, BCT Group

Disaster Risk Financing and Insurance

• Sherpa: Masaaki Nagamura, Tokio Marine

Microinsurance

• Co-Sherpas: Antonis Malagardis /Dante Portula, GIZ

FINANCIAL INFRASTRUCTURE DEVELOPMENT NETWORK

Credit Information

• Sherpas: Michael Turner/Patrick Walker, PERC * Jinchang Lai, IFC/WBG

Secured Transactions

• Sherpas: Chris Wohlert, Wells Fargo * Jinchang Lai, IFC/WBG

Insolvency

• Sherpas: Shinjiro Takagi, Jinchang Lai, IFC/WBG

Accounts Receivables Finance

• Sherpas: Boon-Hiong Chan, Deutsche Bank * Jinchang Lai, IFC/WBG

Valuation

• Sherpas: Nicholas Brooke, IVSC * James Kojima, IVSC

ASIA-PACIFIC FINANCIAL FORUM (APFF) Chair: Kobsak Duangdee, ABAC Thailand / Thai Bankers’ Association

Co-Chair: Nobuhide Hayashi, ABAC Japan / Mizuho Bank, Ltd.

Coordinator: J.C. Parrenas, Mizuho Bank, Ltd.

FIN

AN

CIA

L IN

TEG

RA

TIO

N

•Financing MSMEs

•Financial inclusion / literacy

•Facilitating remittances

•Financial services liberalization

•Capital accounts liberalization

•Asia Region Funds Passport

FISC

AL

TR

AN

SPA

REN

CY

•Fiscal reforms

•Open Data Initiative

•Exchange of financial account information

•Base erosion profit shifting

•Tax and crime

FIN

AN

CIA

L R

ESIL

IEN

CE •Macroeconomic

policy

•Disaster risk financing and insurance

•Capital market development

INFR

AST

5R

UC

TU

RE •Knowledge portal

•Standardization of terms and practices

•Maximizing PPPs in infrastructure investment

•Long-term investors

•Urban development

•Regional connectivity

THE CEBU ACTION PLAN (2015-2025):

A TEN-YEAR ROADMAP FOR THE APEC FINANCE MINISTERS’ PROCESS

FOUR PILLARS

STOCKTAKE (2015-2018)

Achievements (2015-2018):

Helped initiate legal,

regulatory and institutional

reforms in several economies

Developed and provided

critical support to regional

initiatives

Laid the groundwork for

structural reforms (roadmaps,

work programs, dialogue

platforms)

REGIONAL

MSME Finance

• 2016, Mekong region: Pilot project

for cross-border exchange of

credit reports initiated (now

ongoing)

Capital markets

• 2015: Rules adjustment enabling

Japan to join Asia Region Funds

Passport (ARFP)

• 2016：APFF study on tax

implications of ARFP helps

accelerate signing of MOC

• 2017: Successful and smooth

mandatory exchange of variation

margin for non-cleared OTC

derivatives

• 2017: Improvements in IFRS17

rules on OCI and CSM

CHINA

• 2016: Start of capacity building to help design new Civil

Code chapters on secured transactions and insolvency

THAILAND

MSME Finance

• 2017: New legislation to broaden scope of assets used as

collateral

VIETNAM

• 2015: Initial steps to build credit information system

(ongoing)

• 2017: New legislation to broaden scope of assets used as

collateral PHILIPPINES

MSME Finance

• 2015: Official FIDN working group established

• 2015-2017: Various steps to build credit

information system

• 2018: New secured transactions bill passed

• 2017: New Warehouse Receipts bill filed

Capital markets

• 2015: Stakeholders agree to enable title-

transfer repo

BRUNEI DARUSSALAM

• 2017: Signed law on secured transactions

• 2017: Initial steps to build credit information system

(ongoing)

STOCKTAKE: Key Achievements (so far)

• 2015: Initiated Islamic Infrastructure Investment

Platform

• 2017: Roadmap for Financial Market Infrastructure

• 2017: Roadmap for Microinsurance

• 2018: Roadmap for New Financial Services Data

Ecosystem

• 2018: Strategy for Digitalization of Trade and

Supply Chain Finance

• 2018: Essential Elements of an Effective Personal

Insolvency Regime

STOCKTAKE: Laying the Groundwork for Structural Reforms

Source: Deutsche Bank, flow (October 2017),

page 18.

http://cib.db.com/insights-and-

initiatives/flow-e-magazine-october-

2017.htm?page=12#gsc.tab=0

KEY FACTORS IMPACTING FINANCE As seen y Deuts he Bank’s flow magazine APFF (Asia-Pacific Financial Forum) Basel III

OECD BEPS (Base Erosion Profit Shifting)

EU AMLD/FTR (Anti-Money Laundering

Directive/Funds Transfer Regulation)

CPMI-IOSCO (Committee on Payments and Market

Infrastructures of the International Organization of

Securities Commissions)

Legal Identity Identifier

EU AIFMD UCITS V (Alternative Investment Fund

Managers Directive / Undertakings for Collective

Investment in Transferable Securities 5th version)

EU Capital Markets Union

EU Recovery and Resolution Directive

EU Shareholder Rights Directive

EU General Data Protection Regulation

EU MiFID II (Markets in Financial Instruments

Directive, Version 2)

EU PSD2 (Payment Services Directive 2(

EU SFTR (Securities Financing Transaction

Regulation)

EU SLL (Securities Law Legislation)

EU T2S (TARGET2 – Securities)

EMIR (European Market Infrastructure Regulation)

EU FTT (Financial Transaction Tax)

EU CSDR (Central Securities Depositories

Regulation)

Benchmarks

Banking separation

US FBAR (Report of Foreign Bank and Financial

Accounts)

US SCCL (Single Counterparty Credit Limits)

US SSC (T+2) (Shortening the Settlement Cycle

toward T+2)

Correspondent banking de-risking

MD APAC/MENA (Market developments in the

Asia-Pacific, Middle East and North Africa regions)

THE IMPACT OF APFF AS VIEWED WITHIN

THE INDUSTRY Creating additional usiness

opportunities a ross the orporate, insurance, institutional, investment

manager, broker dealer, global

custodian, and infrastructure sectors

CONNECTIVITY and INTER-OPERABILITY

• Financial Market Infrastructure

• Funds Passport Regimes

• Trade and Supply Chain Finance

• Data ecosystem

• Long-term infrastructure investment

LINKING BOTH SIDES OF THE PACIFIC OPPORTUNITIES:

Need More Information?

Contact:

Dr. Julius Caesar Parreñas

Coordinator, Asia-Pacific Infrastructure Partnership / Asia-Pacific Financial Forum

Senior Advisor, Mizuho Bank, Ltd

1-5-5, Otemachi, Chiyoda-ku, Tokyo 100-8176, Japan

+81-3-5224-2601 caesar.parrenas@mizuho-bk.co.jp

For information on APFF, please visit:

https://www2.abaconline.org//page-content/22613276/Asia-Pacific%20Financial%20Forum