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Page 1: COMPARATIVE ANALYSIS OF ASIAN SECURITIES REGULAORS …€¦ · 30.01.2017 · 7th COMPARATIVE ANALYSIS OF ASIAN SECURITIES REGULAORS ... (Regulations Act) (1956) (SCRA ... 4 India

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(Compiled as of 30 January, 2017)

7th COMPARATIVE ANALYSIS OF ASIAN SECURITIES REGULAORS & SROs

AND

MARKET CHARACTERISTICS

(Data and information provided by participating organizations in the 12th ASF Tokyo Round Table)

CONTENTS

I. Basic Organizational Features

I – 1. Organization Type, Statutory Basis

I – 2. Number of Staff, Funding Source and Number of Member Firms

II. Regulatory Framework of the Securities Markets of Each Country

III. Regulation & Self Regulation

III – 1. Major Rule Making Functions of each Organization

III – 2. Qualification System for Market Professionals

III – 3. Training System for Employees/Sales Representatives of Securities Companies

III – 4. Securities Firms Inspection or Audit

III – 5. Disciplinary Action and Measures Against Misconducts

III – 6. Dispute Resolution System between Securities Firms and Customers

III – 7. Investor Education Activities

IV. Market Structures

IV – 1. Breakdown of Financial Assets held by Household Account

IV – 2. Share of Foreign Investors in the Stock Trading on the Exchange

IV – 3. Share of Foreign Investors in the Bond Trading on Exchange/OTC Market

IV – 4. Settlement and Clearing Systems for Securities Transaction

IV – 5. Current Status of Off-Exchange Transaction (including PTS, ATS, MTF, etc.)

IV – 6. Share of On-line Trading

V. Safety Net for Investors Protection

VI. Challenges of Securities and Capital Market

V – 1. Major Recent Incidents and/or Challenges in Securities and Capital Markets as a Whole

V – 2. Specific Challenges in Equity Market

V – 3. Specific Challenges in Bond Market

V – 4. Specific Measures introduced / Implemented for the Securities Market

V – 5. Measures to Invite Foreign Investment (De-regulation, Promotion Activities, etc.)

The content herein is based on the feedbacks from each delegate of participating organizations in the 12th ASF Tokyo Round Table. Japan

Securities Dealers Association (JSDA) makes no representations as to, or guarantees, its accuracy or completeness.

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I. Basic Organizational Features

I – 1. Organization Type, Statutory Basis

No. Market Name of Organization Organization Type Statutory Basis

1 China Securities Association of China SAC SRO & Industry

Association

Established by Law

2 Hong Kong Hong Kong Securities Association HKSA Industry Association Established spontaneously in 1978, HKSA is the first

securities industry association in Hong Kong.

3 India 1 Association of National Exchanges

Members of India

ANMI Industry Association Established pursuant to the Companies Act 1956

4 India 2 Bombay Stock Exchange Broker Forum BBF Industry Association Registered as Societies under Society Act 1860 and

also registered under Charity Commissioner

5 Indonesia Association of Indonesian Securities

Companies

APEI Industry Association Spontaneously established

6 Japan Japan Securities Dealers Association JSDA SRO & Industry

Association

Established pursuant to Financial Instruments and

Exchange Act

7 Kazakhstan National Bank of Kazakhstan

NBK Government

Regulator

Established in accordance with Law

8 Korea Korea Financial Investment Association KOFIA SRO & Industry

Association

Established pursuant to Financial Investment

Services and Capital Markets Act (FSCMA)

9 Laos Lao Securities Commission Office LSCO Government

Regulator

Established by Securities Law

10 Mongolia Mongolian Association of Securities

Dealers

MASD SRO & Industry

Association

Established by Securities Market Law of Mongolia

11 Myanmar Securities and Exchange Commission of

Myanmar

SECM Government

Regulator

Securities Exchange Law, 2013

12 Nepal Securities Board of Nepal SEBON Government

Regulator

Established by Securities Act, 2006

13 Singapore Securities Association of Singapore SAS Industry Association

Spontaneously established

14 Sri Lanka Securities and Exchange Commission of

Sri Lanka

SECSL Government

Regulator

Established by The Securities and Exchange

Commission of Sri Lanka ACT No.36 of 1987 as

Amended by Act No. 26 of 1991, No. 18 of 2003

and No. 47 of 2009

15 Taiwan Taiwan Securities Association TSA SRO & Industry

Association

Established by or in accordance with Commercial

Group Act; Securities and Exchange Act

16 Thailand 1 Association of Thai Securities Companies ASCO Trade Association Established by Securities and Exchange Act of

1992 section 230-237

17 Thailand 2 Thai Bond Market Association ThaiBMA SRO & Industry

Association

Established by Securities and Exchange Act

B.E.2535

18 Turkey Turkish Capital Markets Association TCMA SRO It has been established in accordance with Article

75 of the Capital Market Law no. 6362

19 Vietnam1 Vietnam Association of Securities Business VASB Industry Association Decree No.45/2010/ND-CP dated April 21, 2010 of

the Government on the establishment, operation

and supervision of associations which is amended

and supplemented by Decree No.33/2012/ND-CP

dated April 13, 2012

20 Vietnam2 Vietnam Bond Market Association VBMA Industry Association Established according to Decree No. 45/2010/ND-

CP dated 21 April 2010 of the Government

21 Asian Region Asia Securities Industry and Financial

Markets Association

ASIFMA Industry Association Spontaneously established

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I –2. Number of Staff, Funding Source and Number of Member Firms

No. Market Name of

Organization

No. of Full Time

Staff

Funding Source Number of Member Firms (by Business Category)

1 China SAC 133 Membership Fee (As of the end of October 2015)

Securities Companies (128)

Securities Investment Consulting Institutions (83)

Sunshine Private Funds (261)

Direct Investment Subsidiaries of Securities Firms (59)

Asset Management Firms (15)

Credit Rating Institutions (7)

Fund Companies (65)

Trust Companies (30)

Futures Companies (58)

Financial Companies (32)

Commercial Banks (12)

Equity Investment Companies (131)

Special Members (Regional Associations, Stock Exchanges, Law

Firms, Accounting Firm, Overseas Securities Institutions with

Representative Offices in China and so on) (149)

2 Hong Kong HKSA 3 Membership Fee and

other sources (courses

& events organized by

HKSA)

Approximately 1,200 individual members who come from firms

carrying Securities Brokerage, Asset Management, Futures Contracts,

Corporate Finance and so on.

3 India 1 ANMI Region: 14

National Secretariat:

3

Membership Fee,

Sponsorship & events,

etc.

As of 30.9.2016, there are 793 members spreading four regions,

namely West, North, South and East. Each region has Regional

Council. About 793 Members on all India basis, comprising of

Market, Intermediaries Firms / Companies including foreign

institutional broking firms / companies.

4 India 2 BBF 7 1.Membership fees

2.Advertisement

income in the FORUM

VIEWS magazine

3.Training and Seminar

income.

As on 10th November 2016, the members in equity segment are 781

and those of commodity segment are 113, totaling 894 members.

Members are stock brokers of BSE, NSE, MCX

5 Indonesia APEI 5

Membership Fee,

SRO Sponsorship,

Training Course Fee

128 (113 Stock Exchange Member; 10 Investment Manager; 5 Non

Stock Exchange Member)

6 Japan JSDA 358 Membership Fee,

Fees for Examination

and Training Course

(As of October 1, 2016)

260 Regular Members consisting of securities companies including 11

overseas incorporated securities companies

211 Special Members consisting of 182 banks, 14 insurance

companies and 15 other financial institutions

3 Specified Business Members

7 Kazakhstan NBK 37 persons in the

Department of the

Securities Market

Supervision

Financed by own

budget - the Budget of

the National Bank of

Kazakhstan

As of the 1st September, 2015 there are 84 legal entities carrying out

their professional activity as a stock market operators, as follows:

- 46 broker/dealers;

- 22 investment portfolio managers;

- 10 custodians;

- 2 transfer-agents;

- 1 stock exchange;

- 1 clearing organization;

- 1 central depository

- 1 single registry.

34 banks, 32 insurance companies, single pension fund.

8 Korea KOFIA 230 Membership Fee

Examination fees for

financial certifications

and revenues from

textbook sales

(As of Oct. 31th)

200 Regular members which include securities firms, asset

management firms and futures firms, etc.

108 Associate members which include investment advisory business

entities, banks, insurance companies etc.

23 Special members which include general administration companies,

fund assessment companies, Korea Securities Depository, etc.

9 Laos LSCO 54 Government’s Budget LSCO is a national securities supervisory authority, having direct

responsibility to supervise, monitor and inspect securities activities to

ensure an efficient, fair and transparent capital market in Lao PDR. At

the present, there are four securities firms, a Lao Securities Exchange

(LSX), five issuing companies and three audit firms, a custodian bank

(approved by LSCO) under LSCO supervision.

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No. Market Name of

Organization

No. of Full Time

Staff

Funding Source Number of Member Firms (by Business Category)

Lao Securities Exchange (LSX) 1

securities firms 4

issuing companies 5

audit firms 4

custodian bank 1

credit rating agency 1

asset valuation company 1

10 Mongolia MASD 3 Membership Fee,

and other resourses

46 firms including one asset management company and 45 securities

firms out of which 17 have investment advisory licenses and 25 have

underwriting licenses in addition to securities brokerage and dealing

licenses.

11 Myanmar SECM 26 Government’s Budget

n/a

12 Nepal SEBON 52

(including Executive

Chairman)

(as of Sept.8, 2016)

Mmbership fee, and

Issue approval fee,

trading fee, etc.

(As of Sept.8, 2016)

Business Category Number

stock exchange 1

broker company 50

merchant banker 19

CDS company 1

depository participants 66

fund manager 7

credit rating agency 1

13 Singapore SAS 2 Membership fees,

training fees

15 member firms - 9 are local stockbroking firms, and 6

OTC/exchange-traded products providers.

14 Sri Lanka SECSL 79

(including 2 staff on

contract basis)

Membership fees,

broker licence fees,

administration levy ,

sale of publications,

seminar income for

educational

programmes

35 - licensed stock broking companies (28 for equity/debt, 7 debt

trading only)

34 - registered investment managers

32 - registered margin providers

9 - registered underwriters

1 - registered central depository system

2 - reegistered credit rating agencies

14 - managing companies of unit trusts

15 - stock dealers

15 Taiwan TSA 46 Membership fee, other

resources

TSA has 138 members consisting of securities firms and other financial

institutions operating securities businesses in Taiwan.

16 Thailand 1 ASCO 38 Membership Fee, Fees

from examination and

training course, Club

members

41 Regular Members consisting of securities companies. These

members include 16 foreign securities companies.

17 Thailand 2 ThaiBMA 54

(as of Sept.30,2016)

Membership fee, bond

registration fee,

information service fee,

training course fee

48 Ordinary Members consisted of 14 Thai commercial banks, 6

foreign commercial banks and 28 securities companies which have

debt trading license (Dealer).

4 Extraordinary Members are all securities companies which have

inter-dealer broker license (IDB).

1 Associate Member is a securities company which has monthly

average trading value in the past one year less than 100 million baht.

18 Turkey TCMA 29 Membership fee 75 brokerage firms, 41 banks, 52 portfolio management companies, 9

securities investment trusts, 31 real estate investment trusts and 8

venture capital investment trusts - total of 216. (as of November 2016)

19 Vietnam 1 VASB 5 Membership fee,

supportive funds,

operating revenues

from services

32 members:

- 28 securities firms

- 2 fund management companies

- 2 banks

20 Vietnam 2 VBMA 3 Membership fee, fees

collected from training

coursestraining fee,

data selling to vendors

58 members consisting of 35 banks, 10 securities firms, 5 fund

management companies, 6 insurance companies, 1 law firm and 1 audit

company (as of 30 November 2016)

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No. Market Name of

Organization

No. of Full Time

Staff

Funding Source Number of Member Firms (by Business Category)

21 Asian Region ASIFMA 21 Membership fee (As of 4 November 2016)

- 36 banks

- 39 non-banks

- 20 asset management (buy-side)

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II. Regulatory Framework of the Securities Markets of Each Country

No. Market Name of

Organization

Major Laws, Rules or Practice in the Securities Markets of Each Country

1 China SAC - Law of the People's Republic of China on Securities;

- Companies Law of the People’s Republic of China;

- Securities Investment Fund Law of the People's Republic of China;

- Interim Measures for Administration of Securities and Futures Investment Consultancy;

- Rules on Supervision over Securities Companies;

- Rules on Risk Disposal of Securities Companies;

- Securities Depository and Clearing Rules;

- Trading Rules of Shanghai Stock Exchange;

- Trading Rules of Shenzhen Stock Exchange.

2 Hong Kong HKSA - SFO (Securities and Futures Ordinance) with sub-sections

- Codes, regulations, guidelines by SFC (Securities & Futures Commission)

- Listing rules by Stock Exchange of Hong Kong.

3 India 1 ANMI - Securities and Contracts (Regulations Act) (1956) (SCRA);

- Securities and Exchange Board of India (SEBI) Regulations;

- Foreign Exchange Regulations;

- Indirect Tax;

- Income Tax;

- Companies Act;

- Local State Government Acts;

- Indian Stamp Act;

- Other relevant applicable Acts.

4 India 2 BBF 1.Securities Contract Regulation Act (SCRA);

2.Securities and Exchange Board of India Act (SEBI);

3.Companies Act;

4.Income Tax;

5.Other relevant acts.

5 Indonesia APEI - Capital Market Law Number 8 Year 1995 (UUPM);

- Financial Services Authority Law Number 21 Year 2011 (UUOJK).

Our Capital Market is regulated by the Indonesian Financial Services Authority (OJK). A body which was formed on

January the 1st 2013, it’s operation is funded from the State Budget and fee from parties who conduct their businesses in

the financial services sector. OJK is needed for:

ensuring that the overall activities within the financial services sector are implemented in an organized, fair,

transparent and accountable manner

promoting a financial system that has a sustainable and stable growth

protecting the interest of consumer in the financial market

Aside being supervised by OJK, we have to comply to rules and regulations from the following SRO’s (Self Regulating

Organization):

Indonesia Stock Exchange (IDX)

Indonesia Clearing and Guarantee Corporation (KPEI)

Indonesia Central Securities Depository (KSEI)

6 Japan JSDA Financial Instruments and Exchange Act (hereinafter referred to as the “FIEA”)

JSDA enforced more than 50 rules. (http://www.jsda.or.jp/en/rules/index.html)

JSDA’s rules are categorized as “rules relating to customer management and internal management by association

member”, “rules relating to employees and sales representatives of association members”, “rules relating to advertising”,

“rules relating personal information protection”, “code of ethics”, or “rules relating to stocks/bonds/foreign products/

securitized products/derivatives.

7 Kazakhstan NBK Laws “On National Bank of Kazakhstan”, “On securities market”, “On joint stock companies”, “On investment funds”,

“On banks and banking system in Kazakhstan”, etc.

8 Korea KOFIA Financial Investment Services and Capital Markets Act (Hereinafter referred to as the “FSCMA”)

9 Laos LSCO - Law on Securities, No.21/NA, Date: December 10, 2012;

- Deree on Securities and Securities Exchange;

- Decree on Organization and Operation of Lao Securities Commission;

- Decision on Organization and Operation of Lao Securities Commission Office;

- Regulation on Reporting;

- Regulation on Supervision of Share Trading on Internet;

- Regulation on Organization and Operation of Securities Companies;

- Regulation on Transfer of Share Registered in the Securities Exchange;

- Notice on Implementation of International Financial Reporting System (IFRS);

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No. Market Name of

Organization

Major Laws, Rules or Practice in the Securities Markets of Each Country

- Notice on Fundraising by Securities Issuance and Listing Abroad;

- Regulation on Inspection of Securities Activities;

- Regulation on Supervision of Securities Professional;

- Regulation on Reporting and Disclosure;

- Regulation on Custodian Banks;

- Decision on fees for Cross-Border Offer for Sale of Corporate Bond;

- Regulation on Corporate Bonds Issuance ;

- Regulation on Accounting and Auditing of Securities Activities (Amend);

- Regulation on Share Issuance (Amend);

- Regulation on Supervision of Securities Exchange (Amend);

- Regulation on Registration of Foreign Credit Rating Agencies;

- Regulation on Registration of Asset Management Company;

- Regulation on Representative Trading Account in Securities Exchange in Lao PDR;

- Regulation on Management of Share Trading of Foreign Investors in Lao PDR (Amend);

- Regulation on Provision of Additional Information relating to Sources of Registered Capital, Shareholder Structure

and Beneficiaries of Securities Companies;

- Regulation on Reporting and Disclosure for Securities Exchange;

- Regulation on Capital Adequacy of Securities Companies (Amend);

In summary, Currently there are 37 legislations under the Law on Securities.

10 Mongolia MASD Main laws:

- Securities Market Law;

- Company Law;

- Law on Legal Status of Financial Regulatory Committee;

- Investment Fund Law;

- Law on Asset backed Securities;

- Income Tax Law;

- Law to Combat Money Laundering and Terrorism;

- Law on Investment.

Main regulations and rules:

- Financial Regulatory Committee regulations and guidelines regarding securities market (Regulation on operations of

regulated participants of the securities market, Regulation on issuance and registration of special licenses for conducting

some regulated operations in the securities market, Regulation on calculating and monitoring solvency of securities

underwriter, broker and dealer firms, Listing rule, Regulation on prevention of securities market’s manipulation,

Regulation about integrated database on securities, General rule on securities clearing operation, etc.)

- SRO regulations (SRO Article, Membership rule, Code of Ethics, Rules for monitoring member operations and

resolving complaints and disputes, Rule for organizing professional trainings and providing accreditation, etc.)

- Mongolian Stock Exchange regulations (Listing rule, Membership rule, Monitoring rule, MSE trading rule, IPO trading

rule, etc.)

- Securities Clearing House and Central Depositary Regulations (Temporary rule on T+1 securities settlement, Rule on

cash transactions, Rule on bestowing on and demising ownership rights for securities, etc. PS: the Securities Clearing

House and Central Depository was divided into different entities (Securities Central Depository and Trades Clearing in

April 2016. Therefore, the Trades Clearing has developed 2 new rules on membership and management of members’

risk of solvency in November for discussion and approval.)

- Settlement bank rules (trade settlement related regulations of 4 settlement banks such as opening settlement accounts

and withdrawal, etc.)

11 Myanmar SECM - Securities Exchange Law;

- Securities Exchange Rules, notifications and instructions.

12 Nepal SEBON The following Act, Regulations and guidelines are functioning in Nepalese securities market.

Securities Act, 2006

REGULATIONS:

● Securities Board of Nepal Regulation, 2007;

● Stock Exchange Regulation, 2007;

● Securities Businesspersons (Broker, Dealer, Market Maker) Regulation, 2007;

● Securities Businesspersons (Merchant Banker) Regulation, 2008;

● Securities Registration and Issue Regulation, 2008;

● Mutual Fund Regulation, 2010;

● Central Depository Service Regulation, 2010;

● Credit Rating Regulation, 2011.

GUIDELINES AND POLICIES

● Securities Allotment Guidelines, 1994;

● Issue Management Guidelines, 1997;

● Securities Registration and Issue Approval Guidelines, 2000;

● Bonus Share Issue Guidelines, 2001;

● Rights Issue Disclosures Policy, 2005;

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No. Market Name of

Organization

Major Laws, Rules or Practice in the Securities Markets of Each Country

● Debenture Trust Deed Disclosure Policy, 2006;

● Mutual Fund Guidelines, 2011.

13 Singapore SAS Member Companies are governed by the following legislations in Singapore:

● Monetary Authority of Singapore (MAS)

o Securities and Futures Act (Chapter 289);

o Securities and Futures (Licensing and Conduct of Business) Regulations.

● Singapore Exchange (SGX)

o Code of Corporate Governance;

o SGX Rulebooks – covering listing, trading, clearing/settlement, custodian/depository aspects.

In July 2016, SGX announced that it will establish a separate subsidiary company (RegCo) by the second half of 2017 to

undertake all the front-line regulatory functions that it currently performs. The move aims to further enhance the

governance of SGX as a self-regulatory organisation (SRO) by making more explicit the segregation of its regulatory

functions from its commercial and operating activities. RegCo will be governed by a board of directors separate from that

of SGX. All directors of RegCo will also be independent of any other corporation listed on SGX. RegCo will be

responsible for discharging all of SGX's market regulatory and supervisory functions and will report to its own board. The

chief regulatory officer of SGX will be the CEO of RegCo and report directly to RegCo's Board.

14 Sri Lanka SECSL - Securities and Exchange Commission of Sri Lanka Act no. 36 of 1987 as Amended by act no. 26 of 1991, act no. 18

of 2003 and act No. 47 of 2009;

- Takeovers And Mergers Code;

- Unit Trust Code and Unit Trust Regulation;

- Rules applicable for Market Intermediaries (Clearing House, Investment Managers, Margin Providers, Credit Rating

Agencies and Underwriters);

- Code of Best Practice on Corporate Governance.

15 Taiwan TSA - Securities and Exchange Act;

- Securities and Exchange Act Enforcement Rules.

16 Thailand 1 ASCO - Securities and Exchange Act of 1992 (SEA);

- Regulations and Notifications of the Securities and Exchange Commission (SEC’s regulations);

- Regulations and Notifications of Stock Exchange Of Thailand (SET’s regulations);

- Notifications Procedures and Guidelines of Association Of Thai Securities Companies (ASCO’s regulations).

17 Thailand 2 ThaiBMA - Securities and Exchange Act B.E. 2535;

- Regulation and Notifications of the Securities and Exchange Commission (SEC’s regulation);

- Regulation and Notifications of the Thai Bond Market Association (ThaiBMA’s regulation).

18 Turkey TCMA - Capital Market Law (CML);

- Turkish Commercial Code.

19 Vietnam 1 VASB - The Law on Securities dated June 29, 2006; as amended in 2010;

- Decree providing detailed regulations for implementation of a number of Articles of the Law on Securities

(No.58/2012/ND-CP dated Jul 20, 2012), as amended in 2015 (No.60/2015/ND-CP dated Jun 26, 2015);

- Decree on administrative penalties for violations in securities and securities market (No.108/2013/ND-CP dated Sep 23,

2013);

- Decree on derivatives and derivatives market (No.42/2015/ND-CP dated May 5, 2015);

- Decree on requirements for investment and trading in securities (No. 86/2016/ND-CP dated July 1, 2016).

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No. Market Name of

Organization

Major Laws, Rules or Practice in the Securities Markets of Each Country

20 Vietnam 2 VBMA - The 2006 Law on Securities (as amended in 2010);

- The 2010 Law on Credit Institutions;

- Decree No.01/2011/ND-CP dated 05/01/2011 on government bond issuance;

- Decree No. 90/2011/ND-CP dated 14/10/2011 on corporate bond issuance;

- Decree No. 58/2012/ND-CP dated 20 July 2012 of the Government providing guidelines for the

implementation of the Securities Law

21 Asian Region ASIFMA n/a

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III. Regulation & Self Regulation

III –1. Major Rule Making Functions of Each Organization

No. Market Name of

Organization

Major Rule Making Functions

1 China SAC - Convention of the Members of Securities Association of China

- Guidelines for Securities Firms’ Proprietary Business

- Interim Measures for the Proficiency Examination of Certified International Investment Analysts

- Guidelines for Engagement Agreements on the Collateral Pledged against Repurchase of Bonds

- Risk Disclosure Statements in Respect of Bond Repurchase Transactions

- Code of Practice for Securities Practitioners

- Rules for Investor Education Initiatives of Business Departments of Securities Firms

- Rules of Practice of Securities Association of China for Securities Brokers (Trial Implementation)

- Mandatory Clauses of Risk Disclosure Statements for GEM Market Investments

- Guidelines for the Information Barrier Policies of Securities Firms

- Guidelines for the Stress Tests of Securities Firms (Trial Implementation)

- Rules of Securities Association of China Governing Securities Dispute Mediation

- Rules for the Implementation of the Book-Building Process and Offline Subscription in the Initial Public Offering

- Rules Governing Securities Firms’ Participation in the Regional Equity Markets

2 Hong Kong HKSA As far as securities and futures regulation is concerned, SFC is the only statutory organization making rules, regulations,

codes and guidelines in Hong Kong.

Since the establishment of HKSA in 1978, the Association started to function as a bridge among the securities industry,

regulatory authorities and public investors. HKSA participates in the consulting period when SFC has new rules or codes

to launch, as a representative of the industry. When the new rules or codes become effective, HKSA launches meetings,

seminars, and sharing to explain the new rules and their implications to our members or market participants.

Meanwhile, all directors of HKSA are in the management levels from various sectors of financial industry in Hong Kong,

so we are in a good position to maintain periodical meetings with the Government, Hong Kong Stock Exchange and SFC

to update and share the market environment, views and all relevant aspects.

3 India 1 ANMI Articles of Association of ANMI

Companies Act

4 India 2 BFF Articles of Association (AOA)

5 Indonesia APEI APEI is not a Self-Regulatory Organization (SRO), but is partner of the Regulators – OJK and the other SRO’s: IDX, KPEI

& KSEI in rule-making-rule process. It includes Focused Group Discussions and review of regulations.

6 Japan JSDA Make and enforce a wide range of self-regulatory rules covering the securities business in Japan that control the conduct

of our member firms.

7 Kazakhstan NBK The major goals of the NBK as financial institution and financial market regulator are:

- Maintenance of financial stability of financial market and financial institutions and support of the confidence in the

financial system as a whole;

- Maintenance of the appropriate level of protection of interests of consumers of financial services;

- Creation of equal conditions for the activities of financial institutions, aimed at supporting fair competition in financial

market.

The National Bank of Kazakhstan establish such rules as:

- Prudential norms for market intermediaries;

- Rulings and limitations for market intermediaries activity;

- Requirements for risk management and internal control systems of market intermediaries;

- Licensing rulings;

- Manipulation criteria and rulings for control of insider information;

- Listing rules;

- Reporting rules.

8 Korea KOFIA KOFIA make and enforce self-regulations to perform the business based on FSCMA, which is to maintain sound trade

practice among the members and to protect the interest of investors.

9 Laos LSCO The Securities Law introduced the legal authority for LSCO in formulating and amending laws and regulations for the

supervision of securities business activities including securities issuance, issuing companies, securities exchanges and

securities intermediaries (i.e., securities firms, custodian banks, audit firms, asset management companies, credit rating

agencies, asset valuation companies and securities association), securities practitioners and investigation, inspection,

dispute resolution.

10 Mongolia MASD The Financial Regulatory Committee (FRC) is the main regulator for financial services apart from the banking sector.

According to the Securities Market Law, the responsibilities of the MASD include formulating rules and regulations that

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No. Market Name of

Organization

Major Rule Making Functions

MASD members must abide by, supervising and examining members’ activities and taking measures against members

which do not comply with the law, regulation or MASD rules. To comply with the law MASD rules must include:

1. membership admission criteria, membership fees, and rule on membership suspension and termination;

2. code of professional ethics and conduct of its members and their staff;

3. rule on monitoring of members’ operations and resolving complaints and disputes;

4. rule on management, administration and operation of the self-regulatory organization;

5. rule on building capacity of the members and organizing training and other activitiess to improve professional skills of

the members;

6. rule on coordination of actions to promote fair trading practices such as preventing market manipulation and insider

trading; and

7. other matters as stated in legislation.

11 Myanmar SECM Securities Exchange Law

Securities Exchange Rules, notifications and instructions

12 Nepal SEBON According to Securities Act, 2006, SEBON has the following major rule making functions:

● In the context of approval and amendment of bye-laws of Stock Exchange, CDS and Clearing, Credit Rating Agency and

Securities Businessperson, receiving suggestion and opinion from related parties if necessary.

● To approve and make a necessary amendment of bye-laws of Stock Exchange, CDS and Clearing, Credit Rating Agency

and Securities Businessperson related to securities business with a view to provide provisions concerning the

development of capital market and to protect the interest of investors in securities.

● To issue order to amend bye-laws for institutions concerning their securities business to protect the investor’s interest.

13 Singapore SAS The SAS does not have any rule making functions under the regulations. However, it represents the broking industry to

conduct dialogues with the regulators such as MAS in areas such as the implementation of two factor authentication

(2FA), including standardized risk disclosure statements for opting out of 2FA logins and coordinated trading restrictions

announcements on restricted stocks to ensure uniformity for investors.

In areas of compliance with regulatory requirements under various Acts, SAS also coordinate industry-wide efforts to

ensure uniformity in compliance with the requirements. This includes compliance to MAS outsourcing guidelines. SAS

was involved in appointing a consultant to work out the processes and helping member firms to roll out the necessary

processes. This includes processes and seeking clarity from regulators on the Execution-Related Advice (“ERA”) in

respect of Listed Excluded Investment Products from the Financial Advisers Act (“FAA”).

SAS also coordinated legal consultations for the industry to better understand anti-competitive practices administered by

the Competition Commission of Singapore (CCS), a Statutory Board under the Singapore Government. This addresses

practices to be avoided so that the member firms do not breach anti-competitive practices. The application is still under

process by CCS.

SAS also looks at ways to help members through industry-wide initiatives. For example, drafting industry guidelines, to

help trading representatives understand what and when to provide advice to their clients.

14 Sri Lanka SECSL The SEC is the statutory body entrusted with the task of regulating the Securities Market in Sri Lanka. The SEC was

established in pursuance of the Securities and Exchange Commission of Sri Lanka Act. No. 36 of 1987 as amended by Act

No. 26 of 1991, Act No. 18 of 2003 and Act. No.47 of 2009. The SEC Act spells out the regulatory framework for the

capital market and is the cornerstone of Sri Lanka’s capital market.

Under Section 53 of the SEC Act the SEC is empowered by law to issue rules which should be published in the gazette.

They are enforceable in a court of law. The Minister is empowered to make regulations under the s.52 of the Act. This has

to be gazetted and placed before Parliament. The enforceability is covered in Section 51 of the Act which makes a violation

of rules and regulations under the Act.

The Objectives of the SEC are follows;

- The creation and maintenance of a market in which securities can be issued and traded in an orderly and fair

manner;

- The protection of the interest of investors;

- The operation of a Compensation Fund to protect investors from financial loss arising as a result of any licensed

stock broker or licensed stock dealer being found incapable of meeting his contractual obligations; and

- The regulation of the securities market and to ensure that professional standards are maintained in such market.

The SEC grants licenses to the following entities:

- Stock Exchanges

- Stock Brokers

- Stock Dealers

- Managing Companies of Unit Trusts

The SEC grants Certificates of Registration to the following Market Intermediaries:

- Underwriters

- Margin Providers

- Credit Rating Agencies

- Investment Managers

- Clearing Houses

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No. Market Name of

Organization

Major Rule Making Functions

15 Taiwan TSA TSA establishes and enforces self-regulatory rules for the engagement by the members in the underwriting, dealing, and

brokerage of securities, and any other business approved for operation in Taiwan

16 Thailand 1 ASCO ASCO makes rules with approval of SEC or SET or ASCO’s Board Of Director enforced the brokerage businesses to be in

line with proper business conduct and effectiveness of its member firms.

The ASCO’s Member Supervision functions is responsible for ASCO’s rule formation, qualification setting and

coordinating with regulators such as SET and SEC in supervision and monitoring business conduct of members.

17 Thailand 2 ThaiBMA ThaiBMA plays key functional roles in four main areas;

1. Self-Regulatory Organization (SRO)

ThaiBMA oversees and monitors the conduct of its members in order to ensure fairness and efficiency in debt securities

trading. It is committed to retaining the confidence of its membership, regulators and investors. Parts of SRO functions

include the following:

- Perform market monitoring and surveillance to ensure that all trading activities complied with relevant laws and

regulation and act as the front line to detect any unfair trading practices.

- Established Ethics and Code of Conduct for members and traders.

- Issuing rules and guidelines regarding debt securities trading and good market practice.

- Responsible for bond trader examination and registration and provide them with ongoing education to enhance their

professionalism.

- Determine enforcement procedure to penalize those who did not comply with the regulation.

2. Bond Information Center and Pricing Agency

Mandated as the sole information center and pricing agency for the bond market, ThaiBMA is an authorized source for Thai

bond market data. It disseminates information in both the primary and secondary market through its website

www.thaibma.or.th and www.thaibond.com. Both website consists of trading information, bond features, reference yield

and relevant market news and regulatory updates. It constantly attempts to improve efficient information service provided

to its members and customers.

As “Bond Pricing Agency”, ThaiBMA also provides model yield and pricing data for mark-to-market purpose of investors

such as mutual funds. This is deemed very useful in the case of illiquid debts securities.

3. Market Convention and Standard

As trading in the bond market is mainly over-the-counter rather than on an exchange, ThaiBMA serves to enhance standards

within the marketplace through extensive consultation with market participants. Example of convention and standards

issued by ThaiBMA are as follow:

- Establishment of symbols for bond and short-term debt securities. The ThaiBMA symbols have been widely recognized

in the market.

- Standard formula for price / yield calculation for various types of bonds. This helps eliminate discrepancies arising from

using different practices.

- Bond registration standards that meet international practices.

4. Market Development and Education

As part of ThaiBMA’s commitment to enhancing market development and professional practice, ThaiBMA has developed

and implemented several key data essential for market development as follows:

- Yield Curve and Benchmark Bonds. ThaiBMA provides information to the public on the government bond yield curve

and benchmark bonds on a daily basis through website and newspaper;

- Market Education and Promotion. To expand investor understanding of the bond market, ThaiBMA provides extensive

seminars and training programs for market participants and the general public. It also produces a comprehensive range of

publications for the benefits of those involved in the bond market;

- Financial data innovation. ThaiBMA has initiated financial data innovation such as Zero coupon, Credit spread, Bond

Portfolio Analysis, Value-at-risk (VaR) as additional tools for bond investment and portfolio management.

18 Turkey TCMA - Establish code of ethics for the profession;

- Establish professional rules and regulations;

- Conduct research;

- Offer educational programs;

- Assist in the resolution of disputes;

- Set safety measures aimed at preventing unfair competition;

- Determine the principles on commissions and fees charged by its members and propose these to the Capital Market

Board;

- Evaluate complaints against its members and inform the Board on the results;

- Engage in financial literacy activities.

19 Vietnam1 VASB - To protect legal rights and interests of members in accordance to goals and objectives of Association and existing

law.

- To collect opinions from members on related matters of securities law, policies and give opinion to regulators and

other related organizations as member’s representative.

- To create the code of conduct in accordance with the existing laws, to supervise the compliance and handle the

violation of members to these rules.

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No. Market Name of

Organization

Major Rule Making Functions

- To conciliate the conflicts between members, to support members to resolve the conflicts on securities and

securities market related issues with other organizations, individuals in accordance with existing laws.

- To unite and coordinate among members for general benefits of the Association, determine on the Association’s

objectives to participate and contribute to the development of securities market as well as the country.

- To train and provide with guidance on Government regulations as well as policies regulated by the Association.

- To represent members to contribute on draft of new regulations and policies on securities and securities market.

20 Vietnam2 VBMA VBMA’s charter and code of conduct regulate corporate governance of our association and conduct of the member firms.

VBMA is an association of Fixed Income Market professional and performs the following main function in Vietnam

Financial Markets:

- Set up a high-standard for Fixed Income Markets business practice

- Play the role of market champion and driver for modernization

- Collect and build database for market information

- Play an active role as a policy dialogue interlocutor for policymakers and regulators

- Conduct specialized training for Fixed Income Markets players.

VBMA has introduced a code of conduct applicable to VBMA members and their employees when engaging in debt market

transactions.

A set of market conventions applicable to debt securities transactions is also produced and intended to be applied in the

near future.

+++

A model back-office manual for debt market transactions that is designed with a view to assisting VBMA members in

standardizing and improving their back-office operations relating to debt market transactions. VBMA has selected 4

member firms for pilot implementation of this Back Office Manual.

21 Asian Region ASIFMA n/a

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III –2. Qualification System for Market Professionals

No. Market Name of

Organization

Qualification Systems for Market Professionals

1 China SAC Qualification Exams

1. Exam of Practitioner Qualification: In April 2013, SAC launched, for the first time, the pilot program of “exam by

appointment” and will hold the new exam six times on the basis of hosting the original national exam four times. Now,

the exam can be held over ten times per year.

2. Exam on Special Business: since 2004, SAC has started to hold the Exam on Securities-related Regulations of the

Mainland for professionals from Hong Kong SAR.

3. Sponsor Representative Exam: since 2004, SAC has started to hold the Competency Exam for Sponsor Representatives.

4. Executive Management Exam

5. Hong Kong Licensing Examination for Securities and Futures Intermediaries: under the framework of the “Arrangements

between Mainland China and Hong Kong in Building Closer Economic and Business Ties”, SAC has started to hold the

Licensing Examination for Securities and Futures Intermediaries since 2007.

6. CIIA Exam: since March 2006, SAC has started to hold the Certified International Investment Analysts Exam. China

now has the largest number of applicants in the world who apply to take this exam.

2 Hong Kong HKSA SFC oversees 10 kinds of Regulated Activities (will have 12 in coming 2 years) for all regulated bodies, namely:

1. Dealing in securities;

2. Dealing in futures contracts;

3. Leveraged foreign exchange trading;

4. Advising on securities;

5. Advising on futures contracts;

6. Advising on corporate finance;

7. Providing automated trading services;

8. Securities margin financing;

9. Asset management; and

10. Providing credit rating services.

The market participants are regulated by SFC in Registration/Licensing system, i.e., each market practitioner has to be

licensed by SFC as either Responsible officer (RO) or Representative (Rep). Each regulated entity must have 2 RO’s for

each Regulated Activity and every licensed person or firm must fulfill certain requirements set by SFC. These persons or

firms cannot be in business before being licensed by or successfully registered with SFC.

RO is the person responsible for the company’s operation, he/she has to possess proven managerial and market skills. If

misconduct is detected in the company, the RO holds full responsibility.

3 India 1 ANMI Under the SEBI and Exchange regulations, India have adopted a registration systems where at least two Designated Director

of the Securities Companies, should have a minimum of 2 years experience in an activity related to dealing in securities.

E.g. as a portfolio manager, or as investment consultant, or as a merchant banker, or in financial services or Treasury, Broker,

Sub Broker, Authorized Agent or as a Authorized Person to a member of a recognized stock exchange, Dealer, Jobber,

Market Maker, or in any other manner in dealing in securities or clearing and settlement thereof.

The exchange requires member firms’ officers and dealers to pass suitable examinations certifying their capability to

function in the capacity in which they are employed. They require obtaining the National Institute of Securities Market

(NISM) and National Certificate for Financial Markets (NCFM). This is a prerequisite to employment in any securities

company to ensure that they have adequate skills and knowledge. The NCFM certificate is available in all operational

subjects. The National Stock Exchange, Bombay Stock Exchange as well as MCX Stock Exchange conduct their own

examinations for the Equities Market, Futures & Options Market and the Currency Market. Here is the link to NSE‘s site

introducing you to NCFM:

http://www.nseindia.com/education/content/about_ncfm.htm.

In addition, NSE also offers a host of other examinations (including for those who want to become Insurance Agents). Here

is the link giving a list of their modules:

http://www.nseindia.com/education/content/module_ncfm.htm

A few years ago SEBI formed an Institute called NISM, with the objective of making it, over time, the sole body conducting

examinations for the Capital Markets. It has become compulsory now. Here is the link to the NISM website:

http://www.nism.ac.in/ The only outsourcing done by them is for conducting of the examinations, where they get

professional entities (largely IT training institutes, since they have the required set-up) to conduct the examinations for

them. The test material and all other back end work is handled by the respective entities. The only outsourcing done by

them is for conducting of the examinations, where they get professional entities (largely IT training institutes, since they

have the required set-up) to conduct the examinations for them. The test material and all other back end work is handled by

the respective entities.

4 India BBF The certification exams are conducted by the exchanges like BSE, NSE and MCX. The regulator SEBI has created its own

body NISM which is conducting various certificate exams.

5 Indonesia APEI There are four types of professional licenses:,

1. Broker Dealer

2. Underwriter

3. Investment/Fund Manager

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No. Market Name of

Organization

Qualification Systems for Market Professionals

4. Mutual Fund Sales Agent

The licenses 1, 2 and 3 can be obtained by passing the professional exams organized by the Capital Market Professional

Standard Committee (PSP). After getting the certificate from PSP, hopefuls must go through an interview conducted by the

OJK.

Aside from the exam conducted by PSP, hopefuls for Brokers/Dealers license can also choose to attend a course – followed

by an exam held by The Indonesia Capital Market Institute – A joint cooperation between The Indonesia Stock Exchange

and University of Indonesia.

Under new regulation POJK No. 27/POJK.04/2014, those licenses (No. 1, 2 & 3) has expiry period of 2 years. Extension

can be proposed to OJK after attending specific training organized by the industry association, as regulated by OJK.

License number 4 – Mutual Fund Sales Agent hopeful must take an exam conducted by APRDI – The Association of

Investment Management Companies.

6 Japan JSDA Under the FIEA, Japan has adopted a registration system for sales representatives, and unqualified people are excluded

from the sales activities of securities companies, etc. For this reason, and being delegated by the FIEA, JSDA requires

member firms’ officers and employees to obtain qualification as a Sales Representative, which is a prerequisite for being

engaged in the securities business in Japan. This rule ensures that market professionals have adequate skills and knowledge.

For this purpose, JSDA holds the qualification examinations for Class-1 Sales Representative and Class-2 Sales

Representative for employees of regular members involved in securities business operations. Class-1 Examination

became open to the public starting from January 2012, in addition to Class-2 Sales Representative which has been open to

the public since September 2004.

It also holds the qualification examinations for Special Member’s Class-1 Sales Representative and Special Member’s

Class-2 Sales Representative.

In addition, JSDA introduced a Sales Manager and Internal Administration system in April 1992 whereby Association

Members must appoint a “Sales Manager” and an “Internal Administrator” for each sales unit. To become a “Sales

Manager” or an “Internal Administrator”, candidates must pass the Internal Administrator examination (or Special

Member’s Internal Administrator in case of officers and employees of special members).

JSDA has been offering computerized examinations since April 2002, which enable candidates to take those examinations

on any business day. The qualification examinations for regular members are conducted in English as well.

The recent number of the registered sales representatives & registrations are shown in the following table.

Regular Members

Specified Business

Members Special Members Total

Number of firms (End

of March 2016) 256 3 212 471

Number of SRs (End

of March 2016)*

(Unit: person)

78,387 70 443,347 521,804

Number of new

registration (End of

March 2016)*

(Unit: person)

10,488 74 34,767 45,329

*Numbers of SRs and new registrations include the respective financial instruments intermediary.

7 Kazakhstan NBK In order to obtain a license, an applicant must comply with the following qualification requirements:

- availability of a business plan, which describes the purpose of organization of the applicant, guidelines of activities and

the market segment in which the applicant plan to operate, types of services, marketing plan, risks related to professional

activities of the applicant and methods to reduce such, financial perspectives (estimated balance-sheet, income

statement for the last three financial (operating) years), a staffing plan;

- availability of programs, computers and other equipment required for activities in the securities market in accordance

with the regulatory legal acts of the authorized body;

- compliance of the organizational structure with the requirements established by Law of the Republic of Kazakhstan

“On security market” and regulatory legal acts of the authorized body;

- presence of regulations concerning the internal audit of the applicant.

8 Korea KOFIA Under the FSCMA, KOFIA is responsible for the management and supervision of financial investment professionals,

including certified investment advisors, certified investment managers, certified financial risk managers and certified

research analysts. This rule ensures that qualified person has professional expertise for skills and knowledge, and partially

prevents incomplete sales and conflict between sales company and individual investor.

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No. Market Name of

Organization

Qualification Systems for Market Professionals

REGISATRATION STATUS OF FIANANCIAL INVESTMENT PROFESSIONALS (As of Sep.5, 2016)

Types of certification Number of people

Certified Fund Investment Advisor 126,872

Certified Securities Investment Advisor 93,504

Certified Derivatives Investment Advisor 65,387

Certified Investment Advisory Officer 14,570

Certified Investment Manager 13,336

Certified Research Analyst 1,116

Certified Financial Risk Manager 246

Credit Rating Agent 217

Total 315,248

9 Laos LSCO Referring to the Securities Law, LSCO shall grant a securities business professional license (i.e., broker, financial advisor,

and analyst license) to individual in accordance with conditions, methods and procedure as prescribed in the regulation on

Securities Professional Supervision. Eligibility criteria for granting such license includes that a person have to be employed

by a securities company and pass a securities professional course’s examination (i.e., Lao Professional Investment Banking

or Lao PIB). For foreign practitioners who received a securities practitioner certificate from other countries, we require that

they have to pass a Lao legal examination prior to be granted with a securities business professional license by LSCO.

10 Mongolia FRC According to the Securities Market Law and FRC’s Regulation on organizing professional assessment, issuance, suspension

and termination of special license for the market professionals, the following qualification system is implemented:

1. It is a prerequisite for all professionals to obtain special right/license in order to be able to work in FRC regulated

entities;

2. Currently, three types of licenses are issued: securities brokerage (required for brokers and dealers), investment (required

for the CEOs, internal auditors, investment advisors, analysts, and those working in underwriting, investment fund and

investment management services) and securities trading (required for professionals engaged in securities trading,

settlement, clearing, depository and custodian operations);

3. The licenses are initially granted for the term of three years (then, the second time accreditation is for 4 years, third time

for 6 years, fourth time for an unlimited period);

4. The training courses are organized by MASD, however a Professional Board consisting of 9 individuals who have at

least 3 years working experience in finance, economic and/or legal sector, appointed by the FRC, has the right to approve

the training curriculum and conduct final examinations;

5. The Professional Board holds the right to issue, suspend and terminate professionals’ licenses. Infringement of related

laws and regulations, Code of Ethics of MASD, inaction towards correcting the violation will be the basis for suspension

and termination of the rights.

6. If the professional rights/license of a professional was terminated, he/she is not able to apply for a license within a year

from the date of termination.

11 Myanmar SECM Any responsible person of the securities company shall not allow any person or organization other than its licensed

representative to operate the securities business in the name of its company.

Securities and Exchange Commission of Myanmar, SECM held examinations for such representatives in Feb 2016

and May 2016. The number of the examinees and successful applicants for each examination in calendar year 2016 is

shown in the following table.

Examination Examinees Successful Applicants

Sales Representative Feb 2016 61 41

Sales Representative May 2016 45 36

12 Nepal SEBON Required qualifications for directors and the CEOs of Stock-Broker, Securities Dealer/Market Maker are as follows:

● Hold a minimum Bachelor’s degree in economics or commerce or finance or accounts or management from a recognized

educational institution or be a certified chartered accountant or equivalent or hold Bachelor’s degree in any other areas

with a minimum of two years experience in accounts, finance or management related functions in industry or commerce

or securities market or finance sector; and

● Should be a Nepali citizen.

The qualification of the directors and the CEOs of Merchant Banker are as follows:

● Hold a minimum Bachelor’s degree in economics or commerce or finance or accounts or management or commercial

law from a recognized educational institution or be a certified chartered accountant with a minimum

of three years experience in industry, commerce or securities market or accounts, finance or commercial law or

in management related functions in financial sector;

● Possess Nepali Citizenship; and

● A foreign citizen can also be director or chief executive with the approval of the government.

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No. Market Name of

Organization

Qualification Systems for Market Professionals

13 Singapore SAS Singapore has adopted a licensing regime for trading representatives. To be licensed by the MAS, the trading

representative must satisfy a minimum educational qualification and comply with professional examination requirements.

There is a roadmap to shore up competency level of Trading Representatives (TRs) & remisiers. This came about due to

the number of TRs/remisiers leaving the industry.

14 Sri Lanka SECSL Capital Market Education Training & Research of SEC plays an important role by delivering licensing examinations,

financial literacy programs as well as continuous learning opportunities for professionals in the Securities Industry and SEC

has made this qualification compulsory to work as an Investment Advisor in the Stock Broking Industry.

Courses conducted by CMET

Certificate in Capital Markets (CCM) & Registered Investment Advisor (RIA)

Diploma in Capital Markets (DCM)

Continuous Professional Development (CPD) Programs

Other Market Intermediaries are required to comply to the Fit and Proper criteria, qualification and experience framework

as specified in the Rules applicable for Market Intermediaries.

Source: SEC Annual Report 2015

15 Taiwan TSA 1. According to “Regulations Governing Responsible Persons and Associated Persons of Securities Firms”, only person

who obtains qualification as a sales agent can engage in securities business in Taiwan. A qualified associated person of

a securities firm should have passed the securities firm agent exam held by the Securities and Futures Institution (SFI)

at the request of the TSA. SFI is a center to provide various testing and qualification recognition.

2. Qualification Examination is computer-based qualification exams which enable candidates to take examinations on any

business day. Besides, examinees holding a foreign securities specialist license need only pass the Securities Regulation

and Market Operations Exam to obtain a domestic license. Examinees may select to take the exam in English or Chinese.

3. An associated person of a securities firm who is assuming the job for the first time, or who has resumed the job after an

absence of three years shall participate in pre-service training within six months after reporting for work. Currently

employed personnel shall participate in in-service training once every three years.

16 Thailand 1 ASCO According to the SEA, SEC regulations and SET regulations, market professionals must comply with the following

qualification requirements;

1. Approval requirement

An executive officer (Director, manager or any authorized person dealing with management) must be approved from

SEC.

2. Licensing and registration requirement

An investment Consultant (IC) is required to register with SEC. For registration requirement, IC has to meet SEC criteria

and pass the license examination conducted by approved institutes. ASCO Training Institute or “ATI” is one of the approved

institutions by Thailand Securities Institute (TSI), a subsidiary of the Stock Exchange of Thailand.

Examinations

On behalf of ASCO, ATI provides the examinations for Investment Consultants to ensure that they have enough skills

and knowledge. ATI also provides computerized examinations which conducted in English as well. The examination outline

of the fiscal year 2016 shows as following;

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No. Market Name of

Organization

Qualification Systems for Market Professionals

Group Examination Topics

Group 1 Investment Consultant Group

Paper 1 Paper 1(Eng): Securities Investment Consultant Examination

Paper 2 Paper 2(Eng) : Derivatives Investment Consultant Examination

Paper 3 Paper 3 (Eng) : Debt Instruments Investment Consultant Examination

Paper 4 Paper 4 (Eng) : Fund Investments Consultant Examination

Paper 5 Paper 5 (Eng) : Equity Investment Consultant Examination

Group 2 Additional Products Group

Paper 7 Paper 7 (Eng) : Examination for Additional Product : Debt Instruments

Paper 8 Paper 8 (Eng): Examination for Additional Product : Funds

Paper 9 Paper 9 (Eng) : Examination for Additional Product : Equities

Paper 10 Paper 10 (Eng) : Examination for Additional Product : Funds and Equities

Paper 11 Paper 11 (Eng) : Examination for Additional Product : Equities and Debt Instruments

Paper 12 Paper 12 (Eng) : Examination for Additional Product : Funds and Debt Instruments

Paper 13 Paper 13 (Eng) : Examination for Additional Product : Debt Instruments, Funds, and Equities

Paper 14 Paper 14 (Eng) : Examination for Additional Product : Derivatives

Group 4 Rules and Regulations Group

Paper 17 Paper 17 (Eng): Examination on Dealing Rules and Regulations : Securities (Including Derivatives)

Paper 18 Paper 18 (Eng) : Examination on Dealing Rules and Regulations : Securities (Excluding Derivatives)

Paper 19 Paper 19 (Eng): Examination on Dealing Rules and Regulations : Derivatives

Paper 22 Paper 22 (Eng): Core Rules and Regulations

Paper 23 Paper 23 (Eng): Core Rules and Investment Suitability

Paper 24 Paper 24 (Eng): Rules and Regulations for Dealing in Securities (Excluding Derivatives)

Paper 25 Paper 25 (Eng): Rules and Regulations for Dealing in Derivatives

The number of the examinees and successful applicants as end of September 2016 is ;

- Applicants total 20,550 persons

- Examinees total 19,443 persons

- Successful applicants total 4,523 persons (Passing rate =23.26%, Industry = 23.03%)

3. Refresher course training is required to renewal license for Investment Consultant (IC) conducted by ASCO

Training Institute. (ATI).

Investment consultant type Trained (not less than 15 hours.)

Fundamental

Technical

Derivatives

Ethics, Rules

and

Regulations

Asset

Allocation

1.Investment Planner (IP) non-obligatory at least 6 hrs. at least 3 hrs. at least 3 hrs.

2.Investment Consultant

(Capital market)

non-obligatory at least 6 hrs. at least 3 hrs. at least 3 hrs.

3. Investment Consultant

(Securities market)

non-obligatory non-obligatory at least 3 hrs. at least 3 hrs.

4.Investment Consultant

(Bond market)

non-obligatory non-obligatory at least 3 hrs. at least 3 hrs.

5. Investment Consultant

(Mutual Fund)

non-obligatory non-obligatory at least 3 hrs. at least 3 hrs.

6. Investment Consultant

(Equity)

non-obligatory non-obligatory at least 3 hrs. at least 3 hrs.

7.Investment Consultant

(Derivatives market)

non-obligatory at least 6 hrs. At least 3 hrs. at least 3 hrs.

8.Investment Consultant

(Precious metal)

non-obligatory at least 6 hrs. at least 3 hrs. at least 3 hrs.

4. Training certificate requirement

A head of compliance is required to receive training certificate which is organized by ASCO.

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No. Market Name of

Organization

Qualification Systems for Market Professionals

5. Registration requirement

A trader is required to register with SET. For registration, a trader has to meet SET criteria.

17 Thailand 2 ThaiBMA Bond Traders in Thailand are required to register with ThaiBMA. In order to register, traders have to qualify the criteria

and pass the registered trader examination administered by ThaiBMA. ThaiBMA is responsible for ensuring that trading

practices of registered trader comply with the established Ethics and Code and Conduct for the bond market.

18 Turkey TCMA Licensing requirements were introduced by the Capital Markets Board (CMB), the main regulatory authority in the capital

markets, in 2001. The licensing system aims to assess the professional qualifications and the knowledge of persons working

at capital market related jobs. The first licensing examinations were held in September 2002.

•Since 2011, exams are organized by Capital Market Licensing and Training Agency (SPL).

•The CMB introduced several types of licenses for market professionals that are listed below;

1. Capital Market Activities License (Level I-II and III);

2. Derivatives License;

3. Corporate Governance Rating License;

4. Credit Rating License;

5. Real Estate Appraisal License; amd

6. Residential Real Estate Appraisal License.

19 Vietnam1 VASB According to Decision No.15/2008/QD-BTC and Circular No.147/2012/TT-BTC dated Mar 27, 2008 by the Ministry of

Finance, there are 2 types of certificates relating to securities business that market professionals must have, namely:

Securities Business Practicing Certificate and Securities Professional Certificate:

- Securities Business Practicing Certificate guarantees that the holder is eligible to hold professional positions at

securities firms, fund management companies, securities investment companies operating in Vietnam.

- Securities Professional Certificate guarantees that the holder meets necessary qualifications in securities and

stock market.

A market professional must hold Securities Professional Certificate before attending the exam for the Securities Business

Practising Certificate. There are 3 types of Securities Business Practising Certificates, including:

- Securities Brokerage Certificate;

- Financial Analysis Certificate; and

- Fund Management Certificate.

1. To attend the exam for Securities Brokerage Certificate, the Securities Professional Certificate must comprise of

qualifications on Basics on securities and stock market; Laws on securities and stock market; Securities Analysis and

Investment; Securities Brokerage and Investment Advisory.

2. To attend the exam for Financial Analysis Certificate, the Securities Professional Certificate must comprise of

qualifications applied to brokers, together with qualifications on Financial Advisory and Issue Underwriting, and

Analysis of Corporate Financial Statement.

3. To attend the exam for Fund Management Certificate, the Securities Professional Certificate must comprise of

qualifications needed for the Financial Analysis Certificate and qualification on Fund and Asset Management.

Exams are held by the Securities Research and Training Center under the State Securities Commission (SSC).

20 Vietnam2 VBMA Generally speaking, there are no mandatory qualification requirements applicable to commercial banks‘ dealers dealing

with bond trading. For brokers and analysts working for securities companies, please see our discussion below.

According to Decision No. 15/2008/QĐ-BTC dated 27-3-2008 by the Ministry of Finance, there are 2 types of certificates

relating to securities business that market professionals must have, namely: Securities Business Practicing Certificate and

Securities Professional Certificate.

- Securities Business Practicing Certificate guarantees that the holder is eligible to hold professional positions at securities

firms, fund management companies, securities investment companies operating in Vietnam.

- Securities Professional Certificate guarantees that the holder meets necessary qualifications in securities and stock

market.

A market professional must hold Securities Professional Certificate before attending the exam for the Securities Business

Practising Certificate. There are 3 types of Securities Business Practising Certificates, including:

- Securities Brokerage Certificate;

- Financial Analysis Certificate; and

- Fund Management Certificate.

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No. Market Name of

Organization

Qualification Systems for Market Professionals

1. To attend the exam for Securities Brokerage Certificate, the Securities Professional Certificate must comprise of

qualifications on Basics on securities and stock market; Laws on securities and stock market; Securities Analysis and

Investment; Securities Brokerage and Investment Advisory.

2. To attend the exam for Financial Analysis Certificate, the Securities Professional Certificate must comprise of

qualifications applied to brokers, together with qualifications on Financial Advisory and Issue Underwriting, and

Analysis of Corporate Financial Statement.

3. To attend the exam for Fund Management Certificate, the Securities Professional Certificate must comprise of

qualifications needed for the Financial Analysis Certificate and qualification on Fund and Asset Management.

Exams are held by the Securities Research and Training Center under the SSC.

VBMA also provide the training course on the Fixed Income Trading Techniques for dealer in the market. We expect that

in the time to come, all dealer must attend this training course.

21 Asian Region ASIFMA n/a

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III –3. Training System for Employees/ Sales Representatives of Securities Companies

No. Market Name of

Organization

Training System for Employees/ Sales Representatives of Securities Companies

1 China SAC Three Training Entities :

Trainings Organized by SAC, Trainings Organized by Regional Associations, Trainings Organized by Member Companies

Regarding trainings organized by SAC, there are two Types of Training Programs :

1.Face-to-face Training Programs: Securities Executive Training and Proficiency Testing, Professionals Business Training;

2. Remote Online Training Programs: General Practitioners Training.

2 Hong Kong HKSA SFC requires every market participant, for each regulated activity, must attend 5 hours of continuous professional training

(CPT) per year. The CPT trainings will be provided by HKSA as well as other financial institution recognized by SFC. Each

licensing firms will also have the responsibility to provide sufficient internal training to the staff on new rules/ guidelines.

3 India 1 ANMI These are undertaken by individual brokering houses on need basis.

4 India 2 BBF Training are conducted periodically by the top management for the staff on various aspects like behavior, content

knowledge, etc.

5 Indonesia APEI APEI works with the Regulators to implement new regulations and to enhance participants' understanding of their

functions in the securities company.

OJK requires company’s directors to participate in the continuing education in order to get better understanding about the

development and implementation of existing regulations. The training program is conducted by APEI and OJK.

For holders of broker dealers, underwriting and investment manager licenses, they have to attend specific training before

entitled for license extension from OJK. Those licenses will be expired after 2 years.

6 Japan JSDA Based on a training program drawn up annually, JSDA provides training seminars for executive officers and employees of

Association Members for the purpose of renewal of qualification and enhancement of their expertise. JSDA flexibly

conducts training seminars other than those included in the program in response to amendments of laws and institutional

reform.

Total of participants attended these seminars during the fiscal year 2015 : 4,639 persons (96 sessions)

To contribute to strengthen the compliance system and to enhance internal training in member firms, JSDA edited and

distributed a collection of rulebooks on laws and regulations to be used as reference material in internal training courses.

In addition, JSDA provided summaries and training materials on compliance-related themes from among its training themes

for the fiscal year.

FY2016 Training Plan

1. Training Based on Self-regulatory Rules

i. Seminar for company representatives (held once per year)

ii. Training for Officers (held 4 times per year)

iii. Training for internal administration supervisors (mandatory・held 10 times per year)

iv. Training for internal administration assistant supervisors (mandatory・held 10 times per year)

v. Training for internal Administrator (held 6~8 times per year)

vi. Training for sales managers (held 6~8 times per year)

vii. Training for qualification renewal of sales representatives (computer based training)

2. Training on Ethics and Compliance

i. Basic compliance seminar (held 8~10 times per year)

ii. Compliance practice seminar (held 10~12 times per year)

iii. Risk management seminar (held 2 times per year)

iv. Compliance seminar for sales staff (held 4~6 times per year)

v . Corporate ethics seminar (held 1 per year)

3. Training on topics other than Compliance

i. Basic securities business seminar (held 6 times per year)

ii. Securities business practice seminar (held 9~10 times per year)

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No. Market Name of

Organization

Training System for Employees/ Sales Representatives of Securities Companies

7 Kazakhstan NBK There are not any special requirements to training system for employees /sales representatives of securities companies,

excepting traders of KASE’s members, which must take trainings how to work with KASE’s trading system and know

what limitations and restrictions there could be.

8 Korea KOFIA The Korea Institute of Financial Investment (KIFIN), a subsidiary of KOFIA, offers an array of learning courses on financial

investment instruments to meet the needs of the financial investment industry. The principal objective of KIFIN is to provide

the industry with continued education and training in order to foster high-quality professionals. The courses are broadly

classified into professional education on specialty building for practitioners, and mandatory education for certification of

skills maintenance purposes. As of 2015, KIFIN runs 131 classes in 9 different spheres, categorized into 3 groups. KIFIN

also offers advanced courses, each tailored to the needs courses and 67 online courses. KIFIN also offers advanced courses,

each tailored to the needs of its member companies. KIFIN started running its website in July, 2000, with the total number

of individuals that have signed up online reaching 466,639.

NUMBER OF TRAINEES ENROLLED IN KIFIN COURSES

Year Professional Education Mandatory Education * Total

In-class E-Learning In-class E-Learning

2011 2,823 3,655 1,398 59,100 66,976

2012 3,597 8,680 1,130 63,269 76,676

2013 3,453 11,625 544 59,145 74,767

2014 3,253 10,368 687 53,019 67,327

2015 28,535 17,503 1,474 59,461 106,973

Note: * Refresher, skill-building and preliminary education courses offered to help financial investment professionals acquire and maintain their

certification and specialties.

9 Laos LSCO According to regulation on securities practitioner supervision, a person having a securities practitioners license are required

to attend trainings on laws and regulations relating to securities market. Such training shall be organized by LSCO from

time to time for refreshing and updating purposes. Also, employees/sales representatives of securities companies may

participate in the trainings as may be available in four companies.

10 Mongolia MASD The training of professionals and employees of securities firms is conducted by MASD as per legislation and internal rule

on training and accreditation. The training curriculum is developed by MASD and approved by the Professional Board. The

license training (for all 3 types) is conducted at least twice yearly depending on the demand. A set hours of accreditation

training is conducted yearly and a professional must attend at least 8 hour of training per year. A professional must attend

the accreditation training and pass the test for renewing his/her rights prior to the expiration of the license term (for license

terms pls see point 3. of the previou topic “Qualification Systems for Market Professionals). Someone holding an

internationally recognized license or qualification to work in the securities market allowed to enter the exam without

attending the actual training.

MASD also organizes training on other related themes such as corporate governance, ethics, internal audit and accounting

specific to some organizations’ needs. The trainings can be conducted online, but currently all trainings are provided in a

classroom.

11 Myanmar SECM Securities Exchange Rules require securities companies to ensure that its officers or staff provides fair and good faith

service. To meet this requirement, all securities companies shall establish proper training policy. SECM checks their policy

and operation

12 Nepal SEBON SEBON organizes regular trainings targeted to students, investors and market participants through the Education & Training

Sub-section at various parts of the nation. Recently, SEBON held Anti-money laundering (AML) training for its employees,

market representatives, broker and Merchant-bankers to acquaint with the changing norms of securities market.

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No. Market Name of

Organization

Training System for Employees/ Sales Representatives of Securities Companies

13 Singapore SAS The Institute of Banking & Finance (IBF) is the training arm of the MAS. It administers the qualifying exams and training

programmes for trading representatives to qualify for Capital Markets and Financial Advisory Services licences for the

securities and futures markets. It also conducts various continuous education training programmes for industry and finance

professionals. The IBF also seeks SAS feedback on their new/enhanced competency standards to be rolled out for trading

representatives.

SAS plays a complementary role in training of representatives. In 2013 the SAS developed an online module covering the

content of Module 6A, one of the examinable CMFAS modules, to help trading representatives (dealers and remisiers) to

upgrade their product knowledge before conducting business in Structured Investment Products (SIPs) with their customers.

The SGX is in the midst of revamping the Customer Account Review (CAR). Members of the SAS and the SGX are giving

feedback to MAS on the enhancements to the CAR.

For the past two years, SAS helped member companies subsidised their training programmes through funding support from

the Singapore Exchange Investor Education Fund. Such programmes include workshops on investment skills and

knowledge. To-date more than 2,200 customers have registered for the workshops.

14 Sri Lanka SECSL - Continuous professional development programs for existing investment advisors in the stock broking industry to

enable them to constantly assess and update themselves with the latest trends in the local and global capital markets

- E thical Framework and Best Practices in Professional Conduct issued by the Commission for individuals involved

in conducting investment analysis, making investment recommendations, taking investment actions and/or

engaging in any other investment profession activities ("Practitioners")

15 Taiwan TSA 1. Qualification exams of securities:

In accordance with the regulations and under commission of TSA, the “Securities and Futures Institute (SFI)”

administers nine written qualification exams including securities-related: (1) Senior securities specialist exam and (2)

Securities specialist exam.

2. Pre-job and on-the-job financial training for securities personnel (employees/sale representative)

(1) Pre-job Training: Provided by SFI. An associated person of a securities firm who is assuming the job for the first

time, or who has resumed the job after an absence of 3 years, shall participate in pre-job training within 6 months

after reporting for work. On-the-job Training: Provided by TSA. Currently employed personnel shall participate

in in-service training once every 3 years.

(2) On-the-job training is divided into general, advanced and senior level managerial training. Advanced trainings

are categorized by types of business – including stock brokerage, proprietary trading and underwriting, auditing,

administration of shareholder service, wealth management, foreign capital, and others.

16 Thailand 1 ASCO Training Courses

On behalf of SET, Capital Market Development Function (CMDF) has formulated and developed Training Courses

for securities companies. Capital Market Academy (CMA) managed by CMDF has provided synergy knowledge, visions

and leadership for policy makers inside and outside the scope of capital market.

ATI conducted by ASCO has provided financial and capital market mechanism, principle of investment, basic

knowledge of securities products with their valuations, SEC regulations and ethics for Investment Consultants and provides

training courses for executive officers and employees of member firms for the purpose of renewal of qualification and

enhancement of their expertise. Furthermore, ASCO also provides training courses for the members’ head of compliance

in order to enhance and strengthen the compliance knowledge.

As of September 2016, There are 144 in-house training courses and 33 public training courses. Total of participants

attended these courses as of September 2016 are 16,420 persons.

17 Thailand 2 ThaiBMA ThaiBMA are responsible for administering “Bond Trader License”. All bond traders are required to pass the examination

organized by ThaiBMA and attend refresher course every 2-year to renew their license. ThaiBMA also provides several

continuing education training courses for professionals in the bond market.

18 Turkey TCMA n/a

19 Vietnam1 VASB A securities broker or securities analyst of a securities company needs to obtain the Securities Professional Certificate. In

order to obtain such certificate, brokers/analysts are required to participate in a number of training courses (as listed below)

and pass the final examinations conducted by the SSC or one of the training establishments at universities approved by the

SSC.

1. Course 1: Basic Issues on Securities and Securities Market;

2. Course 2: the Law on Securities and Securities Market;

3. Course 3: Securities and Investment Analysis;

4. Course 4: Securities Brokering and Investment Advisory;

5. Course 5: Financial Advisory and Securities Underwriting; and

6. Course 6: Analysis of Financial Reports.

20 Vietnam2 VBMA A securities broker or securities analyst of a securities company needs to obtain a securities trading certificate from the

State Securities Commission (SSC). In order to obtain such certificate, brokers/analysts are required to participate in a

number oftraining courses (as listed below) and pass the final qualification examination course conducted by the SSC.

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No. Market Name of

Organization

Training System for Employees/ Sales Representatives of Securities Companies

A securities broker is required to pass the following course examinations held by the SSC:

1. Course 1: Basic Issues on Securities and Securities Market

2. Course 2: the Law on Securities and Securities Market

3. Course 3: Securities and Investment Analysis

4. Course 4: Securities Brokering and Investment Advisory

A securities analyst is required to participate in the following courses held by the SSC:

1. Course 1: Basic Issues on Securities and Securities Market

2. Course 2: the Law on Securities and Securities Market

3. Course 3: Securities and Investment Analysis

4. Course 4: Securities Brokering and Investment Advisory

5. Course 5: Financial Advisory and Securities Underwriting

6. Course 6: Analysis of Financial Reports

21 Asian Region ASIFMA n/a

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III –4. Securities Firms Inspection or Audit

No. Market Name of

Organization

Securities Firms Inspection or Audit

1 China SAC Special inspection on different business units of Securities firms, for example, credit rating, bonds, OTC derivatives,

information technology and so on.

Annual special inspection on Securities and futures institutions.

2 Hong Kong HKSA 1. SFC pays inspection/audit to regulated firms periodically;

2. SFC conducts special inspection/audit to some firms under certain circumstances;

3. Regulated firms should have their own compliance department to make sure all the internal control measurements for

compliance are in place, and are enforceable.

Under normal condition, regulated firms must submit their Financial Resource Report (FRR) on monthly basis, but in some

severe situations like huge market volatilities or regional/worldwide financial crises, in order to avoid market risk, SFC

requires regulated firms to submit their financial resource report (FRR) and other reports on daily basis.

3 India 1 ANMI SEBI and the Exchanges inspect members’ books for adherences to compliance requirements as stipulated by them from

time to time. Generally, all inspections are on-site inspections. The authority conducting the inspection may call for

additional records.

4 India 2 BBF The inspection is done by SEBI which is the Regulator and goes the inspection on site that is at the brokers office itself.

5 Indonesia APEI Securities Firms are audited by OJK and IDX, regular and incidental audits are performed annually on all securities

companies in the industry. An audit or an investigation may be conducted by visiting the head office or branch office of the

securities firm. OJK and IDX will examine the financials, standard operating procedures, systems, licenses, KYC

procedures, risk management and other control process.

Aside from the above, IDX also checks us on data feed distribution to investors and indirect vendors. And since 2015, KSEI

also audit securities firms regarding movement of stocks.

6 Japan JSDA JSDA inspects the observance of laws and regulations as well as the condition of the business and assets of Association

Members, their books and records and other items. Currently, JSDA conducts four types of inspection, namely General

Inspection, Special Inspection, Follow-up Inspection and Moving/ Continuous Inspection.

In principle, inspection is conducted by visiting the head office, branch office, sales office, or other facility of the

Association Members and inspecting its account records etc. (i.e., onsite inspection). In some cases, instead of onsite

inspection, off-site or document-based inspection may be conducted using account records etc. submitted by the Association

Members subject to the inspection without visiting the said Association Members.

JSDA also conducts offsite monitoring and timely check the financial condition of Association Members.

7 Kazakhstan FSC The NBK have the right to carry out inspections of activities of issuers, licensees.

The following shall be recognized as reasons for the performance of an inspection:

- Complaints of investors;

- Complaints of securities holders;

- Complaints of professional participants of the securities market and self-regulatory organizations;

- A court ruling, resolution of the procurator or an inquest and preliminary investigation authority for the performance

of an inspection or for the participation of workers of the authorized body in an inspection;

- Discrepancy of information contained in documents or details, discovered by the authorized body in the course of

considering documents submitted by an issuer for the state registration of an emission securities issue, consideration

and approval of a report on results of allocation and (or) redemption of emission securities;

- Discrepancy established by the authorized body in the course of considering reports on activities of licensees;

- Information on commission of a transaction in emission securities or other financial instruments with the use of

information which constitutes commercial and service secrets in securities markets;

- Other facts of violation of the Republic of Kazakhstan legislation by securities market entities, that became known to

the NBK.

The on-site inspection is carried on a regular basis in accordance with the plan. Large companies are inspected once a

year, while small companies are inspected once in a three years.

There are special divisions which provide off-site regulation without visiting companies. There exist ad hoc on-site

inspections if necessary.

8 Korea KOFIA KOFIA may inspect whether a financial investment company and its employees comply with the Regulations and the

appropriateness of internal control. Inspection can be conducted onsite or offsite, depending on the importance, urgency

and characteristics of the subject.

9 Laos SECO LSCO is given the authority to supervise, monitor and inspect securities firms including their securities business operations,

financial statements, utilization of their registered capital and other related activities to ensure their compliance with law

and regulations for market efficiency, transparency and fairness as well as to ensure market stability, and to protect right

and interest of investors. LSCO shall conduct 2 types of inspections including on-site and off-site inspection. On-site

inspection comprises general inspection, inspection by notice and ad-hoc inspection.

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No. Market Name of

Organization

Securities Firms Inspection or Audit

10 Mongolia MASD The FRC mainly conducts in-site and off-site inspections/audits of regulated entities with regard to legislation compliance.

As MASD became a SRO in June 2015, the FRC aims to transfer some of its rights to MASD. For example, the FRC

Regulation on solvency of securities brokerage, dealer and underwriting firms issued in December 2015 stipulates that the

securities firms must submit quarterly reports on their solvency to the FRC as well as MASD. Also, in March 2016, MASD

and FRC conducted joint in-site visits to the securities companies. The following are legal provisions related to FRC

monitoring of securities firms:

1. The FRC shall regularly monitor regulated entities’ operations whether they comply with laws, rules and regulations set

by the FRC and requirements of the special permits;

2. The FRC may conduct an inspection at any time on its own initiative if deems necessary or upon request or information

received from clients, legal entities, or foreign regulatory organization;

3. A regulated entity is obliged to deliver documents and materials required by the FRC within a specified time;

4. A regulated entity shall have its accounts audited half yearly by a FRC registered auditor and submit paper and digital

copy to the FRC within the period specified in the law;

5. An auditor shall immediately report to the FRC and to the regulated entity in writing, if an auditor becomes aware of

any matter which would critically affect the financial position of the regulated organization or discovers evidence of

violation of financial regulations during the audit;

6. The FRC if deems as necessary may demand a regulated entity to have its quarterly financial statements audited;

7. A regulated entity required to have an internal compliance officer and internal audit rule.

11 Myanmar SECM Only SECM conducts the inspection.

12 Nepal SEBON SEBON conducts onsite and offsite inspection of the securities firms. Onsite inspection is conducted by visiting the office

of the securities firm and inspecting its account, other records and physical facilities, etc.

In off-site inspection, SEBON observes the transaction of brokerage firm by means of surveillance software.

The Stock Broker, Securities Dealer and Market Maker are required to keep their books of accounts and prepare financial

reports including profit and loss accounts, balance sheet and cash flow statements in the format and standards as prescribed

under the prevailing laws.

13 Singapore SAS The MAS and SGX carry out regular inspection checks on all licensed financial institutions (MAS) or registered members

(SGX).

14 Sri Lanka SECSL - The Supervision Division is responsible for the Licensing/Registration, Supervision, and Compliance Monitoring and

On Site/ Off Site Examinations of Stock Broking Companies, Unit Trust Managing Companies and Market

Intermediaries (Investment Manager, Margin Provider, Underwriter, Credit Rating Agency and Clearing House).

- The supervisory role of the Division involves both On Site and Off Site supervision on the financial viability and

business conduct of market participants towards investor protection and thereby building investor confidence in the

Capital Market.

- On site/Off site supervision is carried out adopting a Risk Based supervisory methodology focusing on different risk

categories such as Prudential, Liquidity, Financial, Credit, Operational, Legal and Reputational Risk with emphasis on

compliance of market participants with applicable Rules & Regulations to strengthen market oversight.

15 Taiwan TSA 1. TSA may perform general inspection and/or special inspection on members’ financial conditions and operational

situations. The inspections are mainly conducted on securities firms who (1)accept orders to trade foreign securities, (2)

underwrite or re-sell securities and (3) conduct wealth management business. Inspections can be conducted by physical

inspection or document-based inspection.

2. When conducting general inspection, in cases where the TSA discovers that a member is being badly run, has suffered

losses to the extent that it becomes difficult to maintain its creditworthiness, or has experienced any serious incident, or

has the likelihood that the trading order and investment security are severely affected, the TSA shall promptly initiate a

special examination and provide advice, such procedures shall be drafted by the TSA and reported to the FSC for

recordation.

16 Thailand 1 ASCO ASCO has coordinated with regulators (SEC & SET) in supervising and monitoring business conduct of members. Each

member has to be audited by SEC under SEA supervision and monitoring on financial responsibility rules and regulations.

Each member has to be audited by SET under SET supervising and monitoring on members’ trading activities.

17 Thailand 2 ThaiBMA ThaiBMA act as a front line regulator to detect unfair trading practices by using Market Surveillance System for detecting

suspicious patterns and potential fraudulent practices such as volume manipulate, excessive mark up / down, and etc.

ThaiBMA also conducted 2 types of inspections, namely Regular inspection and Special inspection with 2 approaches; (1)

on-site inspection by visiting member’s office and facilities related to their bond trading i.e., trading account, electronic

data, and etc. (2) off-site inspection by using document-based without visiting member’s office.

18 Turkey TCMA TCMA has the right and the duty to

• Establish professional rules and regulations to provide that activities performed by the Association members are fair and

honest, to provide business ethics, to facilitate the solidarity among the Association members, to safeguard the prudent

and disciplined conduct of business by its members;

• Take necessary measures to prevent unfair competition and inform the CMB;

• Give disciplinary penalties specified in the Statute of the association;

• Notify the CMB regarding its proposal on principles regarding commissions and fees charged by members;

• Evaluate complaints against its members and inform CMB on the results; and

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No. Market Name of

Organization

Securities Firms Inspection or Audit

• Establish, enforce and supervise regulations on subjects assigned by the legislation or specified by CMB.

TCMA can enforce its members in compliance with the above regulations. On-site inspection is rare. In most of the cases,

investigations are handled by collecting the necessary documents.

19 Vietnam 1 VASB VASB is not authorized or mandated to conduct any inspection or audit of member firms

The State Securities Commission (SSC) will routinely audit securities firms. The audit content will involve securities firms’

compliances with operational rules set by the SSC.

20 Vietnam 2 VBMA Under the VBMA Charter, VBMA is not authorized or mandated to conduct any inspection or audit of member firms.

21 Asian Region ASIFMA n/a

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III –5. Disciplinary Action and Measures Against Misconducts

No. Market Name of

Organization

Disciplinary Action and Measures Against Misconducts

1 China SAC SAC has established the Self-regulation Oversight Committee. The duties of this Committee are to formulate and improve

the substantive rules, organizational rules and procedural rules for self-regulatory supervision; to reinforce the industry self-

regulation, promote the industry integrity enhancement, and play an important role in the industry self-regulation.

2 Hong Kong HKSA SFO and its sub-laws consist of criminal and civil actions against misconducts, Depending on the nature of the wrongdoings.

For criminal cases, the measurement will be prison plus fines or fines only for most of the cases; for civil cases, the

disciplinary actions can be revoke/suspend of license, public reprimand, fines and warnings.

SFO gives SFC full power to investigate, to prosecute, to apply court orders to freeze assets, disqualify directors of listed

companies or licensed corporations.

3 India 1 ANMI Under the SEBI and Exchange regulations, disciplinary action is applied against the securities company for any

transgression of the governing laws by either the company or its employees.

The disciplinary action may include any of the following: (1) reprimand, (2) imposition of a fine, (3) suspension of

membership for a defined period, (4) expulsion in case of a serious offence. Separately SEBI may compound the offence

by disgorgement of profits with a consent order.

4 India 2 BBF Same as ANMI

5 Indonesia APEI Under the Law Number 8 Year 1995 regarding Capital Market (UUPM), disciplinary actions include:

1. Sanctions against the company in the form of:

- written warning

- penalty

- temporary suspension

2. Sanctions against individuals (Director and/or Employee involved in the Securities)

- written warning

- penalty

- temporary suspension individual license

- revocation of individual license

Before sanctions are applied, OJK will ask for explanation to the parties regarding the offense committed and its

supporting documents. The Regulator will impose penalty based on the results of the completed investigation. The

activities are automatically suspended if the sanctions are connected with the revocation of the license.

6 Japan JSDA Under the FIEA, there are two categories of administrative disciplinary action. One is applied to companies such as

securities companies, banks, insurance companies and so on. The other is applied to those companies but with regard to

individual sales representatives and others who are affiliated with them and are acting as sales representatives. (*)

In addition to the task of taking administrative disciplinary actions regarding to sales representative which is assigned to

JSDA under the FIEA, JSDA also has two categories of disciplinary actions based on its self-regulation which are similar

to those under the FIEA. One is applied to the member firm itself while the other is applied with regard to its

employees.(*)

There are five kinds of disciplinary actions to be taken against Association Members when disciplinary action is

triggered, namely 1) reprimand, 2) imposition of a negligence fine, 3) limitation of membership, 4) suspension of

membership and 5) expulsion.

As for the JSDA’s disciplinary actions regarding to employees, there are two categories; the first one is the prohibition

from business of sales representatives, and the second one is treatment of a perpetrator of an inappropriate act. The details

are as follows.

Categories Subject acts Duration Prohibition from

employing

Prohibition from

business of sales

representatives

Violation of laws and

regulations, etc.

— Within five (5)

years

Treatment of a

perpetrator of an

inappropriate act

(disqualification as

a sales

representative)

Serious violation of laws

and regulations, etc.

which led to significant

loss of public confidence

and internal

discipline equivalent to

dismissal

Class 1

(most serious

cases)

Indefinite

Class 2

(other than Class

1)

Five (5) years ○

(*) Because the application for registration of the Sales Representative is made by the Association Member, any related

disciplinary action regarding the said Sales Representative is taken against the Association Member.

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No. Market Name of

Organization

Disciplinary Action and Measures Against Misconducts

7 Kazakhstan NBK There are wide instruments which NBK or criminal authorities could use against market intermediaries and issuers,

including:

- administrative fines for market manipulation, insider trading and other misconduct;

- sanctions which connected with removal of top-managers and other executives or withdrawal (suspension) of a license;

- criminal fines or jail for market abuse which cause a major damage;

- other enforcement measures (require a letter of commitment, compile a written agreement with the market

intermediary, issue a warning, issue a written prescription, obligatory for execution).

8 Korea KOFIA KOFIA may, when a financial investment company and its employees violate the regulations or do not actively implement

them, impose sanctions by the Association’s Articles of Association. The types of sanctions that can be imposed on the

members(a financial investment company) by the Self-Regulation Committee (hereinafter referred to as the Committee)

are any of the following Items, and the sanction of Item 4 may be imposed with other sanctions when deemed necessary:

1. Request for the member to be barred from the general meeting;

2. Suspension of the qualification of the member;

3. Suspension of the whole or part of the duties provided to the member by the Association;

4. Imposing sanctions;

5. Warning; or

6. Caution.

The types of sanctions that can be recommended on the executives of the member by the Committee are any of the following

Items;

1. Dismissal (including the recommendation for suspension of business practice until the decision of whether of not to

dismiss the executive concerned at the shareholder’s meeting;

2. Suspension of business practices for less than six months;

3. Warning; or

4. Caution.

The types of sanctions that can be recommended on the employees of the member by the Committee are any of the following

Items;

1. Disciplinary dismissal;

2. Suspension;

3. Salary reduction;

4. Reprimand; or

5. Caution.

9 Laos LSCO Person or organization who violates the provisions in the Law on Securities and related regulations shall be subject to the

following sanctions:

(1) Being warned in writing;

(2) Being fined;

(3) Repay in values of damage;

(4) Suspending or revoking a securities business license or revoke the Securities Practitioner license;

(5) Being subject to legal proceeding upon the character and scope of their violation.

10 Mongolia MASD Suspension or termination of special licenses is the main measure against misconduct of market professionals by the FRC

and MASD. Also, a measure of suspension and termination of special permits and trading is taken by the FRC, MSE, etc.

against regulated entities’ misconduct including inability to pay membership fees on time (which affects the customers’

trading rights). Unless it is a case of criminal nature, the misconduct is regulated by the Securities Market Law and other

regulations (of FRC, MSE, CD) which imposes administrative sanctions such as various level fines and penalties. The

newly revised Criminal Code (2015) included insider trading and market manipulation as a crime and imposes sanctions

such as fines, limitation of movement or 3 months’ to 2 years imprisonment.

MASD has a special Disciplinary Board within its structure which overlooks at quality of member firms’ services as well

as their compliance with the laws. The Board’s functions are regulated by the MASD’s Rule on monitoring of members’

operations and resolving complaints and disputes.

11 Myanmar SECM Securities Exchange Law specifies prohibited acts in article 49 such as insider trading and manipulation. Any person who

violates this prohibition shall be punished with imprisonment for a term not exceeding 10 years and may also be liable to

fine.

SECM requires securities companies to Implement measures necessary for the prevention of prohibited acts.

12 Nepal SEBON In the case of violation of act, or rules, bye-laws, directives, thereunder or the order or direction issued by the SEBON, it

may punish with one or more than one punishment as mentioned below:

● Alert and/or provide written warning;

● Issue order for correctional steps;

● Impose partial or full restriction on the transaction of approved securities entrepreneur or security market;

● Impose monetary penalty; and

● Suspend or cancelation of license.

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No. Market Name of

Organization

Disciplinary Action and Measures Against Misconducts

13 Singapore SAS The supervisory and disciplinary framework for the securities industry is set out by the MAS, which is governed by the

MAS Act. The Act confers powers on MAS to issue legal instruments for the regulation and supervision of financial

institutions. In addition, MAS also has frameworks and guidelines in place on topics which cut across various classes of

financial institutions.

Financial Supervision of Capital Markets

Financial supervision is mainly undertaken by the Capital Markets Intermediaries Departments, the Corporate Finance &

Consumer Department, the Markets Policy & Infrastructure Department and Enforcement Department under the MAS.

Capital Markets Intermediaries Departments I, II and III

The Capital Markets Intermediaries (CMI) Departments have collective responsibility for the admission and supervision

of capital markets intermediaries, including securities and futures brokers, fund managers, real estate investment trust

(REIT) managers, corporate finance advisers, financial advisers, insurance brokers, trust companies, and credit rating

agencies. The three departments administer the licensing and business conduct rules for these intermediaries to promote

safe, sound and fair-dealing intermediaries. Broadly, CMI Department I supervises intermediaries of Singapore and

Malaysian financial groups. CMI II supervises intermediaries of American and UK financial groups, while CMI III

supervises intermediaries of Asia-Pacific and other European financial groups.

Corporate Finance & Consumer Department

The Corporate Finance & Consumer Department has supervisory responsibility for capital markets through the

administration of the Securities and Futures Act, the Business Trusts Act and the Singapore Code on Take-overs and

Mergers. It regulates (i) the offering of securities, business trust, Real Estate Investment Trusts and collective investment

schemes; (ii) the conduct of takeover and merger transactions; (iii) the disclosure of interests in securities of listed entities

and (iv) SGX as a listed entity. It also houses the Consumer Issues Division which spearheads initiatives in financial

education and coordinates MAS' responses to consumers who have disputes with financial institutions.

Markets Policy & Infrastructure Department

The Markets Policy and Infrastructure Department has supervisory responsibility for markets and infrastructures

including central counterparties and trade repositories. The department formulates and implements policies in relation to

markets and infrastructures, as well as market and business conduct policies to achieve fair outcomes for depositors,

investors and policyholders. It is also responsible for formulating MAS' positions on competition issues and corporate

governance standards.

Enforcement Department

The Enforcement Department aims to uphold the integrity of Singapore’s financial markets by deterring unlawful and

improper conduct through effective surveillance and enforcement. It investigates and enforces breaches of the laws

administered by the MAS. These include the Banking Act, the Financial Advisers Act, the Insurance Act, the Securities

and Futures Act, and MAS regulatory requirements on financial institutions against terrorist financing and money

laundering. The Enforcement Department also jointly investigates market misconduct offences under Part XII of the

Securities and Futures Act with the Commercial Affairs Department, and provides assistance to overseas regulators under

the International Organisation of Securities Commissions (IOSCO) Multilateral Memorandum of Understanding. As part

of its mandate, the Enforcement Department also employs digital forensics, market surveillance and data analytics to

support its investigative and enforcement work.

Enforcement Actions

Information on formal regulatory and enforcement actions taken by MAS for breaches of the Securities and Futures Act

(Cap. 289), the Financial Advisers Act (Cap. 110) and the Insurance Act (Cap. 142) is published. The information will

remain on this page for a period of five years from the date of publication except for prohibition orders which are still in

force after the expiry of the five year period. Information on such prohibition orders will remain on this page until they

cease to be in force.

SGX

The SGX supervises the compliance of listed issuers, their directors, executive officers, sponsors and registered

professionals with the Listing Rules and the compliance of SGX trading and clearing members, their directors, trading

representatives, officers, employees or agents with the Trading and Clearing Rules.

Any suspected breach will be thoroughly investigated by the SGX. SGX’s investigative powers include the conduct of

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No. Market Name of

Organization

Disciplinary Action and Measures Against Misconducts

investigations where there are suspected breaches of SGX’s Rules.

Where the investigation reveals a breach, SGX may either:

a. issue a letter of warning to the Relevant Persons;

b. make an offer of composition to the Relevant Persons;

c. take other forms of enforcement actions available to us; or

d. charge the Relevant Persons before the Disciplinary Committee.

In deciding on the appropriate actions, SGX will take into account:

i. market impact of the breach;

ii. nature of the breach;

iii. cause and duration of the breach;

iv. the number of breaches;

v. background of the Relevant Persons, in particular the past compliance track record; and

vi. mitigating and aggravating factors.

Disciplinary Committee

The Disciplinary Committee hears the charges brought by SGX against Relevant Persons who are alleged to have

breached SGX’s Rules. If the Disciplinary Committee decides that the charges have been established by SGX, it will

decide on the appropriate disciplinary action.

The Disciplinary Committee is able to impose a wide range of sanctions including reprimands, fines, restrictions or

conditions on activities, suspension, expulsion, revocation of authorisation, deregistration, requiring Relevant Persons to

undertake an education or compliance program, ordering directors to relinquish their day-to-day roles, and confirming,

charging or discharging the appointment of a manager by the Relevant Person.

Under the Listing Rules, the Disciplinary Committee is able to impose a wider range of sanctions than SGX for breaches

of Listing Rules, including:

1. issuance of a public reprimand;

2. imposition of a monetary penalty in excess of $10,000 per breach;

3. imposition of a monetary penalty in excess of $100,000 in aggregate for multiple breaches;

and

4. issuing an order for the denial of facilities of the market, prohibiting an issuer from accessing the

facilities of the market for a specified period.

A Relevant Person or SGX may appeal against the decision of the Disciplinary Committee to the Appeals Committee.

The decision of the Appeals Committee is final and binding. Disciplinary actions meted out by the Disciplinary

Committee or Appeals Committee will ordinarily be published on the SGX website, unless the Disciplinary Committee or

Appeals Committee orders otherwise.

To ensure impartial and independent administration of sanctions, members of the Disciplinary Committee and the

Appeals Committee must not be, or have been, within the past 3 years from their respective appointment dates, directors,

officers or employees of SGX or its related corporations.

Past disciplinary actions that the SGX or the Disciplinary / Appeals Committees have taken against offenders who have

breached SGX rules are published on the SGX website.

14 Sri Lanka SECSL - Cancel or suspend the License/Registration granted to stockbroker, stock dealer or any other market intermediary

- Reprimands

- Convictions – Indefinite

- Compounding – Three years from the date of compounding

- Cautions

- Warning

15 Taiwan TSA If any member fails to perform any obligations, the TSA may, through resolution of the directory board, request correction,

give a warning or order the member to impose appropriate self-disciplinary sanctions on its responsible person or employee.

Any or all of the following sanctions may also be imposed based on the level of gravity and reports may be filed with the

authority governing the specific business:

1. Impose penalty for breach in the amount of no less than 300,000 and no more than 10,000,000 NT Dollars. The

amount of penalty may be increased by 100% each time for consecutive sanctions until correction is made or required

actions are undertaken.

2. Suspend all or part of the entitlements enjoyed by the member. Report the case to the governing authority for proper

sanction.

16 Thailand 1 ASCO Under SEA, there are two categories of administrative disciplinary action. The first one is applied to securities businesses

such as a broker, a dealer, an underwriter, mutual or private fund management, an advisory investment service etc. The

second one is applied to an individual employee such as an executive officer, an investment consultant, a fund manager and

trader affiliated with those businesses as following:

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No. Market Name of

Organization

Disciplinary Action and Measures Against Misconducts

Sanction against the company via

1. Writing warning notice

2. Penalization

3. Temporary suspension

4. License Revocation

Sanction against individual via

1. Giving Probation

2. Suspension of license, approval or registration

3. Revocation of license, approval or registration

Control of contact with investors and work procedures for staff

Securities companies must create and issue work procedures that regulate the activities of their personnel. The work

procedures are needed in order to ensure that every staff member performs efficiently and does not cause any damage to

any client, to the employee, and to the firm. In addition, the procedures help ensure all operations comply with the standards

or code of conduct prescribed by the SEC. In accordance with best practices for internal control, companies shall divide

their operations into two groups: front office and back office. This division enhances the checks and balances in work

procedures. For example, front desk employees are prohibited from safeguarding trading confirmation tickets, client asset

summaries, or modifying client information. Furthermore, securities companies shall establish an internal check and balance

system so that all the important tasks of a process are not delegated to one person. Mistakes or even fraud will be more

likely if one person performs or controls all the important tasks in a process. For instance, when a client is trading over his

or her account limit, the exception must be approved through the appropriate line of authority. All revisions of erroneous

transactions must be approved by a supervisor, after the supervisor examines the transactions and finds that the revisions

are necessary and proper. Also, any withdrawal or transfer of the clients’ securities must be approved through a designated

line of authority.

Securities companies must set up a work manual for staff. The manual helps make sure that operation runs smoothly

when staff changes occur. The manual should have clear and full explanations of the work procedures and policies. The

manual must be kept up to date.

In addition to the aforementioned operational controls, securities companies must also control staff trading by

establishing clear rules to prevent conflicts of interest and the exploitation of nonpublic information. If a securities company

is also a brokerage firm, the company should permit staff to have a trading account only with their employer. However, if

the company allows its staff to open trading accounts with other companies, it is crucial to set up a working control and

compliance system. The control and compliance system can ensure the same level of efficiency as when staff open accounts

at the company.

17 Thailand 2 ThaiBMA There are two categories of administrative disciplinary action under ThaiBMA rules. One is applied to member firms. The

other is applied to individual registered trader affiliated with those member firms.

There are five kinds of disciplinary actions to be taken against member firms when disciplinary action is triggered, namely

(1) warning (2) probation (3) fine (4) suspension (5) revocation.

18 Turkey TCMA A member which acts contrary to professional honour, professional principles and rules, to legislations related to the capital

market activities and to resolutions of the TCMA can be fined according the measures of the Disciplinary Regulation.

The following disciplinary penalties are applied, depending on the nature and importance of the act.

Warning: a written notice to the concerned member stating that it has to act more diligently and carefully in

performing its activities.

Censure: a written notice to a member stating that it is faulty in its profession and behaviour.

Fine: the amount is paid by the liable party to the Investors Protection Fund within 30 days following the date of the

notice.

Temporary exclusion from the Association membership: direct or indirect restriction of professional activities of

a member for a temporary period of time to be designated according to the nature and importance of the incorrect

act, not exceeding a period of 6 months.

Permanent discharge from the Association membership: in that case, the relevant institution cannot operate in

the capital markets ever.

The actions requiring temporary exclusion are insider trading and market manipulation. The action requiring permanent

exclusion is using customers’ assets (cash or capital market instruments) in favour of the member or third parties by issuing

counterfeit documents or forging documents.

19 Vietnam1 VASB According to Decree No.108/2013/NĐ-CP dated Sep 23, 2013 of the Government on dealing with administrative violations

in the field of securities and securities markets, any organization or individual (whether Vietnamese or foreign) committing

a violation as set forth in the Decree would be subject to an administrative sanction.

Administrative violations relating to securities are categorized into the following classes:

a. Violations of regulations on offering of securities;

b. Violations of regulation applicable to public companies;

c. Violations of regulation applicable to treasury share transactions;

d. Violations of regulation applicable to tender offers;

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33

No. Market Name of

Organization

Disciplinary Action and Measures Against Misconducts

e. Violations of regulations on listing of securities;

f. Violations of regulations on organizing stock exchanges;

g. Violations of regulations on securities business;

h. Violations of regulations applicable to securities trading;

i. Violations of regulations applicable to securities business, securities registration, securities depository; clearing and

settlement of securities transactions; custodian banks; depository banks;

j. Violations of regulations on reporting requirements and disclosure obligations;

k. Violations of regulations on auditing applicable to issuers, listing companies and business organizations in the field

of securities; and

l. Violations of regulations of inspection and examination of authorities.

Administrative sanctions includes (a) a reprimand, (b) imposition of fine (up to VND 2 billion), and (c) suspension of a

practicing certificate or a representative office’s operation certificate for a term of up to 24 months, (d) cancellation of

securities operations (such as an offering or listing of securities), and € seizure of assets that are used during the course of

violation. Additional remedies are also provided by Decree 108, including refunding the proceeds from issuance of

securities or specific performance of certain transactions or obligations (such as continuity of open tender).

The SSC has power to transfer an administrative violation to criminal investigation pursuant to The 2012 Law on Treatment

of Administrative Violations. Administrative sanctions and remedies are publicly announced on the website of SSC.

20 Vietnam2 VBMA Under the existing law and the VBMA Charter, VBMA is not authorized or mandated to take any disciplinary action or

measure against misconducts of the member firms or the member firms’ professional staff (such as a securities broker or

securities analyst)

According to Decree No. 108/2013/NĐ-CP dated 23 September 2013 of the Government on dealing with administrative

violations in the field of securities and securities markets (“Decree 108”), any organization or individual (whether

Vietnamese or foreign) committing a violation as set forth in the Decree would be subject to an administrative sanction.

Administrative violations relating to securities are categorized into the following classes:

a. Violations of regulations on offering of securities;

b. Violations of regulation applicable to public companies;

c. Violations of regulation applicable to treasury share transactions;

d. Violations of regulation applicable to tender offers;

e. Violations of regulations on listing of securities;

f. Violations of regulations on organizing stock exchanges;

g. Violations of regulations on securities business;

h. Violations of regulations applicable to securities trading;

i. Violations of regulations applicable to securities business, securities registration, securities depository; clearing and

settlement of securities transactions; custodian banks; depository banks;

j. Violations of regulations on reporting requirements and disclosure obligations;

k. Violations of regulations on auditing applicable to issuers, listing companies and business organizations in the field

of securities; and

l. Violations of regulations of inspection and examination of authorities.

Administrative sanctions includes (a) a reprimand, (b) imposition of fine (up to VND 2 billion), and (c) suspension of a

practicing certificate or a representative office’s operation certificate for a term of up to 24 months, (d) cancellation of

securities operations (such as an offering or listing of securities), and € seizure of assets that are used during the course of

violation. Additional remedies are also provided by Decree 108, including refunding the proceeds from issuance of

securities or specific performance of certain transactions or obligations (such as continuity of open tender).

The SSC has power to transfer an administrative violation to criminal investigation pursuant to The 2012 Law on Treatment

of Administrative Violations. Administrative sanctions and remedies are publicly announced on the website of SSC.

21 Asian Region ASIFMA n/a

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III –6. Dispute Resolution System between Securities Firms and Customers

No. Market Name of

Organization

Dispute Resolution System between Securities Firms and Customers

1 China SAC SAC has established a team of professional mediators by appointing 126 securities dispute mediators nationwide.

SAC is proactively collaborating with the people’s courts at all levels to explore the linkage between litigation and

mediation with a view to increasing the actual effectiveness of dispute mediation.

Securities dispute mediation is free of charge to investors.

SAC’s online application platform for securities dispute mediation:

http://www.sac.net.cn/hyfw/zqjftj/zxsq/

SAC’s securities dispute mediation helpline: 010-66575833

2 Hong Kong HKSA An organization, namely Financial Dispute Resolution Scheme (FDRS), was set up few years ago. Its main purpose is to

resolve disputes between securities firms and customers. All regulated financial institutions are required (by SFC) to join

FDRS as members, all claims up to HKD500,000 or below can be settled via FDRS by means of mediation and arbitration.

Along the claim proceedings, if misconduct found, the case will be referred to SFC.

3 India 1 ANMI The SEBI regulations require all exchanges to organize a grievance redress cell for customers. At first, the exchange

attempts to conciliate between the disputants. In case conciliation is frustrated, the disputants can refer the dispute to

arbitration under the Indian Arbitration Act. The exchanges specify the rules for Arbitration in accordance to the Arbitration

Act. The disputants may appeal against the arbitration award. The final award is binding on the disputants.

Receipt and Disposal of Investor’s Grievance-NSE

Year Against Members Against Companies

Pending

at

the

beginning

Received Disposed

Pending

at

the end

Pending

at

the

beginning

Received Disposed

Pending

at

the end

2009-10 1,138 5,892 6,226 804 60 881 772 169

2010-11 804 6,610 6,253 1,161 169 1,418 1,157 430

2011-12 1,161 5,401 5,495 1,067 430 1,334 1,651 113

2012-13 1,067 4,721 4,910 878 113 1,644 1,500 257

2013-14 878 4,846 5,178 546 257 1,570 1,640 187

2014-15 546 7,129 7,094 581 187 1,905 1,846 246

2015-16 581 4,762 5,132 211 246 2,629 2,664 211

Status Report of Arbitration Matters-NSE

Year No. of Cases

Received Withdrawn Awards Pending

2009-10 CM 517 52 465 0

2009-10 F&O 502 43 459 0

2010-11 CM 258 13 245 0

2010-11 F&O 276 8 268 0

2011-12 CM 286 8 278 0

2011-12 F&O 278 6 272 0

2012-13 CM 280 4 276 0

2012-13 F&O 330 7 323 0

2013-14 CM 367 11 356 0

2013-14 F&O 428 13 415 0

2013-14 CDS 25 2 23 0

2014-15 CM 265 5 260 0

2014-15 F&O 213 210 3 0

2014-15 CDS 13 13 0 0

2015-16 CM 203 4 151 48

2015-16 F&O 213 7 164 42

2015-16 CDS 11 0 5 6

Total 4465 406 3963 96

4 India 2 BBF 1.Brokers maintain complain book

2.Arbitration system of stock exchange

3.Complain to the Regulator

5 Indonesia APEI Investors may report securities firms to OJK, who will conduct an investigation. OJK would prefer that the disputes between

Securities Firms and Investors be resolved amicably between both parties. An alternate dispute settlement may also be

reached through the Indonesian Capital Market Arbitration Agency (BAPMI) rather than the court of law.

In August 2016, APEI revised its Articles of Association to include Honorary Council who will enforce Code of Ethics of

the Association. Disputes among members can be resolved through Code of Ethics Department, and escalated to the

Honorary Council, if necessary.

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No. Market Name of

Organization

Dispute Resolution System between Securities Firms and Customers

6 Japan JSDA In April 2009, FINMAC (Financial Instruments Mediation Assistance Center: NPO) was established as a new financial

ADR organization for disputes between customers and financial instruments service providers. FINMAC evolved out of

the previous “Securities Mediation and Consultation Center”, which was an internal organ of JSDA.

The previous organization accepted complaints and consultations from customers about operations performed by

Association Members and conducted “mediation” between member firms and their customers to solve disputes concerning

securities businesses operated by the members. After migrating to FINMAC, the above mentioned services are being

offered through contracted based business operators such as members of Financial Futures Trading Association, Investment

Trust Association, JSDA, Japan Commodities Investment Sales Association and to the Specific Business Operators

(individually registered Type 2 financial instruments business operators, etc.)

7 Kazakhstan FSC There is the Commission on Disputes and Conflicts Resolution on KASE, which considers dispute cases between

Securities Firms and Customers.

Also there is Financial Institutions’ Association of Kazakhstan with whom NBK discuss projected bylaws, before

approval.

8 Korea KOFIA KOFIA operates a Dispute Resolution Office that offers investors information and advice about the laws and regulations

governing financial investment products. The office provides advisory service to help investors address every possible issue

they may confront.

9 Laos LSCO Dispute relating to securities shall be resolved by any of the following steps:

1) Negotiation by parties;

2) Resolution by the LSCO;

3) Resolution by the Economic Dispute Resolution Center;

4) Resolution by the People’s Court;

5) International resolution method.

10 Mongolia MASD The Securities Market Law introduces a dispute resolution body at the FRC to resolve disputes among regulated entities,

issuers, investors and/or customers. This introduces a non-judicial dispute resolution mechanism which may offer benefits

in terms of efficient and fast dispute resolution determined by experienced market professionals. The law stipulates:

1. The Commission shall have a Dispute Resolution Board authorized to settle disputes between the regulated persons,

securities’ issuers, investors and clients, and the Commission shall determine the methods of operation and

composition of the Board.

2. The Dispute Resolution Board shall review the dispute and present the relevant proposed decision to the

Commission’s meeting. The Commission shall decide on one of the following:

to approve the opinion;

to change the opinion; or

to return the opinion of the Dispute Resolution Board for re-examination.

In 2016, the FRC developed a Regulation on the securities market Dispute resolution board’s operations which provides

clear procedures of dispute settlement between the regulated entities and investors. Also, MASD as a SRO has approved

its rule on monitoring and settlement of disputes in March 2016.

11 Myanmar SECM nil

12 Nepal SEBON SEBON accepts complaints and grievances from customers about securities firms through “Grievance & Investigation

subsection”. The dispute of general investors is resolved from telephone and/or written directives. Serious disputes have

been resolved through lawful action from the Legal Enforcement Section.

13 Singapore SAS If the customer complains to SGX about a member firm, SGX may conduct an investigation if the circumstances warrant

it.

If customer feels aggrieved, he has the option to appeal to the Financial Industry Disputes Resolution Centre Ltd

(FIDReC), which is an independent and impartial institution specialising in the resolution of disputes between financial

institutions and consumers. FIDReC subsumes the work of the Consumer Mediation Unit (CMU) of the Association of

Banks in Singapore and the Insurance Disputes Resolution Organisation (IDRO).

FIDReC provides an affordable and accessible one-stop avenue for consumers to resolve their disputes with financial

institutions. It also streamlines the dispute resolution processes across the entire financial sector of Singapore.

FIDReC provides an affordable avenue for consumers who do not have the resources to go to court or who do not want to

pay hefty legal fees. It is staffed by full-time employees familiar with the relevant laws and practices.

FIDReC was initiated by the financial sector to make its services more professional, transparent, customer focused and

service oriented. It was officially launched on 31 August 2005 by Mr Heng Swee Keat, then Managing Director of the

Monetary Authority of Singapore.

Dispute Resolution Process

The dispute resolution process of FIDReC comprises 2 stages:

- Mediation (1st Stage)

When a complaint is first received, it is case managed by FIDReC's Case Manager. The consumer and the financial

institution are encouraged to resolve the dispute in an amicable and fair manner.

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No. Market Name of

Organization

Dispute Resolution System between Securities Firms and Customers

- Adjudication (2nd Stage)

Where the dispute is not settled by mediation, the case is heard and adjudicated by a FIDReC

Adjudicator or a Panel of Adjudicators. Member firms pay an adjudication case fee of $500 when their cases proceed for

adjudication, while a nominal fee of $50 is paid by the consumers.

14 Sri Lanka SECSL If an investor has a complaint against a Stockbroker Firm in respect of dealings in Securities such investor shall, in the first

instance, refer same in writing to the Compliance Officer of the Stockbroker Firm within a period of 3 months from the

date of the disputed transactions. The Compliance Officer shall deal with the complaint and shall ensure that it is resolved

expeditiously and satisfactorily.

If the investor is not satisfied with the decision taken by the Stockbroker Firm, the investor may refer the complaint to the

CSE.

The complaint shall be dealt with by the officer appointed by the CEO of the CSE to deal with such complaints and the

decision of the officer shall be conveyed to the investor and/or Stockbroker Firm in dispute, as appropriate. If a party is not

satisfied with the decision, such party may appeal, within a period of 21 days from the date of the decision, to the Dispute

Resolution Committee for an adjudication of the decision.

15 Taiwan TSA (1) Disputes arising from business related to securities between TSA’s members and investors, or between members will

be mediated by TSA’s Discipline Committee. In some cases, TSA may select members having expert knowledge in

laws, accounting or securities to settle the dispute.

(2) According to the Securities Investors and Futures Traders Protection Act, which became effective on January 1, 2003,

the Securities and Futures Investors Protection Center is an organization set up under the Act to provide consultation

on the trading of securities and futures as regulated by related laws and regulations; mediation of disputes arising from

the trading of securities and futures; and litigation services on behalf of investors. In addition, the Center manages a

protection fund to compensate investors if a securities or commodities firm is unable to do so due to financial

difficulties.

(3) Promulgated on June 29, 2011, Financial Consumer Protection Act is specifically enacted to protect the interests of

financial consumers. In order to handle financial consumer disputes, “Financial Ombudsman Institution (FOI)” a

financial mediation organization was newly established in January of 2012.Financial consumers may deal with a dispute

by filing a complaint with the financial services enterprise, such as securities firms.

16 Thailand 1 ASCO Securities companies must provide written work procedures to cover client complaints. The procedures must be clearly

stated and fair to clients. For verbal complaints, securities companies must record the complaint in writing and require the

client’s signature. Upon receiving a complaint, a company must resolve it without delay and notify the client and the SEC

of the result. If the complaint is complicated, the company shall notify the client periodically of any progress, because a

complicated complaint can take more time to resolve. Companies shall review all client complaints to find the causes. If

the complaints come from inefficiencies in service or control, the companies shall improve the quality and control of their

operating systems. Companies are required to keep all client complaints, and all supporting documentation, for at least two

years from the settlement date.

Arbitration is a disputed settlement procedure whereby the disputed parties agree to be bound by the arbitrator’s decision.

SEC facilitates disputed settlement by means of arbitration between investors and intermediaries (e.g., securities firms,

selling agents of foreign shares, mutual fund supervisors, private fund custodians and derivatives business operators).

17 Thailand 2 ThaiBMA In case of bond trading disputes between members or between members and its client, the parties may seek arbitration

proceeding or mediation provided by ThaiBMA. Panel of Arbitrators shall be appointed for this matter.

18 Turkey TCMA Investors in the Turkish capital markets can always resort to courts for all complaints.

However, if the customer prefers alternative dispute resolution methods, the procedure is determined according the nature

of the complaint.

- If the complaint relates to exchange transactions, the customer can resort to the exchange (Borsa İstanbul). The dispute

resolution method is similar to arbitration. The customer can decide to go to the court at any stage. The decision taken by

the exchange is binding for the parties. Appeals on the Borsa İstanbul decisions can be made to the Capital Markets Board

(CMB). CMB decisions can be appealed to administrative courts.

- If the complaint relates to off-exchange disputes, the customer can resort to the TCMA. TCMA offers two alternative

dispute resolution methods; arbitration and mediation.

Arbitration: If the related parties agree to do so, arbitrators are chosen from TCMA’s list of arbitrators. The decision is

binding. Appeals against arbitrators’ decisions can be made to the Court of Appeals. Rules and organization of arbitration

is currently being revised.

Mediation: TCMA helps the parties in solving complaints. TCMA mediation decisions are not binding.

- The CMB is not directly involved in customer complaint resolution. However, in case an investor reports a

complaint, CMB may initiate an inspection.

19 Vietnam1 VASB The dispute resolution system between securities firms and customers hasn’t been established yet in Vietnam. However, as

a dispute arises between securities and customers, the stock exchange (HSX & HNX stock exchange) will be the reconciler.

If this mediation is failed, the SSC’s inspector will be involved; in case of unresolved problem, each party may appeal to a

competent court.

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No. Market Name of

Organization

Dispute Resolution System between Securities Firms and Customers

20 Vietnam2 VBMA Currently there are no dispute resolution systems as such in place. However, there were precedents that the parties

requested VBMA to act as mediator. VBMA will provide mediation in accordance with Mediation Rules of VBMA.

21 Asian Region ASIFMA n/a

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III –7. Investor Education Activities

No. Market Name of

Organization

Investor Education Activities

1 China SAC Steering the Industry to Provide Investor Education and Service

SAC has carried out the professional assessment of investor education and service of the industry on a yearly basis, steering

the industry to protect the lawful rights and interests of investors and increase the level of service to investors.

Organizing Public Interest Activities Related to Investor Education and Service

SAC has organized public interest activities, including securities quizzes for investors, series of speeches on investor

education and service and online contest of public interest advertisement concerning the securities industry. SAC carried

out publicity activities in collaboration with media including newspapers, magazines and websites, resulting in the online

participation of a total of several million people in a wide range of activities organized by SAC.

Producing and Promoting Investor Education Programs

SAC has produced several cartoon programs on investor education including “How to Make an Investment”, “Typical

Cases of Rectifying Illegal Securities-related Activities” and “Case Study on Investment Risks”, totaling more than 60

episodes. These programs have been broadcasted by CCTV, local TV stations and comprehensive video websites and other

media. SAC has produced more than 10 different investor education brochures including the “Securities ABC”, the

“Introduction to Investor Education Overseas”, the “Manual for Case Study on Investment Risks” and the “Typical

Casebook of Rectifying Illegal Securities-related Activities”. A total of over 6 million brochures have been distributed.

Rectifying Illegal Securities-related Activities Performed via the Internet and other Media

SAC drafted and issued the “Guidelines for the Participation of Members of Securities Association of China in the

Rectification of Illegal Securities-related Activities Performed via the Internet and other Media”, and specified the work

responsibilities and mechanism of SAC and its members when rectifying illegal securities-related activities. These measures

have played a positive role in protecting the interests of investors and purifying the market environment.

2 Hong Kong HKSA SFC set up Investor Education Center (IEC) in 2012, with a hope that IEC will provide a source of education to the public

investors, about kinds of risks involved in the financial market, about financial products available in the market, about

making investment decisions, etc. SFC/IEC normally educates the public by means of TV ads, seminars, print-outs and

so on, to arouse the awareness of associated markets risks.

3 India 1 ANMI The association conducts from time to time investor education and financial literacy programs. Soon we will collaborate

with SEBI for a comprehensive move on investor literacy programs aimed at the emerging classes of investors from schools

and colleges.

4 India 2 BBF Our association has conducted more than 700 Investor Education Activities and trained around 35000 participants.

5 Indonesia APEI OJK conducted national survey on financial literacy in the first half of 2013. The survey result is as follows:

Not

Literate

Less

Literate

Sufficient

Literate

Well

Literate

Utilization

Index

Knowledge Knowledge Knowledge

Confidence Confidence

Skills

Financial Services Industry 0.41% 2.06% 75.69% 21.84% 59.74%

Banking 0.73% 2.04% 75.44% 21.80% 57.28%

Insurance 39.80% 0.68% 41.69% 17.84% 11.81%

Multi-Finance 72.10% 0.21% 17.89% 9.80% 6.33%

Pawnshop 45.44% 0.83% 38.89% 14.85% 5.04%

Pension Fund 81.03% 0.11% 11.74% 7.13% 1.53%

Capital Markets 93.79% 0.03% 2.40% 3.79% 0.11%

Source: National Strategy on Financial Literacy

The study identified the low awareness as one of the main reasons on the low percentage of local investors in the capital

market.

In order to increase the number of investors in the capital market and to increase investor knowledge of the mechanisms

associated with transactions in capital market, OJK, IDX, APEI and it’s members regularly conducts investor education and

financial literacy programs in the form of seminars, workshops, training program, gathering, etc. The activities held in

public places including malls and universities include :

Socialization/education of capital markets to public, prospective investors and Students

Development of capital market information centers in rural and urban areas

Study of the characteristics of investors conducted on an ongoing basis

IDX and exchange members conduct Regular Education Program to arouse public interest in learning stock investment and

to attract new investors: retails and institutions. The education program is divided into three levels :

1. Basic Education Program is the level for participants with less knowledge of stock investment

2. Intermediate Education Program is the level for participants who have completed the Basic level and are

interested to learn more on stock investment

3. Advance Education Program is the level for participants who have completed the Intermediate level and are

interested to learn more about the other investment instruments in capital market.

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No. Market Name of

Organization

Investor Education Activities

To reach all parts of Indonesia, IDX made several approaches to the public.

1. One of them is through the establishment of the Capital Market Information Center (PIPM) in remote regions of

Indonesia.

2. To introduce the Capital Market as early as possible to the academic world, The 3 in 1 IDX Representative

offices (co-operation between IDX, University and Security Company) are established in the universities so that

the academic can learn about the Capital Market.

6 Japan JSDA Currently, Japan envisages the following issues;

1. Need to change money flow from savings to investment

2. Continued low interest rates in a mature economy and growing difficulty to build wealth through deposits and savings

3. Growing concerns about public pension system in an aging society

4. Complex financial products supplied through various sales channels (unexpected losses, financial fraud, etc.)

Under these circumstances, JSDA acknowledges the increasing need for upgrading financial literacy among Japanese

citizens and has been conducting investor education activities as mentioned below;

• Support school teachers by providing experience-based teaching materials, education programs and information

magazines, and holding seminars

• Set up websites for teachers and students

• Support securities research activities by university students

• Offer donated courses on securities through the Open University of Japan

• Hold “Investment Day” commemorative events

As a member of the International Forum for Investor Education (IFIE), JSDA participated in its annual conference in

Istanbul in June, 2016 and exchanged views with the members and relevant parties.

7 Kazakhstan NBK One of the current goals of NBK is to increase the demand on capital market among the individual investors.

In 2007, Government approved the Program of increasing the investment culture and financial literacy of population of

Kazakhstan on 2007-2011 years.

It gave good results. For example, in 2011-2012, the number of individual investors increased from 10 to 50 thousand

people.

In 2016, Government approved a new program of increasing the investment culture and financial literacy of population of

Kazakhstan on 2016-2020 years. The main purpose of the program is increase the number of individual investors to 160

thousand people. As of October 1, 2016, the number of individual investors increased more than 100 thousand people.

8 Korea KOFIA KOFIA consistently strives to protect the rights and benefits of investors through education, working to improve the

current financial system and develop policy recommendations.

KOFIA led the establishment of the Korea Council for Investor Education (KCIE) in 2005 to facilitate investor education

initiatives, and is currently serving as the secretariat.

The KCIE is a non-profit organization specializing in financial education, established by a consortium of five capital

market institutions – the Korea Financial Investment Association, Korea Exchange, Korea Securities Depository, Korea

Securities Finance Corporation, and Koscom. In addition, the Financial Services Commission (FSC) and Financial

Supervisory Service (FSS) are special members.

The KCIE provides life-long education courses to the general public by offering a practical curriculum to support their

financial well-being. Courses are geared toward a wide range of individuals, including teenagers, university students,

employees, housewives, the elderly, and people with special vocations, such as certified labor attorneys and tax office

workers.

Education programs come in various forms, including collective classes, online courses, mobile apps, and printed

publications. In 2013, the Council released a U-Learning application named “Master of Wealth Management,” which

enables the general public to easily access financial education courses from a mobile device. Moreover, in 2014, the

Council created a musical for financial investment education, which was performed at schools, and produced webtoons

that make learning about finance and asset management easy and fun.

Meanwhile, the KCIE is actively involved in strengthening financial education in schools to facilitate financial education

at an early age. It has been working to develop financial education for young students in cooperation with school boards

in major cities across the country, designating 100 schools as providers of financial courses.

In December 2011, the KCIE opened the state-of-the-art Financial Village, where the general public can learn about

finance in fun, easy and effective ways. Content is delivered through state-of-the-art technology, such as tablet PCs, large

multi-touch screens and media tables. The Village cemented its position as the premier hands-on financial education

facility in Korea, as it attracted 11,482 visitors during the year 2015.(2016.1.1 ~ 8.31 : 10,625)

9 Laos LSCO In order to enhance public understanding on Lao Capital Market, one of current priority tasks of LSCO is to provide training

and education to investors and market participants on securities law and regulations as well as on securities investment. To

achieve the above objective, various methods have been used by LSCO including training and educating via newspapers,

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No. Market Name of

Organization

Investor Education Activities

broadcasting through the national radio and television; on-site education at schools, hospitals, institutes and government

organizations and, etc.

10 Mongolia MASD MASD promotes investor education on securities and securities market to the public, potential issuers, retail investors,

journalists, university students as well as other market participants through conference, seminar/workshop and training

activities. This October we have organized an open discussion “One Goal – One solution” organized in collaboration with

the FRC, MSE and JICA. High level officials including the Prime Minister and Parliament members, professional

participants, foreign and domestic investors, public and private companies’ representatives, altogether more than 400 people

took part in this event. Joint recommendations for advancing the capital market in Mongolia were developed and delivered

to the policy makers.

Also, some securities firms, accredited individuals have their own short term training programs, websites, Facebook pages

and online education materials for the general public. MSE also provides regular weekly training about the market

(http://mse.mn/content/list/1/0#) since 2005 and has started operating of a special helpline 1900-2475 (works only during

business hours) to answer public queries about securities from October 2016.

11 Myanmar SECM SECM is encouraging Yangon Stock Exchange and securities companies to hold investor seminar.

12 Nepal SEBON SEBON has conducted the following investor education activities:

● A separate section for investor education is established in SEBON;

● Investor awareness programs conducted in different parts of the country;

● Development of educational materials like booklet, pamphlets and leaflets;

● Distribution of educational materials in street awareness program and some other programs; and

● Training program for economic journalists, teachers and students in different aspects of securities market.

13 Singapore SAS Investor Education Activities are conducted mainly through the following channels:

● Online portals – SGX, SAS and ABS have jointly set up two e-learning portals for investors to learn various

investment products at their own pace. The Customer Account Review (CAR) e-learning portal hosted by SGX allows

investors to provide information such as education and professional qualifications, work and investment experience, to

enable broking firms to access whether their customers have the relevant knowledge and experience to trade in SIPs.

The Customer Knowledge Assessment (CKA) e-learning portal guides and assesses investors on unlisted SIPs while

the CAR guides investors on listed products. Other than IBF, SGX Academy is another training avenue for trading

representatives.

More information on CAR & CKA

CAR and CKA are assessment tests which customers have to undergo before they are allowed to trade more complex

products which contain derivatives. To protect retail customers, the Monetary Authority of Singapore (MAS) has

categorized such products as Specified Investment Products (SIPs). SIPs may or may not be listed on an exchange.

Not all consumers have the knowledge or experience to assess an SIP's complex features. To help retail investors and

financial institutions better gauge investors' understanding of SIPs, financial institutions are required from 1 January

2012 to conduct a Customer Knowledge Assessment (CKA) if a customer wishes to transact in an unlisted SIP, and a

Customer Account Review (CAR) if he wishes to open an account to trade SIPs listed on an exchange.

● SGX Academy conducts training seminars for investors, ranging from beginner, intermediate to professional level.

● Member companies also organized regular training workshops (self or SAS-SGX funded) for their customers. Member

companies also participated in large-scale Investment Fairs, sometimes organized by MoneySense , SGX or Securities

Investors Association of Singapore (SIAS) or shareinvestor.com.

● MoneySense is the national financial education programme for investors in Singapore. Launched in 2003, the

programme aims to enable consumers to become more self-reliant in their financial affairs. It does this by helping

consumers acquire the knowledge and skills to manage their day-to-day finances, make prudent investments, plan for

their longer-term needs and exercise their rights as consumers of financial services. This, in turn, serves the twin

objectives of helping consumers to attain financial well-being and consumer protection.

14 Sri Lanka SECSL The SEC undertakes extensive investor education programmes to raise investor awareness on the benefits and risks

associated with investing in the capital market as well as provide investors with the requisite skills, knowledge and tools to

make informed investment choices.

- “Going Public” Television Series on Capital Formation

The first ever one hour pre-recorded television programme titled “Going Public” comprising of 13 episodes was

telecast on MTV Sports on Sundays at 10 a.m. from February to May 2014 to educate the corporate sector and top

business executives of potential listed companies on listing on the CSE.

- “Ayojana” Radio Programme A live radio chat show titled “Ayojana” comprising of 18 programmes was facilitated

by the SEC and aired on Lakhanda Radio on Sundays at 9.00 a.m. from May to August 2014.

- “Danno Dinanno” Reality Quiz programme The SEC and the Colombo Stock Exchange (CSE) together with Sirasa

TV successfully conducted a television Quiz programme titled “Danno Dinanno” comprising of 12 programmes to

disseminate comprehensive knowledge on investing in the stock market as well as unit trusts.

- Awareness through print media

The SEC published more than 250 weekly/monthly newspaper articles pertaining to the capital market during the

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No. Market Name of

Organization

Investor Education Activities

year in Daily Mirror, Ada and Thinakural.

- Awareness through Seminars and Forums Capital Market Conference 2014 The SEC in partnership with the CSE

conducted a capital market conference on 9th October 2014 at the Cinnamon Lakeside Hotel with approximately

400 local and foreign participants.

15 Taiwan TSA 1. Subsidizing personal investment and finance literacy knowledge classes hosted by non-finance faculty in tertiary

education institutes. A total of 23 lectures had their proposals approved in 2010 (9 were sponsored by TWSE and 2

were sponsored by GTSM); a total of 1,657 non-finance faculty student attended general knowledge classes.

2. Giving speeches of correct investment and finance concepts to secondary education institutes. TSA accepted

applications from secondary education institutes to appoint qualified lecturers to promote correct investment and

finance concepts to secondary education students. For the year 2010, a total of 2,078 students from five schools

participated.

3. Publishing investment and finance promotional material, TSA has put together the “Securities and Me” and “Explore

Securities Market” promotional booklets, which were published in 2011.

16 Thailand 1 ASCO Essential functions of investor education activities is Capital Market Development Function (CMDF) operated by Thailand

securities institute (TSI) which elaborates full ranges of its investor education activities especially for those directed at

youth, school, university and vocational students, and the general public. The programs contain curriculum, including train-

the–trainer, teacher development and activity-based education. Program resources cover student and teacher manuals, e-

learning, various books, games, and media such as Money Channel.

SET in the City

SET in the City, a one-stop investment expo organized by the Stock Exchange of Thailand. Participation is by the

SET's members, partners and alliances in the capital market, ranging from financial institutions, listed companies, securities

companies, asset management companies and insurance companies to associations with teams of experts.

The central themes of this financial conference will be enhancing knowledge of the economic situation in Thailand

under the current volatility and political factors that affect the economy and investment. This event will be presented in the

form of seminar/discussion and advice from experts to provide information, suggestions and answers for investors.

17 Thailand 2 ThaiBMA ThaiBMA regularly organizes free seminars for both retail and institutional investors. Advanced training courses in the area

of bond and financial market are also offered to professionals in the bond market at minimal cost. (for more details:

http://www.thaibma.or.th/EN/Training/SeminarCourse.aspx)

Besides, as part of ThaiBMA’s role in promoting investor education, ThaiBMA has conducted several activities related to

investor education including;

- Establish website to provide bond market information in both primary and secondary markets for investors through

www.thaibma.or.th and www.thaibond.com

- Develop “Bond Supermart” to provide indicative bid/offer of government and corporate bond quoted by active dealers

for retail investors.

18 Turkey TCMA TCMA is forming an industry wide Financial Education Working Group to coordinate efforts on financial education

Experts from Borsa Istanbul, the Capital Markets Board and the TCMA visit several universities in order to create

and increase the awareness of capital markets among university students.

TCMA is running a financial education campaign mainly on social media under the “My Money and I” brand. In

addition panels, a photography competition, a short-film competition, a theatre show for school children, and an e-

learning program were organised

19 Vietnam1 VASB - The security market is a subject teaching in the universities of economics.

- Securities firms have organized the periodic seminars of the security market and published company reports, market

commentaries, macro updates.

- The securities training programs are organized by the Securities Research and Training Center of the State Securities

Commission (SSC) and the training establishments approved by the SSC.

20 Vietnam2 VBMA - Quarterly, The Dialogue between Regulators and VBMA members and non – members is organized. The Dialogue is a

communication channel between regulators and market players. At the Dialogue, The Regulators popularize new

policies to the market players and the market players update the market situation to the Regulators.

- The Investor Guide is under the preparation and will be published soon

- To help the reporters to understand about the whole picture of the bond market and its operation that help them in writing

the news for the media, a training seminar was organized for the reporters.

- The basic and advance training for member is organized.

- The Investors Conference is also organized yearly.

21 Asian Region ASIFMA n/a

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IV. Market Structures

IV – 1. Breakdown of Financial Assets held by Household Account

No. Market Name of

Organization

Breakdown of Financial Assets held by Household Account

1 China SAC In China,nearly 76% of financial assets were allocated in savings and money market, while 19% in the stocks and funds,

and other types of financial products share even more lower proportion.

2 Hong Kong HKSA Data not available.

3 India 1 ANMI Changes in Financial Assets/ Liabilities of the Household Sector (At Current Prices)

(₹ Billion)

Year Currency Bank

deposits

Non-

banking

deposits

Life

insurance

fund

Provident

and

pension

fund

Claims

on

Govern-

ment

Shares &

debent-

ures

Units of

UTI

Trade

Debt

(Net)

Changes in

financial

assets (2 to

10)

1 2 3 4 5 6 7 8 9 10 11

1975-76 3.42 21.20 1.30 4.23 12.24 8.99 0.41 0.16 -1.28 50.67

1976-77 11.40 39.20 1.14 5.24 11.72 0.19 -0.05 0.20 -2.53 66.51

1977-78 7.03 35.21 2.27 5.92 13.16 3.25 2.01 0.34 2.35 71.54

1978-79 14.30 46.26 2.32 6.83 16.05 2.27 2.04 0.79 3.97 94.83

1979-80 13.32 46.59 4.77 7.73 17.48 5.31 2.53 0.41 4.35 102.49

1980-81 16.25 55.50 3.78 9.15 21.22 7.12 4.12 0.31 3.73 121.18

1981-82 9.65 51.94 8.94 10.37 24.80 17.84 5.10 1.14 6.43 136.21

1982-83 20.26 66.61 8.70 12.35 28.65 12.43 6.46 1.22 4.29 160.97

1983-84 27.76 79.78 10.19 13.76 30.52 19.76 5.55 2.22 -1.64 187.90

1984-85 29.38 98.59 9.60 15.56 37.59 31.07 7.62 5.67 0.41 235.49

1985-86 22.20 106.03 14.23 17.79 41.88 34.13 13.94 5.86 -0.44 255.62

1986-87 30.90 145.10 15.12 21.59 50.55 30.92 17.68 9.43 -2.80 318.49

1987-88 48.15 146.74 13.26 25.89 65.09 36.80 8.13 11.96 5.04 361.06

1988-89 42.56 147.47 15.80 34.23 75.52 54.78 11.36 14.27 3.59 399.58

1989-90 76.55 139.87 18.39 44.15 95.08 67.58 26.55 21.79 -7.63 482.33

1990-91 62.51 187.77 12.86 55.99 111.55 78.83 49.72 34.38 -4.53 589.08

1991-92 81.57 178.48 22.18 70.03 125.01 48.45 68.00 90.87 -4.14 680.45

1992-93 65.62 295.18 60.35 71.14 148.14 38.85 82.12 56.12 -13.98 803.54

1993-94 133.67 362.36 116.54 95.48 183.23 69.08 100.67 47.05 -11.90 1096.18

1994-95 159.16 558.35 115.47 113.70 214.14 131.86 134.73 39.08 -11.48 1455.01

1995-96 165.25 399.41 131.98 138.94 223.43 95.88 88.39 2.62 -2.52 1243.37

1996-97 136.43 509.02 259.80 161.21 303.90 117.83 66.31 37.76 -7.08 1585.19

1997-98 127.80 740.99 67.33 194.10 322.67 221.62 44.64 5.95 -7.70 1717.40

1998-99 218.22 794.33 76.70 234.28 464.08 282.20 51.05 18.87 -68.70 2071.03

1999-00 208.45 828.92 38.44 286.44 539.07 289.85 163.08 18.11 -10.23 2362.13

2000-01 156.32 947.09 30.04 338.61 508.63 390.07 111.48 -9.34 1.83 2474.75

2001-02 281.56 1130.33 -3.47 412.37 442.23 519.38 98.34 -18.57 -1.83 2860.34

2002-03 286.32 1226.97 124.96 520.09 459.46 560.87 71.23 -16.18 0.00 3233.72

2003-04 426.75 1559.34 19.45 522.40 489.52 873.72 90.78 -85.86 -1.37 3894.73

2004-05 369.77 1750.45 0.83 679.86 557.94 1064.20 81.13 -31.46 -1.07 4471.65

2005-06 521.51 2657.16 5.22 834.94 619.50 871.68 338.57 -4.44 -2.22 5841.92

2006-07 671.94 4292.82 45.84 1148.51 725.03 191.98 508.47 -3.10 65.23 7646.71

2007-08 812.78 3890.08 12.86 1698.48 715.44 -283.27 743.08 -3.24 137.65 7723.85

2008-09 921.88 4178.33 147.42 1528.61 733.98 -275.51 -23.33 -27.37 84.88 7268.89

2009-10 969.40 3981.41 185.16 2598.21 1298.49 434.75 448.41 0.00 -17.84 9897.98

2010-11 1371.31 5482.99 50.99 2101.02 1411.39 295.45 17.29 0.00 68.23 10798.67

2011-12 1062.42 5259.70 100.21 1956.73 956.80 -218.89 165.22 0.00 45.09 9327.28

2012-13 1115.21 5750.80 279.11 1799.49 1564.79 -71.09 170.27 0.00 31.83 10640.41

2013-14 995.20 6481.37 217.07 1839.60 1901.75 84.38 425.03 0.00 48.38 11992.78

2014-15 1341.10 5932.96 332.57 2481.61 2049.92 9.75 532.72 0.00 41.77 12722.40

2015-16 2005.52 6158.90 403.49 2725.38 2111.39 535.56 917.63 0.00 40.66 14898.53

(Continued)

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No. Market Name of

Organization

Breakdown of Financial Assets held by Household Account

CHANGES IN FINANCIAL ASSETS / LIABILITIES OF THE HOUSEHOLD SECTOR (At Current Prices)

(Concld.)

(₹ Billion)

Year Bank advances

Loans &

advances from

other financial

institutions

Loans &

advances from

Government

Loans &

advances from

co-operative

non-credit

societies

Changes in

financial liabilities

(12 to 15)

1 12 13 14 15 16

1975-76 8.99 0.78 0.67 0.25 10.69

1976-77 12.32 0.87 1.18 0.19 14.56

1977-78 14.81 1.25 0.95 0.10 17.11

1978-79 21.25 3.52 1.81 0.80 27.38

1979-80 28.68 3.93 1.97 0.93 35.51

1980-81 30.93 1.82 1.51 0.82 35.08

1981-82 35.07 2.44 1.48 1.34 40.33

1982-83 29.46 3.49 1.33 1.03 35.31

1983-84 44.69 4.60 2.03 1.06 52.38

1984-85 50.02 4.20 1.97 1.14 57.33

1985-86 60.43 6.46 2.05 0.89 69.83

1986-87 73.45 5.22 4.35 2.08 85.10

1987-88 81.59 5.55 3.47 2.26 92.87

1988-89 114.36 7.13 4.74 2.03 128.26

1989-90 83.03 10.53 7.47 0.85 101.88

1990-91 74.29 11.54 6.11 0.73 92.67

1991-92 36.89 15.51 4.69 2.88 59.97

1992-93 114.21 28.97 4.43 2.95 150.56

1993-94 119.72 18.67 7.10 3.10 148.59

1994-95 216.18 24.09 4.17 3.26 247.70

1995-96 156.05 23.98 2.75 3.42 186.20

1996-97 136.75 25.93 2.29 3.60 168.57

1997-98 198.85 42.03 4.88 3.43 249.19

1998-99 207.93 46.88 9.44 3.48 267.73

1999-00 298.59 46.31 12.27 3.50 360.67

2000-01 254.39 47.41 13.19 2.80 317.79

2001-02 433.54 68.78 11.11 3.84 517.27

2002-03 543.88 52.47 2.16 4.23 602.74

2003-04 578.85 122.61 -2.69 1.05 699.82

2004-05 1119.71 83.10 -5.15 3.04 1200.69

2005-06 1755.64 83.98 -4.89 2.77 1837.50

2006-07 2736.66 93.62 -6.50 2.29 2826.06

2007-08 1795.02 86.82 -2.48 2.45 1881.81

2008-09 1547.35 88.12 -1.99 2.50 1635.98

2009-10 1944.43 88.99 -1.47 2.52 2034.48

2010-11 2690.10 88.04 -0.99 2.60 2779.75

2011-12 2725.09 173.10 3.01 2.57 2903.77

2012-13 3087.47 215.10 1.68 2.57 3306.82

2013-14 2927.30 492.27 6.51 1.95 3428.03

2014-15 2605.05 591.03 6.06 1.95 3204.09

2015-16 3544.15 657.22 9.22 1.97 4212.56

Notes : 1. Data for 2013-14 and 2014-15 are provisional and that for 2015-16 is based on preliminary estimates.

2. Deposits with co-operative non-credit societies are included in bank deposits up to 1999-00. Since 2000-01,

these deposits are included in non-banking deposits.

3. Life Insurance Fund includes Central or State Governments employees' insurance funds and postal insurance

funds.

4. Owing to changes in coverage of non-banking deposits, data prior to 1997-98 are not strictly comparable with

those of 1997-98 and onwards.

5. Shares and Debentures include investment in shares and debentures of credit / non-credit societies and

investment in mutual funds (other than Specified Undertaking of the UTI).

6. Since 2005-06, the data shown under 'Units of UTI' pertain to Administrator of the Specified Undertaking of the

UTI. The UTI Mutual Fund is included in 'Shares and Debentures'.

7. The sum of components of changes in financial assets do not add up to the total due to rounding off.

Also see Notes on Tables.

4 India 2 BBF 44 % by Fixed Deposits

28 % Life Insurance

22% Small Saving Deposits

3% Equity and Mutual Funds

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No. Market Name of

Organization

Breakdown of Financial Assets held by Household Account

5 Indonesia APEI n/a

6 Japan JSDA At March 31, 2016, the end of fiscal 2015, household financial assets amounted to ¥1,705.5 trillion, declining approximately

¥10.2 trillion or 0.6% from fiscal 2014. The financial assets of households had been growing amid the long spell of yen

depreciation and rising stock prices caused by the BOJ’s monetary easing policy. However, the financial assets of

households at the end of fiscal 2015 showed the first year-on-year decline for seven years, mainly due to the drop in stock

prices from August, reflecting concern over the slowdown in China and the impact of falling oil prices.

Looking at a breakdown, stocks and other equities decreased around ¥16.7 trillion, or 9.9% year on year, to ¥152.9 trillion,

and investment trusts fell ¥3.4 trillion, or 3.7% from last year, to ¥91.9 trillion. Cash and deposits, on the other hand,

expanded approximately ¥11.3 trillion, or 1.3%, to ¥893.5 trillion, continuing on from last year in posting another record

high on a year-end basis.

In terms of the composition of household financial assets, cash and deposits reached a record high as previously mentioned,

and the proportion of cash and deposits rose 1.0%, to 52.4%, exceeding the level of the end of the previous fiscal year for

the first time in five years. Conversely, the proportions of stocks and other equities and of investment trusts decreased 0.9%,

to 9.0% and 0.2%, to 5.4%, respectively.

The Composition of Financial Assets of Households (¥ trillion)

FY2013 FY2014 FY2015(E)

FY2015 (E)

(Amount)

Financial Assets of Household 1,638.4 1,715.7 1,705.5 1,705.5

Currency and deposits 52.8% 51.4% 52.4% 893.5

Debt securities 1.8% 1.6% 1.6% 27.0

Shares & Other Equities 9.2% 9.9% 9.0% 152.9

Investment trust beneficiary

certificates

4.8% 5.6% 5.4% 91.9

Insurance, pension and

standardized guarantees

29.9% 29.6% 29.9% 509.3

Others 1.6% 1.9% 1.8% 30.6

(source) Bank of Japan

7 Kazakhstan NBK n/a

8 Korea KOFIA The breakdown(%) of financial assets of households at the end of 2015 is as follows. (data from Bank of Korea)

cash and deposit 43.1

insurance and pension reserve 31.1

bonds 5.5

Stocks & funds 19.4

etc. 0.8

9 Laos LSCO The table below shows breakdown of financial assets held by both domestic and foreign individuals and entities in Lao

PDR.

Amount: Billion Kip

2010 2011 2012 2013 2014 2015

Currency Outside

Banks 3,799.92 4,843.88 6,019.73 6,489.73 6,316.00 5,879.65

Total Deposits 17,368.90 22,402.19 29,685.2 1 35,293.96 45,995.70 54,109.80

Source: Bank of the Lao PDR and Lao Securities Exchange

10 Mongolia MASD Currently no entity publishes such data in Mongolia. However, the nonbank financial sector constitutes less than 3 percent

of the total assets in the financial sector, with capital markets contributing less than 1 percent. The rest of the financial sector

is regarded to commercial banking sector. The MongolBank publishes monthly data on cash in banks and outside banks,

current accounts and saving deposits, but does not analyze by financial assets and households.

11 Myanmar SECM Data are not available.

12 Nepal SEBON 10 percent are institutional investors and 90 percent are general investors in Nepalese Capital Markets. 1.5 million people

(Estimated) are involved in securities transaction.

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45

No. Market Name of

Organization

Breakdown of Financial Assets held by Household Account

13 Singapore SAS Household Balance Sheet

(Yearly, Million dollars)

Household Balance Sheet – Financial Assets

(Yearly, Million dollars)

Global Ranking Net Capital Financial Assets

Source: Allianz Global Wealth Report 2016

14 Sri Lanka SECSL No specific information available at present.

Cf. Table below is the assets and deposits of financial institutions

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46

No. Market Name of

Organization

Breakdown of Financial Assets held by Household Account

15 Taiwan TSA Assets Structure for Households Sector In Taiwan (End of 2014)1

Assets, Base on final ownership

Amount

(NT$100 M =US$3.16M)

Composition

%

1.Net Physical Assets 481,469 43.64

Real Estate 444,095 40.25

Household's Equipment 37,374 3.39

2.Net Financial Asset 621,820 56.36

(1)Net Foreign Assets 64,480 5.84

(2)Net Domestic Financial Assets (A-B) 557,339 50.52

Domestic Financial Assets (A) 698,322 63.29

Cash and Demand Deposits 124,597 11.29

Time Deposits & Foreign Currency Deposits 150,019 13.60

Securities 179,457 16.27

Life Insurance and Pension Fund Reserves 182,006 16.50

Other Financial Assets 62,243 5.64

(Less) Domestic Financial Liabilities (B) 140,982 13.05

Loans 134,588 12.73

Other Financial Liabilities 6,394 0.58

3.Total Net Assets 1,103,289 100.00

Note:

Securities consists of government securities, domestic corporate bonds, bank debentures, mutual funds, shares and

other equities.

Other financial assets cover repurchase agreements, loans by nonfinancial institutions, short-term securities, accounts

receivable/payable and net other assets & liabilities.

https://www.dgbas.gov.tw/lp.asp?CtNode=3104&CtUnit=394&BaseDSD=7&mp=1

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47

No. Market Name of

Organization

Breakdown of Financial Assets held by Household Account

16 Thailand 1 ASCO

Savings and investments of households 1992-2016

Household savings and investments 2016

Note: 1. Mutual Fund NAV exclusive of Retirement utual Fund (RMF).

2. Retirement investments comprise- Provident Fund NAV, Government Pension Fund NAV, RMF NAV and Social Security

Fund NAV.

3. Household Deposits.

Sources : 1. Association of Investment Management Companies-Mutual Fund NAV, Private Fund NAV and Provident Fund NAV

2. The Government Pension Fund -Government Pension Fund NAV.

3. Social Security Office-Social Security Fund NAV.

4. Bank of Thailand - Deposits of households.

5. The Thai Life Assurance Association - Life Policy Reserves received on the annual life insurance report.

17 Thailand 2 ThaiBMA

Source: (1) Bank of Thailand, (2) ThaiBMA, (3) Association of investment management companies

Financial Asset Held by

Household (THB Trillion)2011 2012 2013 2014 2015

Cash Deposit 5.12 6.16 6.51 6.76 6.83

Government Bond 0.62 0.44 0.40 0.25 0.33

Corporate Bond 0.56 0.85 0.92 0.69 0.76

Mutual Funds 1.99 2.49 2.94 3.64 3.88

Private Funds 0.32 0.32 0.43 0.48 0.59

Retirement Funds & Pension Funds 1.98 2.23 2.44 2.75 2.79

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48

No. Market Name of

Organization

Breakdown of Financial Assets held by Household Account

18 Turkey TCMA

Financial Assets of Households

2015/03 2015/09 2016/03 2016/03

(Bn. $)

Cash 10% 10% 5% 16.9

TL Deposits 48% 47% 50% 155.1

FX Deposits 24% 26% 31% 97.1

Equities 5% 5% 5% 16.2

Mutual Funds 4% 4% 4% 11.5

Pension Funds 4% 5% 6% 18.1

Bonds/Bills-Eurobonds 3% 2% 2% 7.5

Precious Metals 2% 1% 1% 3.3

Repo 0% 0% 0% 0.1

Total 100% 100% 100% 325.5

Source: Central Bank of the Republic of Turkey

Deposits (TL and FX) are the major component of the financial assets representing 81% of household’s total savings. Total

deposits measure US$ 252 billion, as of end of first quarter of 2016.

19 Vietnam1 VASB n/a

20 Vietnam2 VBMA n/a

21 Asian Region ASIFMA n/a

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49

IV – 2. Share of Foreign Investors in the Stock Trading on the Exchange

No. Market Name of

Organization

Share of Foreign Investors in the Stock Trading on the Exchange

1 China SAC In 2015, there are more than 29,000 stock accounts belonging to foreign institutions, and more than 150,000 accounts for

overseas individuals.

2 Hong Kong HKSA a. Local investors included

b. local investors excluded

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No. Market Name of

Organization

Share of Foreign Investors in the Stock Trading on the Exchange

3 India 1 ANMI

FPI / FII Investment Details (Financial Year)

FPI Investments - Financial Year

Financial

Year

INR crores

Equity Debt Total

1992-93 13 0 13

1993-94 5,127 0 5,127

1994-95 4,796 0 4,796

1995-96 6,942 0 6,942

1996-97 8,546 29 8,575

1997-98 5,267 691 5,958

1998-99 -717 -867 -1,584

1999-00 9,670 453 101,22

2000-01 10,207 -273 9,933

2001-02 8,072 690 8,763

2002-03 2,527 162 2,689

2003-04 39,960 5,805 45,765

2004-05 44,123 1,759 45,881

2005-06 48,801 -7,334 41467

2006-07 25,236 5,605 30,840

2007-08 53,404 12,775 66,179

2008-09 -47,706 1,895 -45,811

2009-10 110,221 32,438 142,658

2010-11 110121 36,317 146,438

2011-12 43,738 49,988 93,726

2012-13 140,033 28,334 168,367

2013-14 79,709 -28,060 51,649

2014-15 111,333 166,127 277,461

2015-16 -14,172 -4004 -18,176

2016-17 ** 45,113 4395 49,508

Total 850,364 306,925 1,157,286

** upto 27-Oct-2016

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51

No. Market Name of

Organization

Share of Foreign Investors in the Stock Trading on the Exchange

4 India 2 BFF Same as ANMI

5 Indonesia APEI

6 Japan JSDA Market Shares & Trading Balance by Types of Investors―Tokyo, Nagoya―

Market Share Net Selling(-)/Buying(+)(¥billion)

2013 2014 2015 2013 2014 2015

Member Account 12.5% 13.0% 13.8% -585 288 1,558

Individuals 28.0% 23.3% 20.0% -8,750 -3,632 -4,999

Foreigners 50.8% 55.5% 58.4% 15,119 852 -250

Investment Trusts 1.5% 1.8% 1.8% 426 -210 242

Non-Financial

Companies 1.0% 0.9% 1.0% 629 1,101 2,963

Life & Non-life 0.2% 0.2% 0.2% -1,075 -503 -584

Citi BK & Regional BK 0.1% 0.1% 0.1% -282 -129 -309

Trust BK 3.1% 3.3% 3.2% -3966 2,784 2,007

Other Financial

Institutions 0.1% 0.1% 0.2% -468 8 260

Note: Figures up to and including the second week of July 2013 are the totals of the three markets of Tokyo,

Osaka, and Nagoya.

(Source) Japan Exchange Group

7 Kazakhstan NBK n/a

But there are some numbers about share of Foreign Investors in holding of securities.

As of Oct. 2016 (data from Central Depository)

Volume of securities, which

hold by residents, USD

Volume of securities, which hold by

non-residents, USD

Corporate securities 20 324 172 822 125 956 280

Government securities 29 060 318 458 2 458 982 910

Foreign securities 548 054 690 8 101 101

8 Korea KOFIA From Jan.1 to Dec.31, 2015 (data from Korea Exchange(KRX)

Sale Purchase Net purchase

Trading

volume(mil.

share)

Trading

value(bil.

KRW)

Trading

volume(mil.

share)

Trading

value(bil.

KRW)

Trading

volume(mil.

share)

Trading

value(bil.

KRW)

Total 112,903 1,327,229 112,903 1,327,229 - -

Foreign 8,702 343,015 8,526 338,582 -176.1 -4,432

% 7.51% 25.63% 7.37% 25.37% - -

9 Laos LSCO The foreign investment ratio of BCEL and EDL-GEN closed at a high 9.35% and 13.84% respectively which were close to

their holding limitation 10% and 25%, while the ratio of LWPC, PTL and SVN closed at 2.77% , 12.66% and 4.20%

respectively at the end of October 2016.

Remark: Limit of foreign holding ratio for BCEL: 10%, EDL-GEN: 25%, LWPC, PTL & SVN: 100%.

10 Mongolia MASD As of 2nd half of 2016, the total trade volume for both bond and stock was 98.6 billion of which only 0.03% was traded by

foreign investors. There is no segregated data available for stocks and bonds (MSE and CD do not publicly release such

data although they may have internal records). Below pls see FRC information on foreign and domestic investors share in

2006-2016Q2 (darker blue shows foreign investor share and the light blue is for domestic investors).

57.46% 57.97% 59.42% 56.79% 62.68%

42.54% 42.03% 40.58% 43.21% 37.32%

2012 2013 2014 2015 Oct-16

Foreign

Domestic

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52

No. Market Name of

Organization

Share of Foreign Investors in the Stock Trading on the Exchange

Percentage of foreign and domestic investors share

The reason for foreign investors’ share decrease from 2013 may have the following reasons:

foreign investment reduction on the whole due to unstable and unfavorable investment conditions;

change of systems caused some registration problems, i.e. during transit to MillenniumIT system some foreign

investors were automatically registered as domestic;

trading of Government bonds at the MSE had increased from end of 2014, and the main buyers are domestic banks and

retail investors.

11 Myanmar SECM Currently, foreign investors are not allowed in Myanmar market.

12 Nepal SEBON Nepalese capital market has not yet been opened to foreign investors but homework is underway for policy making.

13 Singapore SAS Not available

14 Sri Lanka SECSL

Foreign contribution to Total Market Turnover (%) 2015 2014 2013

Foreign companies (%) 33 26.0 34.3

Foreign individuals (%) 1.6 1.6 1.8

Total foreign investor contribution (%) 34.6 27.6 36.1

Foreign trading statistics 2015 2014 2013

Primary Market (Rs. Mn.)

Purchases (Rs. Mn.) 1.4 579.9 11,198.8

Sales (Rs. Mn.)

Net Foreign Flow (Rs. Mn.) 1.4 579.9 11,198.8

Secondary Market

Purchases (Rs. Mn.) 85432.0 104689.8 83607.0

Sales (Rs. Mn.) 89858.1 83550.8 60873.3

Net Foreign Flow (Rs. Mn.) (4426.1) 21139.0 22733.7

Total Net Foreign Flow

(Pri & Sec market) (Rs. Mn.)

(4424.7) 21,718.9 33,930.5

15 Taiwan TSA Highlights of Foreign Investment in Taiwan’s Stock Market Unit:US$100Million

Year

FINI FIDI Total Accumulated

Net Inward

Remittance

Percentage of Market

Value Held by

Foreign Investors

Accumulated Net

Inward

Remittance

Accumulated Net

Inward Remittance

2011 1,556.44 3.21 1,559.65 31.10%

2012 1,628.42 4.90 1,633.32 32.62%

2013 1760.37 4.76 1,765.13 33.14%

2014 1,920.78 3.66 1,924.45 36.43%

2015 1,934.81 3.36 1,938.17 36.69%

2016/09 2061.81 3.40 2065.21 39.15%

Note:

1. Each foreign institutional investor (FINI) is allowed to invest directly in the stock markets without an upper limit. The

maximum ceiling of foreign exchange settlement for each onshore and offshore overseas Chinese and foreigner is US$5

million; and US$50 million for each onshore judicial person.

2. The accumulated net inward remittance of FINI has been adjusted by incorporating QFII and GFII.

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53

No. Market Name of

Organization

Share of Foreign Investors in the Stock Trading on the Exchange

16 Thailand 1 ASCO Stock Market

In 2015, 59% of the total turnover came from retail investors, decreased from 62% in 2014 while proportion of foreign

investors increase to 22% from 20%, proprietary traders and local institutional traders had an equal share of 9%, As of

September 2016, the proportion of foreign investors rose to 26%, while the proportion of local retail investor slowdown to

53% of total turnover in the year of 2016.

Derivative Market

For derivative market, major player of the market is local investor which has proportion more than 50% of the total market,

whereas share of foreign investors range from 6% - 12% during past 6 years.

Investor Type 2010 2011 2012 2013 2014 2015 Sep-16

Local Institutions 32.7% 33.6% 38.9% 35.9% 35.6% 34.8% 36.1%

Local Investor 57.2% 60.0% 53.4% 56.0% 56.1% 53.6% 53.6%

Foreign Investor 10.1% 6.4% 7.7% 8.0% 8.3% 11.6% 10.3%

Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

17 Thailand 2 ThaiBMA The table below indicates the share of foreign investor in the Stock Exchange of Thailand (SET) by trading value (%) in

the past five years.

18 Turkey TCMA % in Free Float Mcap % in Trading Volume

2012 65.8% 18%

2013 62.5% 20%

2014 63.8% 20%

2015 62.4% 22%

2016/06 63.1% 26%

19 Vietnam1 VASB Trading statistics on the Ho Chi Minh Stock Exchange from Jan 1, 2016 – Oct 31, 2016

Stock Trading

in Exchange Market2011 2012 2013 2014 2015

2016

(Jan-Sep)

Domestic Investor * 77% 75% 77% 78% 76% 73%

Foreign Investor 23% 25% 23% 22% 24% 27%

Total Investor 100% 100% 100% 100% 100% 100%

* Domestic Investor = Local Institutes Investor + Local Retail Investor + Proprietary Trading

15.5%

84.5%

HOSE Trading Data Jan 1, 2016 - Oct

31, 2016

Foreign Trading Domestic Trading

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54

No. Market Name of

Organization

Share of Foreign Investors in the Stock Trading on the Exchange

HOSE Trading 2016

Month Foreign

Trading

Domestic

Trading

Oct-16 10.6% 89.4%

Sep-16 23.1% 76.9%

Aug-16 13.5% 86.5%

Jul-16 12.7% 87.3%

Jun-16 12.1% 87.9%

May-16 14.2% 85.8%

Apr-16 15.9% 84.1%

Mar-16 17.9% 82.1%

Feb-16 21.3% 78.7%

Jan-16 14.3% 85.7%

Source: HSX

20 Vietnam2 VBMA n/a

21 Asian Region ASIFMA n/a

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IV – 3. Share of Foreign Investors in the Bond Trading on Exchange/ OTC Market

No. Market Name of

Organization

Share of Foreign Investors in the Bond Trading on Exchange/ OTC Market

1 China SAC n/a

2 Hong Kong HKSA Data not available.

3 India 1 ANMI

Security -wise distribution of Debt Trades

Mon

&

Year

Volume

(In

Crores)

Volume

(In %)

Govt

Securities T-Bills

PSU /Inst.

Bonds Others

Total

Turnover

Govt

Secrt T-Bills

PSU /Inst.

Bonds Others

2011-12 3,24,867.28 1,39,518.71 1,19,903.04 48,889.56 6,33,178.59 51.31 22.03 18.94 7.72

2012-13 4,17,927.13 1,79,901.81 1,27,869.99 66,514.83 7,92,213.76 52.75 22.71 16.14 8.4

2013-14 3,53,256.88 2,78,814.49 1,54,646.10 64,716.14 8,51,433.61 41.49 32.75 18.16 7.6

2014-15 4,10,693.91 1,66,679.74 1,34,410.07 60,585.36 7,72,369.08 53.17 21.58 17.4 7.84

2015-16 3,20,149.41 1,01,725.52 94,346.18 53,273.56 5,69,494.67 56.22 17.86 16.57 9.35

4 India 2 BBF Same as ANMI

5 Indonesia APEI Corporate Bond – in Trillion IDR

Mutual Fund

72.94

25.66%

Pension Fund

70.98

24.98%

Financial Inst

60.62

21 .33%

Insurance

48.98

1 7.23%

Others

1 0.37

3.65%

Corporate

8.90

3.1 3%

Individual

6.98

2.46%

Foundation

3.67

1 .29%Securities

Company

0.79

0.28%

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No. Market Name of

Organization

Share of Foreign Investors in the Bond Trading on Exchange/ OTC Market

Government Bond – In Trillion IDR

Foreign

684.98

39.1 6%

Bank

368.63

21 .07%

Insurance

Company

227.38

1 3.00%

BI

1 58.66

9.07%

Others

1 02.90

5.88%

Pension Fund

81 .75

4.67%

Mutual Fund

78.51

4.49%

Individual

46.56

2.66%

6 Japan JSDA Bond Trading Volume by Sector (2015)

*Note: “Others” includes Bank of Japan, government-related organizations (e.g. Government Pension Investment Fund), etc.

(Source) JSDA “Bond Trading Volume by Sector“

7 Kazakhstan NBK n/a

But there are some numbers about share of Foreign Investors in holding of securities.

As of Oct. 2016 (data from Central Depository)

Volume of securities, which hold

by residents, USD

Volume of securities, which hold by

non-residents, USD

Corporate securities 20 324 172 822 125 956 280

Government securities 29 060 318 458 2 458 982 910

Foreign securities 548 054 690 8 101 101

8 Korea KOFIA 1. Share of Foreign Investors in the Bond Trading on the Exchange from Jan. 1 to Dec.31, 2015 (data from Korea Exchange

(KRX))

Bid Ask Net Bid

Trading

volume (Par

value)

(bil. KRW)

Trading value

(bil. KRW)

Trading

volume (Par

value)

(bil. KRW)

Trading value

(tril. KRW)

Trading

volume (bil.

share)

Trading value

(tril. KRW)

Total 1,735,287 1,765,527 1,735,287 1,765,527 - -

Foreign 34.2 31.3 19.5 19.7 2.9 -0.2

% 0.002% 0.002% 0.001% 0.001% - -

2. Share of Foreign Investors in the bond trading on the OTC Market(data from KOFIA)

Year Total (tril. KRW) Foreign (tril. KRW) %

2009 4,217.8 97.5 2.3%

2010 5,678.4 145.2 2.6%

2011 5,863.1 93.4 1.6%

Major Commercial

Banks & Long-Term

Credit Banks

10% Regional Banks & 2nd

Regional

3%

Trust Banks

8%

Other Fin.Insts.

4%

Life & Non-Life

Insurance Companies

1%

Investment Trusts

3%

Foreigners

25%

Corporations &

Individuals

1%

Others*

45%

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No. Market Name of

Organization

Share of Foreign Investors in the Bond Trading on Exchange/ OTC Market

2012 6,018.1 94.5 1.6%

2013 6,187.7 113.6 1.8%

2014 5,259.6 99.8 1.9%

2015 5,333.0 122.8 2.3%

9 Laos LSCO n/a

10 Mongolia MASD Pls see the above explanations for the share of foreign investors. Below pls see FRC 2016 Q2 data on Government bond

trading and market share of securities.

Government bonds at primary market (in billion MNT)

Market capitalization (light blue) Trade volume of Government bonds (dark blue)

Total securities trading share (in percentage)

11 Myanmar SECM Currently foreign investors are not allowed in Myanmar market.

12 Nepal SEBON Policy for foreign investment is under formulation.

13 Singapore SAS No statistics are kept on share of foreign investors’ bond trading. However statistics below show local and

foreign bond listings.

Stock trading

Government bond primary market trading

Government bond secondary market trading

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No. Market Name of

Organization

Share of Foreign Investors in the Bond Trading on Exchange/ OTC Market

14 Sri Lanka SECSL

Source: CBSL

Source: CBSL

15 Taiwan TSA n/a

16 Thailand 1 ASCO No comment

17 Thailand 2 ThaiBMA Exchange trading platform in Thailand’s bond market is offered by the Stock Exchange of Thailand (SET) and it accounts

for less than 1% of total trading value in bond market. This trading channel is used by only a few investors and foreign

investor does not participate in this system.

The table below indicates the share of foreign investor in the OTC market by trading value (%) in the past five years.

18 Turkey TCMA Bonds and Bills market has 20% of foreigner investors whereas in the percentage of foreigners in Corporate Bond was 3%

at the end of 2015.

Banks and Brokerage Firm can operate in Bond Trading. Almost all of bonds and bills trading volume of brokerage firms

were generated by domestic investors. While 90% of the market share belongs to banks, the breakdown of brokerage firm’s

investors in bond trading is as follows:

18.8

28.6

77.1

41.5

32.2

0.7

18.3 15.8

2.3

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

China HongKong South

Korea

Malaysia Singapore Vietnam Thailand Japan Sri Lanka

Outstanding Corporate Bonds as a % of GDP

Bond Trading

in OTC Market *2011 2012 2013 2014 2015

2016

(Jan-Sep)

Domestic Investor 85% 81% 82% 87% 90% 86%

Foreign Investor 15% 19% 18% 13% 10% 14%

Total Investor 100% 100% 100% 100% 100% 100%

* Trading among Bond Dealers is excluded.

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No. Market Name of

Organization

Share of Foreign Investors in the Bond Trading on Exchange/ OTC Market

Investor Breakdown of the Bond Trading Volume of

Brokerage Firms

2014 2015

Domestic Total 97.6% 99.0%

Domestic Individual 1.2% 1.9%

Domestic Corporation 16.2% 16.5%

Domestic Institutional 80.2% 80.6%

Foreign Total 2.4% 1.0%

Foreign Individual 0.0% 0.1%

Foreign Corporation 2.2% 0.8%

Foreign Institutional 0.2% 0.0%

Source: TCMA

19 Vietnam1 VASB Bond Trading statistics on the Hanoi Stock Exchange for Jan 1, 2016 – Oct 31, 2016.

20 Vietnam2 VBMA Foreign investors share: 8,8 % of the aggregate bond trading on HNX as of November 22, 2016

21 Asian Region ASIFMA n/a

7.6%

92.4%

HNX Bond Trading Jan 1, 2016 - Oct 31,

2016

Foreign Trading Domestic Trading

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IV –4. Settlement and Clearing Systems for Securities Transaction (for Stocks, Bond, Derivatives Respectively)

No. Market Name of

Organization

Settlement and Clearing Systems for Securities Transaction

1 China SAC After the implementation of paperless trading, clearing for securities can be done just through offsetting the quantity and

amount of securities traded by each broker and calculating the difference between receivables and payable securities. T + 1

delivery system is implemented in the market of all the A-share,funds and bonds in Shanghai and Shenzhen Stock Exchange.

2 Hong Kong HKSA There are three settlement and clearing houses in Hong Kong, which are Hong Kong Securities Clearing Co Ltd (HKSCC),

HKFE Clearing Corporation Ltd (HKCC) and The SEHK Options Clearing House Ltd (SEOCH). They are all wholly-

owned by Stock Exchange of Hong Kong (HKex). HKSCC settles all products listed in HKex, while HKCC settles all

products listed in Hong Kong Futures Exchange, and SEOCH clears all listed options as its name implies. At the moment,

there are not centralized system

3 India 1 ANMI The Indian settlement system works under the T+2 compulsory ‗rolling-settlement cycle‘ i.e. transaction on the trade day

are settled on the second business day after the trade day. India has two Clearing Corporations; the National Securities

Clearing Corporation (NSCCL) organized by the National Stock Exchange and the Bank of India Services Limited (BOISL)

set up by the Bombay Stock Exchange. In case the settlement is not completed on T + 2 day, the shares are auctioned. The

auction is done on T + 3 day and auction payout is done on T + 4 day. The auction standard will be T + 1 day price for NSE

and T day price for BSE. Default in auction payout then the closing out price would be 20% higher than the standard auction

price. All trades on the exchange platform are in the dematerialized form. There are two Depositories in India viz the

National Securities Depository Limited (NSDL) organized by the National Stock Exchange and the Central Depository

Services Limited (CDSL) set up by the Bombay Stock Exchange. Final settlement of trades takes place on the depositories

in the book entry format. Trade Guarantee Fund: - SEBI requires the exchanges to have a system of guaranteeing settlement

of trades or set up a Clearing Corporation to take up counter party risk to ensure that payment default by the members does

not disturb the market equilibrium.

4 India 2 BBF Same as ANMI

5 Indonesia APEI Settlement, safe-keeping, and clearing of securities transactions in the exchange are handled by the Indonesian Central

Securities Depository (KSEI) and the Indonesian Clearing and Guarantee Corporation (KPEI).

KSEI was established to provide orderly, proper, and efficient Central Securities Depository and Transaction Settlement

services. In order to perform its function, KSEI has developed a dependable and secure system known as C-BEST (The

Central Depository and Book-Entry Settlement System).

KPEI our settlement body differentiates its clearing system based on the following products:

1. Settlement and Clearing System for Equity : Electronic Clearing and Guarantee System (e-CLEARS)

The on-line system which is owned and operated by KPEI to support the clearing and settlement process in a

proper, regulated, and efficient manner. All clearing and equity transaction settlement activities consist of stock

exchange validation, netting, positioning, up to reporting process which is done through e-CLEARS system.

This web-based system connects KPEI, Clearing Members and the Custodian Center online.

2. Settlement and Clearing System for Bonds : Electronic Bonds Clearing System (e-BOCS)

The system to settle the corporate and retail bonds transaction in Indonesian Stock Exchange that involves the

Custodian Bank as one of the proactive party over the confirmation and affirmation process of the bonds transaction

data. This clearing mechanism shortens the settlement over bonds obligation and also increases the efficiency.

3. Settlement and Clearing System for Derivatives : Risk Monitoring On-line (R-MOL)

The system was developed by KPEI to support clearing and risk management of derivatives transaction

settlement process. This system combines the client-server and web-based technology to manage all clearing

process, transactions settlement, administration and reporting up to derivatives transaction. This system enables

the data interfacing between KPEI, IDX, exchange members and Payment Bank without manual intervention.

6 Japan JSDA In Japan, the settlement services for securities transactions are provided mainly by Japan Securities Depository Center, Inc.

(JASDEC). Its services consist of the registration of securities, settlement by book-entry transfer of securities, custody

and its related operations such as general shareholders notification, conversion agency service (CB), dividend payments

and proxy services for foreign stocks. In addition to those services, JASDEC provides settlement matching services, and

pre-settlement matching services.

On the other hand, Japan Securities Clearing Corporation (JSCC) provides clearing services for securities such as obligation

assumption, netting of cash /securities positions, settlement instruction to CSDs/Settlement Banks for securities/cash, and

settlement guarantees .

In Japan, the settlement period for stock transactions is T+3, and the settlement period for JGB is T+2. There are discussions

to shorten these settlement periods. (Please refer to VI. “Specific Measures introduced / implemented for the Securities

Market” 1, and 5.)

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No. Market Name of

Organization

Settlement and Clearing Systems for Securities Transaction

7 Kazakhstan NBK In Kazakhstan, the settlement services for securities transactions are provided mainly by the Central depository.

Its services consist of the following functions:

- render to deponents services associated with the nominal holding of financial instruments;

- carry out settlements in financial instruments in relation to transactions concluded in the organized securities market

and in relation to transactions concluded in the over-the-counter market with the participation of its deponents (between

deponents themselves; between a deponent on the one hand and a client of another deponent on the other hand;

between clients of two different deponents), as well as other persons carrying out broker and (or) dealer activities

without an appropriate license in accordance with legislative acts of the Republic of Kazakhstan;

- carry out depository services with regard to state securities in accordance with the Republic of Kazakhstan legislation

and its compendium of rules;

- render consultative, information services and other types of services not contradicting the Republic of Kazakhstan

legislation.

Clearing services for deals for financial instruments (excepting commodity derivatives) providing by Kazakhstan stock

exchange.

8 Korea KOFIA All trading orders submitted to the KRX by member firms shall be traded in accordance with the matching principles

specified in business regulations of the KRX. Immediately after the transaction, KRX shall inform (in electronic format)

member firms of the trading results which shall then be notified to respective customers.

Customers shall conduct settlement of their transaction with member firms by deposit of money or relevant securities for

buying or selling securities on T+2 (exact time for settlement deadlines are set by each member firms). Entire process of a

trade will be complete when every member firms complete their required settlement transaction with KRX (as a CCP) by

16:00 of T+2.

KRX shall, as a clearing institution, perform transaction confirmation, debt acquisition, deduction, confirmation of

settlement securities, settlement item, and settlement amount, settlement execution guarantee, follow-up measures on

settlement failure, or settlement instruction as a result of transactions on the securities market and derivatives market.

9 Laos LSCO The Lao Securities Exchange provides settlement and clearing services for securities transaction (i.e., currently there are

only stocks available for trading in the exchange). Its services includes registration and depository of securities, transferring

securities ownership to the holders, clearing and settlement relating to securities transactions and other services relating to

the distribution of dividends and the request of organizing the shareholders’ meeting upon the request of public companies

and issuers. The settlement period for stock transactions in the Laos is T+2.

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No. Market Name of

Organization

Settlement and Clearing Systems for Securities Transaction

10 Mongolia MASD In Mongolia, the settlement services for securities transactions were provided by the Mongolian Securities Clearing House

and Central Depository (MSCHCD) till April 2016. However, with a view to establish an integrated clearing system, the

MSCHCD was divided into 2 separate entities in April 2016: Securities Central Depository and Trades Clearing. Both

organizations are currently under the Ministry of Finance and the operations and ownership of the Trades Clearing LLC is

still to be discussed. The Central Depository conducts registration of securities, settlement by book-entry transfer of

securities, custody and its related operations such as general shareholders notification and dividend payments. The Trades

Clearing LLC provides clearing services for securities such as obligation assumption, netting of cash/securities positions,

settlement instruction to CSD/Settlement Banks for securities/cash.

Currently, the settlement period for secondary market transactions is T+1, and the settlement period for primary market is

T+0 (mostly Government bonds). There are discussions to shift the settlement period back to T+3 or T+2 once the clearing

system and custodian services are stabilized. Below is a general scheme of the current settlement system of T+1.

With regard to primary market bond trading, no settlement banks are involved and the settlement is done through prefunded

T+0 system.

11 Myanmar SECM YSX works as a clearing institution, a Central Counter Party (“CCP”), according to section 51 of the Securities Exchange

Law. YSX calculates trading position of each Securities Companies and replace claims and obligations between Securities

Companies into ones between each and YSX in a scheme of novation.

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No. Market Name of

Organization

Settlement and Clearing Systems for Securities Transaction

12 Nepal SEBON CDS and Clearing Limited, a company established in 2010 to provide centralized depository, clearing and settlement

services in Nepal is the sole clearing house to settle all securities. The transactions settlement period for stock transactions

is T+3.

13 Singapore SAS Clearing of Securities

The Central Depository (CDP), a wholly owned subsidiary of SGX, provides clearing for products listed for trading on

SGX’s securities market. These include shares, ETFs, REITs, Business Trusts, bonds, structured warrants and Extended

Settlement contracts. These are cleared and settled in accordance with the Clearing Rules on Settlement Day. An SGX

trade may be taken out of Inter-Broker Settlement and cleared and settled through CDP under DVP Settlement in

accordance with the DVP Rules.

CDP acts as a central counterparty to all matched trades executed on the SGX-ST Trading Engine, as well as privately

negotiated married trades that are reported to the clearing house for clearing on the trade date. Being a central

counterparty (CCP), CDP assumes the role of seller to the buying Clearing Member and buyer to the selling Clearing

Member. CDP therefore takes the buyer’s credit risks and assumes seller’s delivery risks. This inter-posing of CDP as the

CCP eliminates settlement uncertainty for market participants.

Clearing and Settlement of Cash Trades

On T+3, settlement of cash trades take place, i.e., sellers deliver securities to the clearing house in exchange for cash

payments, and the clearing house delivers securities to the buyers in exchange for cash payments. ('T' refers to the trade

date.) CDP moves the securities via book-entry electronic system. Should a seller have insufficient shares for delivery as

at noon on T+3, CDP will conduct buying-in on that afternoon to fulfil the seller’s delivery obligation.

Clearing of Derivatives

SGX Derivatives Clearing (SGX-DC), a wholly owned SGX subsidiary, provides clearing for:

1. Products listed on Singapore Exchange Derivatives Trading (SGX-DT)

2. OTC commodity trades registered via the SGX OTC Trade Registration Platform (TRS)

3. OTC financial derivatives trades registered via industry-used trade registration system

A SGX-DC Member may clear proprietary and customer transactions of SGX-DT products, OTC

commodities products and/or OTC financial derivatives.

Derivatives Clearing System

SGX-DC adopts two different clearing engines to support the clearing of different asset classes:

1. SGXClear – for clearing of equity, dividend, interest rate and commodity derivatives

2. Calypso® – for clearing of OTC financial products (e.g., interest rate swaps)

SGX-DC runs a settlement cycle for all derivatives products daily. During the settlement cycle, margins for outstanding

positions are calculated and the following are settled on trades executed for current day clearing and positions that are

brought forward from previous day

To reduce SGX-DC’s exposure to intra-day price changes, SGX-DC performs 3 intra-day margin cycles daily: - once in

the late morning and once in the afternoon for current day trades and positions; and - once immediately after the end-of-

day settlement cycle that includes trades for next day clearing.

At each intra-day cycle, trades and positions are marked-to-market and margin requirement re-calculated. The computed

profits and losses for futures and OTC swaps, and premium for option trades are collateralized together with margin

requirement.

14 Sri Lanka SECSL The SEC is presently facilitating the implementation of a Central Counter Party (CCP) mechanism jointly

with the CSE.

Existing settlement and clearing system

Central Depository Systems (Pvt) Ltd (CDS) is the sole Clearing House in Sri Lanka which is a fully owned

subsidiary of Colombo Stock Exchange. CDS provides depository facilities and clearing services for

securities traded on the CSE. It also provides a safe keeping facility and an electronic record of all listed

securities that are dematerialized.

Settlement

For Equity on T +3

The settlement of securities is akin to DvP 2 where securities are settled on a gross trade-by-trade at the

beneficial owner level and funds are settled on a net basis at the Trading Participant level. For equities,

securities of selling investors are immediately transferred to the buying investors upon the matching of

orders. Funds settlement is conducted on a net basis only on T+3 at the Trading Participant level.

For debt securities investors have a choice of doing trades on two separate settlement boards.

•TOM Board - Settlement on T+1(Early Settlement)

•SPOT Board - Settlement on T+2(Normal Settlement)

Accordingly, cash settlement can be done on T+1 or T+2 and Debt securities settlement is on DVP (Delivery

versus Payment) basis.

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No. Market Name of

Organization

Settlement and Clearing Systems for Securities Transaction

15 Taiwan TSA 1. All payment and settlement operations for securities traded on the Taiwan Stock Exchange or through OTC Center shall

be handled on a centralized basis by Taiwan Depository & Clearing Corporation (TDCC). TDCC’s major services

includes:(1)Custody of securities and short-term bills; (2) Book-entry for uncertificated securities and registration of

short-term bills; (3) Settlement, pledge and book-entry operations for securities and short-term bills; (4) Computerizing

book-entry operation for securities; (5) Distribution of securities by book-entry; (6) Clearing and settlement of emerging

stocks; (7) Payment processing of offshore fund transactions; (8) Payment processing for underwriting and redemption

of short-term bills; (9) Clearing, settlement and confirmation of short-term bills transactions; (10) Maintaining a short-

term bills interest index and so on.

2. In Taiwan, the settlement day is T+2. In case of block trade, investors can choose the settlement day to be T+2 or T.

16 Thailand 1 ASCO The Thailand Clearing House Co. Ltd. (TCH) serves as the central counterparty to all securities and derivatives traded on

SET, MAI, BEX and TFEX. TCH is governed by SEA for equity, bond and the Derivatives Act of 2003 (DA), and is under

the supervision of SEC.

Stock

Clearing and settlement of stock trading transactions are centralized at Thailand Securities Depositary Co., Ltd. (TSD)

and Thailand Clearing House Co., Ltd. (TCH), subsidiaries of the Stock Exchange of Thailand. All of transactions using

the “Delivery Versus Payment: DVP” settlement procedure and the settlement date convention is T+3.

Derivatives

Exchange traded derivatives are listed and traded on Thailand Futures Exchange (TFEX), a subsidiary of SET. Clearing

and settlement of derivatives transactions are done through Thailand clearing house (TCH) with settlement on T+1.

17 Thailand 2 ThaiBMA Stock

Clearing and settlement of stock trading transactions are centralized at Thailand Securities Depositary Co., Ltd. (TSD)

and Thailand Clearing House Co., Ltd. (TCH), subsidiaries of the Stock Exchange of Thailand. All of transactions using

the “Delivery Versus Payment: DVP” settlement procedure and the settlement date convention is T+3

Bond

Clearing and settlement of government bond are done on DVP procedure and real time gross settlement basis (RTGS)

through ‘BAHTNET’ operated by the Bank of Thailand. Most corporate bonds are cleared and settled at Thailand

Securities Depositories (TSD), a subsidiary of the SET. The settlement date convention is T+2 but can be varied upon

counterparty agreement.

Derivatives

Exchange traded derivatives are listed and traded on Thailand Futures Exchange (TFEX), a subsidiary of SET. Clearing

and settlement of derivatives transactions are done through Thailand clearing house (TCH) with settlement on T+1.

18 Turkey TCMA In Turkey, while Istanbul Settlement and Custody Bank (Takasbank) is responsible for settlement and clearing services,

Central Registry Agency serves as the central depository for the dematerialized capital markets instruments.

Takasbank is a specialized bank dedicated to securities services in Turkey. In addition to settlement and clearing services,

Takasbank operates the Takasbank Money Market, an OTC market where Borsa İstanbul’s members can lend and borrow

funds.

The Central Registry Agency Inc. (CRA) is the only central depository for all dematerialized capital market instruments. It

was established in 2001 as a private company. The dematerialization process was completed in 2006 for equities and in

2007 for mutual funds and corporate bonds. The dematerialization of government bonds started in 2012. CRA

dematerialized investors’ (individual and corporations) government debt holdings. The institutional investors’ government

debt holdings are registered at Takasbank. On the other hand, banks and brokerage firms have an option to register their

own government debt holdings at the Central Bank or the Central Registry Agency.

The main functions of the CRA are to dematerialize and register capital market instruments and the rights attached in

electronic form, with respect to issuers, intermediary institutions and rights holders.

Equities

The settlement of equities and cash is done on T+2 by Takasbank, through delivery-versus-payment (DVP) system. The

securities settlement operations are carried out via Takasbank Settlement Pool Account with the Central Registry Agency

(CRA). CRA and Takasbank systems are fully interlinked in real time, so securities transfers are reflected in the CRA

instantaneously. Settlement is realized along with the details transferred from the CRA.

The custody accounts are held with the CRA. Intermediaries have a settlement pool account besides their own portfolio

account and client sub-accounts. The cash accounts are held at Takasbank.

At the end of each trading day, Borsa İstanbul transmits details of all transactions to Takasbank. Takasbank multilaterally

nets the settlement positions, determines the obligations of each broker in each security, and calculates their net cash

position.

The net settlement position on client basis is transmitted to CRA on the trade day (T). Details of netting are available to

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No. Market Name of

Organization

Settlement and Clearing Systems for Securities Transaction

brokers electronically on T, showing also settlement amounts due. At the end of the day, the securities of the delivering

clients are blocked automatically by the CRA for settlement purposes.

On T+1, net settlement records that are checked by the CRA are made available to brokers electronically. On T+2, the

securities of the delivering clients are transferred from the blocked settlement account to the settlement pool account of the

broker within the CRA system. Securities are transferred to client sub-accounts by the CRA.

Bonds & Bills

Clearing and settlement is handled by Takasbank. The settlement date for transactions is T+0, unless otherwise agreed

between the parties. On the other hand, for the foreign currency denominated securities, settlement date is T+3.

The settlement of government debt securities traded in the organized and OTC markets are done through the Electronic

Securities Transfer System operated by the Central Bank of the Republic of Turkey (CBRT). Takasbank has a securities

account with the CBRT in order to facilitate the settlement of government debt securities.

After a trade, the Borsa İstanbul issues confirmations to both parties and to Takasbank. Takasbank multilaterally nets all

trades for each Borsa İstanbul’s member for each security traded and for cash. Netting results are reported to the members

electronically on trade day. Only trades done before 14:00 hrs can be settled on the same day.

Derivatives

The clearing and settlement of transactions are executed on a cash settlement basis.

Takasbank acts as the central counterparty and guarantees the settlement of transactions. But the guarantee is limited to the

collateral taken from the members and the size of the guarantee fund.

Trades are executed on a client account basis, which means that margins are also monitored on account basis. However,

although the margins are followed on account basis, clearing members are responsible for the margin calls.

Every day, after the announcement of daily settlement prices of contracts by Borsa İstanbul, Takasbank starts marking-to-

market on account basis. If the collateral falls below the maintenance margin, a margin call is announced by Takasbank. If

the collateral is above the maintenance margin in an account, but the cash margin is negative after the losses are deducted

from the cash collateral, the relevant member shall be required to compensate for the negative balance by a margin call.

While daily losses are deducted from the cash collateral on the same day (T+0), profits are added to the cash collateral on

the following day (T+1).

19 Vietnam1 VASB Vietnam Securities Depository (VSD) provides the settlement and clearing system for securities transactions through the

“Delivery Versus Payment DVP” principle. These transactions include registration and depository of securities, settlement

and clearing of securities, transferring securities ownership to the holders, dividend payments.

The settlement period for stock transactions is T+2; for bond transactions is T+1.

20 Vietnam2 VBMA The HNX has the “Electronic Bond Trading” system or EBT, which is a modernized and advanced alternative in bond

trading. EBT allows only members of HNX to enter the trading bonds by EBT system. This system is very convenient

and efficient that can facilitate electronic negotiation, payment by BIDV and settlement by VSD.

Bond-Trading operation process as in Timely Basis

Transaction or dealing date (T-n)

•Front office negotiates and makes deals with counterparty.

•Back office verifies deals with internal front office, confirms deal with counterparty, and sends payment to BIDV as for

ensuring cash availability or checks with VSD to make sure that bonds are available for selling.

•Transactions, confirmation could be done within the same day as trading date (T) or up to a week before trading date

(that is “n” could be a number from zero to 7) or even longer period sometimes. Note that the larger number of n

means that there could be more risk in settlement if the bond market is very volatile.

Trade date (T)

•Back office key in dealing details, as put through, into the Electronic bond trading system (EBT).

Settlement date (T+ 1)

•The EBT will automatically notify the BIDV and VSD to make the payment and transfer securities.

Processing timing for bond dealing, confirmation, payment, and settlement depends on agreement among the parties and

has to be done within office hours of three main organizations, i.e., HNX, BIDV and VSD, which are summarized in the

following table, and before entering deals into the EBT system to prevent a failed settlement.

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No. Market Name of

Organization

Settlement and Clearing Systems for Securities Transaction

21 Asian Region ASIFMA n/a

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IV –5. Current Status of Off-Exchange Transaction (including PTS, ATS, MTF, etc.)

No. Market Name of

Organization

Current Status of Off-Exchange Transaction (including PTS, ATS, MTF, etc.)

1 China SAC There are several OTC trading markets in China, including the Transfer of Equity Trading System (commonly known as

the new Sanban) , Inter-Bank Market, non-listed shares or equity trading market, Inter-otc system etc. Shanghai, Tianjin,

Zhejiang, Hubei, Hunan, Guangdong, Liaoning and Ningxia were established equity trusteeship Trading Center

(commonly known as the Si Ban Market). China's OTC market has become an important platform for financing for small

and medium enterprises.

2 Hong Kong HKSA Off-exchange transaction is not a common practice in Hong Kong, yet the dark pool system exists among large financial

institutions. However, once there is transaction done by dark pool, the institution must report to the Exchange immediately

and the trades will be recorded accordingly.

Except the dark pool transactions, some of the bonds and funds (authorized &; unauthorized mutual funds) are also traded

off-exchange.

The SFC is working with the industry to encourage the development and use of alternative funds and bonds distribution

platforms. For instance, the SFC and the Government are exploring with Hong Kong Exchanges and Clearing Limited the

possibility of creating an exchange-based platform for fund and bonds distribution. The establishment will help Hong Kong

to establish itself as the regional capital raising and product distribution centre.

3 India 1 ANMI Off-Exchange transactions are few in number. Such transactions take place directly between the two parties who give direct

instructions to the Depositories to conduct the transactions. These transactions mainly take place in case of an open offer

or takeover of a company. Such transactions do not require reporting to the exchange. In case the off-exchange transaction

is executed through a registered stockbroker on a principal-to-principal basis, the stockbroker must report such transactions

to the Exchanges.

4 India 2 BBF Off Market transactions are done which are mainly between two known parties and the depositories would execute the deal.

The transactions done through the broker would be reported to the stock exchange.

5 Indonesia APEI Bond trading in Indonesia is mostly on Over The Counter (OTC) basis. All OTC trading is required to report to the IDX

through Central Trading Platform (CTP) within 30 minutes of transaction.

6 Japan JSDA Since the 1998 abolishment of the obligation to trade stocks on exchanges in Japan, off-exchange transactions have been

gradually increasing.

However, in Japan, unlike US and European market, most stock orders are still executed through the stock exchanges and

market fragmentation is not so notable.

Having said that, the PTS (proprietary trading system) operators are gradually entering the Japanese market as order

placement through DMA, algorithm trading, etc. grow.

<PTS Operating Companies: 2, but 7 in terms of number of PTSs >

Company

Name

Started

PTS

Pricing

Method

Transaction

Time

Target

Customer Remarks

SBI Japan Next

Securities (First

Market: J-

Market)

Aug.20,

2007

Order

Matching

Method

8:20-16:00

19:00-23:59

Securities

Companies

- Continuous Matching of Limited

Orders

- In principle, benchmark price

and price range being set up

similarly to those of exchange

- Tick size is 1/10th

of that of

exchange

SBI Japan Next

Securities

(Second Market:

X-Market)

July 2,

2012

Order

Matching

Method

8:20-16:00 On-line

Securities

Companies

(Individual

investors)

- Continuous Matching of Limited

Orders

- In principle, benchmark price,

price range, and tick size being

set up similarly to those of

exchange

SBI Japan Next

Securities (Third

Market: U-

Market)

May 2,

2015

Order

Matching

Method

8:20-16:00 Institutional

Investors

(e.g., Investment

banks)

- Continuous Matching of Limited

Orders

- In principle, benchmark price

and price range being set up

similarly to those of exchange

- Tick size varies in line with the

price change

SBI Japan Next

Securities (JNX

Cross)

Apr. 22,

2013

Market Price

Trading

Method

8:00-17:00 Securities

companies

- Provide crossing (Matching with

exchanges’ whole day VWAP)

Chi-X Japan

(Chi-X PTS)

July 29,

2010

Order

Matching

Method

8:00-16:00 Securities

companies,

Institutional

investors

- Continuous Matching of Limited

Orders

- In principle, benchmark price

and price range being set up

similarly to those of exchange

- Tick size varies in line with the

price change

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Chi-X Japan

(Chi-Match)

Sept. 1,

2014

Market

Price

Trading

Method

8:00-17:15 Securities

companies,

Institutional

investors

- Provide crossing (Corresponding

with exchanges’ whole day

VWAP, morning session VWAP

and afternoon session VWAP

calculated by Chi-X based on the

trading data in exchange )

Chi-X Japan

(Chi-Select)

June. 8,

2015

Order

Matching

Method

8:00-16:00 Securities

companies,

Institutional

investors

- Continuous Matching of Limited

Orders

- In principle, benchmark price

and price range being set up

similarly to those of exchange

- Tick size varies in line with the

price change

7 Kazakhstan NBK As an emerging markets country, Kazakhstan just on the way to develop market relationships, including stock market

operations and Other-The-Counter (OTC) financial instruments. Currently, there are no direct rules or instructions

regulating Over-The-Counter (OTC) operations, as well as ATS (Alternative trading system) and MTF (Multilateral

Trading Facility). In most cases, professional members of stock market prefer to operate with traditional trading systems

in the centralized securities exchange market operated by a stock exchange.

8 Korea KOFIA In March 2003, the Korea Securities Dealers Association -now KOFIA- launched an OTC trading system in order to

supplement the KRX and make the trading of OTC shares more convenient. The name of the OTC market was changed to

the FreeBoard Market in July 2005.

KOFIA revised how the operation of the market is approached, shifting the focus from promoting direct investment in

SMEs and venture companies to providing a practical venue for the transparent and active trading of all unlisted stocks in

companies, regardless of their size.

Based on these reforms, KOFIA launched the K-OTC in August 2014 to replace the existing FreeBoard Market, and the K-

OTCBB (Bulletin Board) in April 2015. At the end of 2014, a total of 117 corporations were being traded on the K-OTC,

with a market capitalization of KRW 12.7bn. The average daily trading volume since the launch of the K-OTC was KRW

2.4bn.

KOFIA also manages and administers the OTC bond market in Korea. Since most bonds in Korea are traded on the OTC

market, KOFIA plays an important role in this secondary market. To enhance the transparency of OTC bond trading, KOFIA

provides market participants with essential information such as the details of bond trading, mark to market yields,

representative bond yields, and final quotation yields for different bond types on its website. To facilitate greater

transparency and more transactions in OTC bond trading, KOFIA launched a special website (www.bondmall.or.kr) where

information on retail bonds by securities firms is collected, compared, and disclosed in February 2010 and. an online bond

trading system, FreeBond in April 2010.

As of the end of 2015, 189 institutions and 2,485 individuals were registered with FreeBond, of which 159 institutions and

1,533 individuals were active users.

9 Laos LSCO n/a

10 Mongolia MASD There are no off-exchange trade transactions in Mongolia currently.

11 Myanmar SECM nil

12 Nepal SEBON SEBON has approved the Over the Counter Bylaws of the Stock Exchange. Hence the facility for the trading is there,

however, the trading is limited in the Over the Counter Market.

Amount of Trading Outside Financial Instruments Exchanges

(Trading Amount:JPY100million) (Share:%)

2,252,387 2,092,294

2,553,421

3,572,861

5,347,742

7,256,882

7,951,186

6,054,098

3,902,246 3,754,677

3,627,653

3,229,946

7,040,482

6,432,745

7,461,773

199,649 159,720159,389 211,498

273,024396,858

505,945 425,656238,438 226,413

308,407 328,139683,072 661,225

888,488

8.86%

7.63%

6.24%5.92%

5.11%5.47%

6.36%

7.03%

6.11% 6.03%

8.50%

10.16%

9.70%

10.28%

11.91%

0.02% 0.07% 0.04% 0.03% 0.04%

0.10%0.25%

0.35% 0.77%

0.84%

3.55%

5.52%

5.97%5.78%

5.10%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

On-exchange Trading

(C)

Share of Off-

Exchange(Except for

the PTS) over On-

Exchange (B/C)

Share of PTS over On-

Exchange (A/C)

(405) (1,568)(1,016) (1,160) (2,279)

(7,247) (19,521) (21,487) (29,928)

(31,356) (128,719) (178,321)(420,478) (371,864)

(380,872)

PTS Trading (A)

Off-Exchange Trading(Except for the PTS

Trading) (B)

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13 Singapore SAS

14 Sri Lanka SECSL At present Sri Lanka does not have any Off-Exchange Transactions.

15 Taiwan TSA According to the article 150 of Securities and Exchange of Taiwan, the trading of listed securities shall be conducted on a

centralized securities exchange market operated by a stock exchange except in the following situations:

1. Transactions in government bonds.

2. Due to the operation of an act or regulation, the transacting parties are unable to acquire or dispose the ownership of the

securities through trading on the centralized securities market.

3. Direct private transfer of securities not in excess of one trading unit and the interval between any two such transfers is

not less than three months.

4. Other transactions in conformity with the regulations prescribed by the Competent Authority.

Paragraph 4 of the same Article above empowers the Competent Authority to make provisions for permitting off-exchange

transactions in certain situations. For example, a foreign investor who has received approval from the Investment

Commission of the Ministry of Economic Affairs under “the Act Governing Investment by Foreign Nationals” to transfer

assets to another foreign investor may do so through off-exchange trading. Many foreign investors have invested in Taiwan

stocks through such off-exchange channels over the years.

Under current law, securities listed on the Taipei Exchange (TPEx) (formal named GreTai Securities Market) can be traded

off-market. But, in those cases of securities for which the relevant authorities have duly set a foreign investment ceiling in

accordance with law, foreign investors (who must have obtained approval or registration in accordance with the Regulations

Governing Securities Investment by Overseas Chinese and Foreign Investors) are required to trade such securities through

the TPEx trading system. However, only very few TPEx-listed stocks are subject to this requirement. Most TPEx-listed

stocks can also be traded by foreign investors via price negotiation at the business places of securities firms.

After each market close, the TWSE also provides paired block trades and auction and tender offer systems in which

securities prices are negotiable to satisfy various investors’ demands.

16 Thailand 1 ASCO n/a

17 Thailand 2 ThaiBMA Bond trading in Thailand is mostly on over-the-counter (OTC) basis. Although an electronic trading platform is offered by

the Stock Exchange to be an alternative for trading, it accounts for only less than 1% of total trading.

Inter-dealer trading is actively done through voice box from the two main inter-dealer brokers.

All trading (no matter where it takes place) is required to report to ThaiBMA within 30 minutes. ThaiBMA then

disseminates these executed transactions to the market to provide for intraday market movement information.

18 Turkey TCMA The buying and selling of listed stocks and/or securities on the exchange is the main rule. However, upon the proposal of

the relevant exchange and the necessary arrangements by the CMB, authorization may be granted for off-exchange trading.

Unless an exception has been made to such trading, exchange members cannot trade securities of their customers’ off-

exchange.

19 Vietnam1 VASB All off-exchange transactions are required to settle via VSD. The latest data on off exchange transactions was released by

the VSD for 2014.

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Source: VSD

20 Vietnam2 VBMA n/a

21 Asian Region ASIFMA n/a

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IV –6. Share of On-line Trading

No. Market Name of

Organization

Share of On-line Trading

1 China SAC n/a

2 Hong Kong HKSA

3 India 1 ANMI Internet Trading Value in the CM Segment in comparison with

total trading volumes at NSE

Year Enabled Registered Internet Trading Internet Trading % of total trading

Members* Clients* Value Value volume

(` Crores) (US $ bn)

2011-12 428 6,148,447 597,430 116.78 10.63

2012-13 445 6,268,798 583,073 107.20 10.76 2013-14 459 6,874,574 627,478 105.00 10.99

2014-15 480 6,359,312 1,005,984 160.72 11.62 2015-16 506 9,461,175 1,025,706 154.63 24.21

Note: * At the end of the financial year

Trading volumes are calculated as buy side + sell side turnover

** Above data is based on statistics on Internet Based Trading uploaded by members.

6-3: Internet Internet Trading Value in the F&O Segment in comparison with

total trading volumes at NSEin.

Year Enabled Registered Internet Trading Internet Trading % of Total

members * clients * Value Value Trading

Volume

(` Crores) (US $ bn)

2011-12 421 4,151,677 4,910,582 959.91 7.83

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No. Market Name of

Organization

Share of On-line Trading

2012-13 437 3,833,149 5,905,158 704.76 9.36

2013-14 451 4,116,039 7,652,572 688.78 10.01

2014-15 472 4,695, 396 11,613,948 1,855.54 10.44

2015-16 498 4,750,774 14,624,067 2,204.65 22.56 Note: * At the end of financial year.

4 India 2 BBF Same as ANMI

5 Indonesia APEI Basically, all trades that go into the exchange are sent remotely, 75% of the retail houses has on-line programs with most

of them having mobile trading platform - on android. Only approximately 25% of the institutional orders are not done

through Direct Market Access.

In an archipelago country like Indonesia, it makes more sense to do things using on-line. There are a few things which make

it not a 100% workable:

1. Limited internet access including mobile. Although there are more than 200 million active mobile phones in

Indonesia, the majority of users are concentrated in the big cities where an individual can have more than one

number. Even there, the data connection is spotty at best. The home internet penetration is even worse.

2. The need for face-to-face meeting with potential client. This requirement is another dampener in the expansion of

retail clients. Somehow the excessive worries of criminal phenomenon in mature markets such as Money

Laundering is applied too early in the infant market of Indonesia.

6 Japan JSDA Japan has witnessed a rapid increase in the number of Internet users and the PC market penetration rate since the latter half

of the 1990s. In addition, in October 1999, the Japanese stock market entered a new era of complete liberalization of

commissions and fees in the stock brokerage business. These two factors have led to the birth of online brokers in Japan.

Since then, competition among online brokers has been severe. Most of them cut commissions and fees in stock trading

significantly to increase their customer base. In October 1999, there were around 300,000 internet brokerage accounts in

Japan, and this number had reached 22.6 million accounts in March 2016.

Sept.2013 Mar.2014 Sept.2014 Mar.2015 Mr.2016

Number of member firms engaged in

Internet trading 58 61 60 61 66

Number of Accounts (million) 19.0 19.7 20.2 20.8 22.6

Stock Trading Amounts

(billion Yen) 215.5 168.7 146.3 171.1 150.7

7 Kazakhstan NBK n/a

8 Korea KOFIA The share of transaction through on-line is 79.88% in KOSPI market(’16.1.1~’15.8.31). The trend that percentage of HTS

decreases while that of wireless phone(smart phone) increases continues.(data from KRX).

[KOSPI]

% Securities Company

Terminals

Wire terminal

(telephone)

Wireless terminal

(smart phone, PDA)

HTS

2011 21.82 0.68 8.83 68.67

2012 14.41 0.59 15.44 69.56

2013 17.29 0.61 20.11 61.98

2014 20.49 0.58 22.67 56.27

2015 14.88 0.50 27.15 53.23

2016 14.20 0.42 30.98 48.48

9 Laos LSCO To support and expand investor base especially foreign investors, LSCO had issued the Regulation on Home Trading

System (HTS) in July 2013 and this system has been officially operated by the Lao Securities Exchange (LSX) since

November 2013. LSX commenced HTS as provide investors with more convenience and optional channel of trading.

Present, number of usage HTS is three securities company providing this service.

10 Mongolia MASD In 2015, a couple of securities firms announced that they have introduced online trading platforms, however there is no

official data on their share in trading. Securities firms have two trading options since 2013: 1) trading on the exchange floor

and 2) trading from their offices through VPN connection to the exchange program.

MASD is actively seeking for possibilities to improve its member firms’ front office and back office programs, which

should also have an opportunity to provide online account opening and trading services for the investors. Appropriate legal

framework is also need to be advocated.

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No. Market Name of

Organization

Share of On-line Trading

11 Myanmar SECM Currently, on-line trading is not allowed to Myanmar Capital Market at its initial stage.

12 Nepal SEBON On-line trading is being developed. Trading is fully automated provided on the intranet platform of Nepal Stock Exchange.

13 Singapore SAS According to SGX, online trade is about 40% of the total trades.

14 Sri Lanka SECSL At present 28 Stock Broker Firms provide internet facilities for Investors. On-line trading is not very popular but volumes

have grown in comparison to previous years.

15 Taiwan TSA As of the end of September 30, this year, there were 59 securities firms providing on-line trading, which accounted for

51.70% of total number of transactions, 47.45% of total trading value

16 Thailand 1 ASCO Share of internet trading in SET (stock market) grew from 24.4% in 2010 to 36.0% in September 2016. Whereas, share of

internet trading in TFEX (Derivatives market) grew from 24.9% in 2010 to 29.6 % in September 2016.

2010 2011 2012 2013 2014 2015 Sep-16

SET 24.4% 24.5% 27.9% 31.6% 37.2% 37.9% 36.0%

TFEX 24.9% 29.3% 31.9% 29.9% 27.5% 30.8% 29.6%

17 Thailand 2 ThaiBMA Bond trading in Thailand is mostly on over-the-counter (OTC) basis. Although an electronic trading platform is offered by

the Stock Exchange to be an alternative for trading, it accounts for only less than 1% of total trading.

18 Turkey TCMA Share of On-line Trading:

Internet Transactions of Brokerage Firms

2013 2014 2015

Equities

No. of Active Internet Investors 338,716 326,241 319,142

No. of Trades 49,393,739 47,044,408 53,482,289

Internet Trading Volume (mn. US$) 395,035 410,472 498,603

Bonds and Bills

No. of Active Internet Investors 75 63 46

No. of Trades 479 365 327

Internet Trading Volume (mn. US$) 2.1 1.6 1.4

Futures

No. of Active Internet Investors 7,499 11,212 11,444

No. of Trades 5,706,629 11,979,095 7,779,442

Internet Trading Volume (mn. US$) 225,787 288,165 365,305

Leveraged FX Trading

No. of Active Internet Investors 14,534 27,125 53,575

No. of Trades 13,458,556 17,601,754 47,471,658

Internet Trading Volume (mn. US$) 1,894,077 2,720,599 6,576,424

Source: TCMA

19 Vietnam VASB From Jan 2009, online trading has been implemented officially in stock market.

HNX introduced the new electronic system for the auction of government bonds in July 2012.

HNX also introduced an electronic trading system for T-bills in September 2012.

There is no reported data for on-line trading statistics.

20 Vietnam VBMA HNX introduced the new electronic system for the auction of government bonds in July 2012. HNX also introduced an

electronic trading system for T-bills in September 2012. HNX is trying to build the yield curve for Vietnam but this project

is still in its early phase. Vietnam Securities Depository now allows ‘T+3’ mechanism in stock trading on exchange.

21 Asia Region ASIFMA n/a

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V. Safety Net for Investors Protection

No. Market Name of

Organization

Existence of Investor Protection Fund

1 China SAC Yes

2 Hong Kong HKSA Investor Compensation Fund was established in 2003 in accordance with SFO, the source of fund is from the compensation

levy contributed by investors who trade listed products in the HKex. The fund is maintained by The Investors

Compensation Co Ltd (ICC) which is wholly owned by HKex and recognized by SFC. Under the compensation scheme,

the claim ceiling is HKD150,000.00 per either a securities or a futures account.

3 India 1 ANMI The SEBI has such a fund which is utilized for the purpose of investor protection subject to the norms laid down in that

behalf. The exchanges also have a similar process.

4 India 2 BBF Stock Exchange has the Investor Protection Fund.

5 Indonesia APEI OJK has established the Investor Protection Fund Institution which was operational in September 2013.

Currently, the funds put aside is still contributed by the SRO’s (IDX, KPEI, KSEI).

6 Japan JSDA Japan Investor Protection Fund (JIPF) was established in 1998 as a private & independent organization, authorized and

supervised by the Japanese Prime Minister and the Minister of Finance. JIPF’s current assets are around 56.8 billion yen

(as of March, 2016).

JIPF collects contributions among its members and compensate investors up to 10 million yen per customer when a

bankrupted member cannot return customers’ money and securities because of its misconduct or other reason. JIPF manages

and invests the fund. It can audit its members, but has no supervision powers.

JIPF’s members are supervised by the Finance Bureaus.

Mandatory membership for all securities companies.

257 member institutions (securities companies) as of November, 2016

JIPF is the only organization to compensate securities investors in Japan.

7 Kazakhstan NBK There is no Investor Protection Fund.

8 Korea KOFIA n/a

9 Laos LSCO In December 2015, LSX had improved its trading mechanism by changing from Call Auction trading method to Continuous

Auction in line with daily price change limit ±10%. of a previous day’s closing price to ensure price stability and reduce

the impact of price fluctuation to protect domestic investors.

The investor protection fund in Laos has yet been established. However, securities firm has to separate securities accounts

and cash accounts for each client from its own accounts. LSCO also requires a securities firm to report an aggregated

account of its clients’ assets on a monthly basis. Currently, there is a risk protection fund in which member firms of LSX

(i.e., securities companies) are required to contribute a certain amount of money into such fund. This is to reduce risks

associated with members’ default.

10 Mongolia MASD Currently, there is no special Investor Protection Fund in Mongolia. However, to protect investors the FRC required all

securities firms to deposit cash equal to 3 percent of their paid-in capital into a special account at the MSCHCD managed

by the FRC. In 2013, it has amended the Risk Fund regulation to keep the Risk Fund reserves by the regulated entities in

their own bank accounts and to provide financial statements to the FRC on a quarterly basis.

11 Myanmar SECM Currently Myanmar does not have such kind of Fund.

12 Nepal SEBON We have provision for investor protection fund in our Act but till now it is not being implemented.

13 Singapore SAS Retail investors are protected from default by their brokers by the SGX Fidelity Fund, with a cap of $50,000 limit on

individual investor claimant. Currently, the SGX Fidelity Fund has some $52 million in net assets.

In addition, there is a Clearing Fund maintained by the Central Depository (CDP) which can be tapped in times of need to

maintain integrity in the clearing of Member’s positions, so that investors will not be adversely impacted, and trading and

clearing can continue unabated.

Protection on Clearing House & Clearing Members (for Equities)

CDP maintains a Clearing Fund that can be applied in the event a Clearing Member is unable to discharge its money

obligations to CDP or if CDP suffers any loss as a result of liquidating a defaulted Clearing Member's position.

The Clearing Fund structure is scalable and clearing members’ contributions is linked to the level of risk (securities traded

value) they bring to the clearing system. CDP requires only a portion of Clearing Members’ required contributions to be

deposited upfront; Members will be called upon to deposit the remaining contributions (known as “Contingent

Contributions”) under conditions of increased risk or to meet losses arising from Clearing Member default(s).

The Clearing Fund comprises the following:

● CDP’s contribution to the first layer. This is the higher of S$30 million or minimum 15% of the total Clearing Fund;

● Collateralised Contributions from Clearing Members. Each Member’s contribution is the higher of S$500,000 or 0.5

basis points of its past 12-month traded value (i.e., buy + sell value). Total Clearing Member Collateralized

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No. Market Name of

Organization

Existence of Investor Protection Fund

Contributions is subject to minimum of S$40 million in aggregate;

● Contingent Contributions from member firms. Each Clearing Member’s contribution is computed as 0.4 basis points of

its past 12-month traded value; and

● Funds set aside by CDP for such purpose.

The Clearing Fund will be applied in the following order:

● Defaulting Clearing Member's Clearing Fund contributions;

● CDP's funds set aside for such purpose, in the first layer of the CDP Clearing Fund. CDP’s current contribution is

S$30m;

● Collateralised Contributions made by all other Clearing Members on a pro rata basis in proportion to each Clearing

Member’s collateralised contribution;

●Contingent Contributions made by all other Clearing Members on a pro rata basis in proportion to each Clearing

Member’s contingent contribution.

CDP’s funds set aside for such purpose in excess of its contribution in the first layer (if any).

14 Sri Lanka SECSL Compensation Fund

The Compensation Fund came into operation along with the establishment of the SEC in 1987. Section 38 of the Securities

and Exchange Commission Act No 36 of 1987 as amended states as follows: “There shall be established a fund called the

Compensation Fund, for the purpose of granting compensation to any investor who suffers pecuniary loss as a result of any

licensed stock broker or licensed stock dealer being found incapable of meeting his contractual obligations”

15 Taiwan TSA “The Securities Investors and Futures Traders Protection Act” became effective on January 1, 2003.

Under the Act, “The Securities and Futures Investors Protection Center”, an organization was set up to provide:

1. Consultation on the trading of securities and futures as regulated by related laws and regulations;

2. Mediation of disputes arising from the trading of securities and futures; and litigation services on behalf of investors;

3. In addition, the Center manages a protection fund to compensate investors if a securities or commodities firm is unable

to do so due to financial difficulties.

The protection fund was valued at NT$1.031 billion (=34.94 million US dollars) when the Center was established. Donors

to the fund: the Taiwan Stock Exchange, Taiwan Futures Exchange, GreTai Securities Market, Taiwan Securities Central

Depository, the Taiwanese Securities Association, Securities Investment Trust and Consulting Association of ROC, Taipei

Futures Association, Fuhwa Securities, Global Securities Finance, Fubon Securities, and Entie Securities.

Meanwhile, Article 18 of the Protection Act requires securities firms, futures firms, Taiwan Stock Exchange, Taiwan Futures

Exchange, and GreTai Securities Market to contribute each month to the fund.

16 Thailand 1 ASCO SET and TFEX established the Securities Investor Protection Fund (SIPF) and the Derivatives Investor Protection Fund

(DIPF) in cooperation with some of its member firms who volunteered to join the funds. The purpose is to create confidence

among investors who trade securities on the Exchange through the Fund's member brokers. Investors who are clients of

SIPF members or DIPF members can receive their assets back or compensation for the price of assets from this fund in

certain circumstances as defined in the regulations.

The investors shall be entitled to compensation for assets or compensation for the price of assets from the Fund not

exceeding the actual damage incurred to them and each investor will get no more THB 1 million. Investors are automatically

protected when they open a trading account as long as their broker remains a member. Moreover, investors need not apply

for this protection or pay anything.

17 Thailand 2 ThaiBMA This part is applied only to equity and derivatives market traded on SET.

The Stock Exchange of Thailand has established the Securities Investor Protection Fund or SIPF in cooperation with

some of its member firms who volunteered to join the fund. Its purpose is to create confidence among investors who trade

securities on the Exchange through the Fund's member brokers. Investors who are clients of SIPF members can receive

their assets back or compensation for the price of assets from this fund in certain circumstances as defined in the

regulations.

SIPF provides protection to investors who fail to receive returns on their assets or compensation for the price of assets

from SIPF members if :

1. Any member broker of SIPF is adjudicated bankrupt

2. Any member broker of SIPF fails to comply with an arbitral award requiring them to return the assets or compensate

for the price of assets to investors.

This protection does not include losses incurred from price decreases due to the securities trading. The investors shall be

entitled to compensation for assets or compensation for the price of assets from the Fund not exceeding the actual damage

incurred to them and each investor will get no more 1 THB Mln. per one SIPF's member broker.

Investors are automatically protected when they open a trading account as long as their broker remains a SIPF member.

Moreover, investors do not need to apply for this protection or pay anything.

18 Turkey TCMA The Investor Compensation Centre that was converted in 2013 from the previous Investor’s Protection Fund covers not

only equities, but “all” capital market instruments including forex transactions and cash. The maximum coverage amount

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No. Market Name of

Organization

Existence of Investor Protection Fund

of all settlement obligations is TL 120,823 (~$ 40,000) for the year 2016.

19 Vietnam1 VASB n/a

20 Vietnam2 VBMA n/a

21 Asian Region ASIFMA n/a

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VI. Challenges for Securities and Capital Market

V – 1. Major Recent Incidents and/or Challenges in Securities and Capital Markets as a Whole

No. Market Name of

Organization

Major Recent Incidents and/or Challenges in Securities and Capital Market as a whole

1 China SAC It would be the Reform of Financial Market, with respect to the main incident and challenge in the Securities and Capital

Markets of China.

The Chinese financial system already resembles a modern financial sector in advanced economies. However, freeing up

key financial market prices still lags for China.

This unique pattern of financial reform is closely related to the overall asymmetric liberalization approach adopted by the

Chinese government. While most products have been fully liberalized, factor markets remain distorted in some degree.

There is so much work which is needed to be done for enhancing the foundation and function of this market.

2 Hong Kong HKSA General Observation over the market:

1. Slower Chinese GDP growth;

2. Limited channels of capital flow in China;

3. Increased concerns over Corporate Governance, compliance, AML policies and procedures;

4. Technology innovation attracted more retail and overseas users.

3 India 1 ANMI Recently commodities market activities were brought under SEBI regulations.

Government of India has facilitated operations of International Exchanges in GIFT City at Ahamedabad which is expected

to be in operation from next year onwards.

4 India 2 BBF 1.Commodities segment brought under equity markets regulator SEBI so now there is only one regulator for both equity

and commodity markets

2.International Stock Exchange coming up in the GIFT CITY at Gujarat State

5 Indonesia APEI The main challenge in securities market are:

1) Increasing the public knowledge of the Capital Market so that the public know:

a) Which of the investment product is actually of capital market and supervised by the authority;

b) The benefit of investing in capital market;

c) That investing in capital market is not the same as gambling – a practice forbidden in the generally Muslim

population of the country; and

d) That investing in capital market is not limited to rich investors only.

2) Enforcing the rules and regulation to monitor the securities firms, the investors and also the listed companies;

3) The small percentage of domestic investors – less than 0.2% of the population invest in the Capital Market;

4) Difficult KYC process – need to simplify it;

5) Shortage of licensed professionals in the capital market;

6) Low number of product range available for investors;

7) Fluctuating currency which always discourage foreign investors; and

8) Synchronization of rules between OJK, Tax Office and Bank Indonesia.

6 Japan JSDA - Strengthening functions and competitiveness of the capital market underpinning the Japanese economy;

- Supporting individual investors by expanding and promoting financial and economic education;

- Influence of Fintech to Japan’s securities market.

7 Kazakhstan NBK Major Challenges in Securities market are:

- Low liquidity of the securities market;

- Small number of retail investors. Major investors of the securities market of Kazakhstan are institutional investors, like

single pension fund, commercial banks, insurance companies;

- Small number of issuers;

- Deficit of financial instruments.

8 Korea KOFIA Introduction of Korea's Individual Savings Accounts (ISAs)

Korea’s Individual Savings Accounts (ISAs) were introduced on March 14, 2016, in which individuals can invest into

various financial products such as savings, funds and derivative-linked securities. Previously, individuals had to open

separate accounts for each financial product. The introduction of ISAs is expected to help individuals build an investment

portfolio tailored to their risk appetite and investment purpose and manage their wealth more efficiently with the aid of

asset management experts. ISA products are now on sale starting from March 14 through branches of 33 financial

institutions – banks, securities firms and insurers.

Fintech Open Platform launching

Fintech Open Platform is launched in Korea for the first time in the world on August 30 in a bid to ease Fintech firms

develop innovative financial services. Fintech Open Platform is a combination of a website where Fintech firms can

download program commands used for development of Fintech services, and a physical space where they can run test

operations of the programs they developed.

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No. Market Name of

Organization

Major Recent Incidents and/or Challenges in Securities and Capital Market as a whole

9 Laos LSCO 1. Inadequate legal and regulatory framework;

2. Limited choices for financial products;

3. Lack of human resource in the field and inadequate IT; and

4. Limited investors base from local, institutional and foreign investors.

10 Mongolia MASD - Strengthening the capacity of MASD as a SRO and improving our activities in particular advocacy for policy change

and training for member firms and professionals. This year the Parliament/Government was newly elected/established,

thus promoting the sector with them is essential;

- FRC requirement to increase the share capital of securities firms up to 1.3 billion MNT by the end of 2016;

- Advancing the market infrastructure such as establishing an adequate clearing system to eliminate counterparty risk,

opening up opportunities to investors to open accounts, trade and make transactions online, etc.;

- Improving corporate governance of listed companies, their information disclosure to the public;

- Improving public understanding and education on securities and securities market;

- Promoting development of institutional investors and improving capacity of professional participants;

- Establishing a favorable tax environment for the investors as well as issuers to attract more investment and products;

- Privatization of state-owned enterprises through the MSE in an open and accessible manner for the public;

- Some sort of de-regulation and legal reform is needed according to the participants of the recent open discussion on

developing the capital market in Mongolia. For example, investors need to be meaningfully protected and not to be

restricted in trading when the FRC or MSE takes disciplinary measures (suspension of special licenses) on securities

firms.

11 Myanmar SECM - For supply side, listing with IPO and qualified companies are needed. For the demand side, knowledge awareness for

investors programs are also needed.

- YSX was established last December and trading started March 2015.Now three listed Companies are trading. Market

situation is calm and market need IPO & listed companies.

- Besides, investor education is required and need to educate the investor and general Public.

12 Nepal SEBON - Last year’s massive earthquake and border blockade affected Nepalese daily life and national economic activities. We

are still in a period of national reconstruction;

- Absence of real sector companies and dominance of banks and financial institutions has increased the sectoral risk of

the market; and

- Lack of institutional investor and the dominance of the individual investor causing high volatility in the secondary

market.

13 Singapore SAS 1. Recent Trading Disruption

In July 2016, SGX suffered its longest securities trading disruption. It was down for more than 5 hours due to a

technical glitch triggered by hardware failure. The disruption was caused by a disk failure and a software application

that did not detect the problem. The disruption was prolonged due to the challenges in the orders and trade

confirmation process. This is the first major disruption to securities trading since two outages in late 2014. Despite the

long down-time, SGX has improved their communication with members on the incident handling. A Securities

Industry Working group was formed to look at ways to improve the operational resiliency of its markets and how to be

more responsive and a timely recovery for future incidents.

2. Dual Class Shares

SGX listing advisory committee approved dual-class share structure as it can potentially help SGX attract new IPO

listing, especially for high profile tech companies. This move can help narrow the gap with Hong Kong Exchange

where minority-control voting structures aren’t permitted. However, concerns have been raised by business watchers

that there is a risk to corporate governance issue and agency problem. Such a structure is disadvantageous to minority

shareholders and do not protect their interest. There have been proposed safeguards to be implemented and explored in

the event dual-class structures are approved. This is still pending regulatory approval.

3. Drawing Retail Participation

The SGX is trying to increase the investor base by bringing more retail investors into the market. Many Singaporeans

are highly risk adverse, preferring to put their monies into fixed deposits, rather than equities. SGX is tying up with

member companies to conduct seminars to educate the investing public.

4. Attracting New Sales People

Turnover for sales people in this industry has been high as the broking profession has been increasingly perceived as a

sunset profession. Singapore is reinventing itself to be an Asian financial technology, or fintech hub. A report in Jul

2016 shows Singapore to be leading Hong Kong in ranking. Steps have been taken by MAS and our local polytechnics

to groom young fintech potential. The five local polytechnics will be reviewing and enhancing their banking and IT-

related curricula so that they are aligned with the latest developments in the field. Scholarships and industry mentorship

will be available to final year students.

5. Low Transaction Turnover and Delisting of Companies

SGX securities turnover drops to 37% year-on-year to S$20.6b in August 2016. This was attributed to weak trading

volumes and delisting of many companies like Eu Yan Sang International, Tiger Airways and Osim International. In

general there is lacklustre interest among retail investors.

14 Sri Lanka SECSL - Lower Liquidity in the market;

- Lack of financial literacy among investors;

- Lack of foreign portfolio investments in the market;

- Relatively higher transaction cost regime;

- Attracting new listings.

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No. Market Name of

Organization

Major Recent Incidents and/or Challenges in Securities and Capital Market as a whole

15 Taiwan TSA 1. We have a new president and new government in May this year. Since they come from a pro-independent party (DPP),

Relationship between Taiwan and mainland China cold-off. Therefore, the enforcement of the signing of a Cross-strait

Trade in Services Agreement by Taiwan and mainland China seems to be impossible.

2. New government committee to do a complete pension reform-consolidate current 11 types of pension systems, and

propose a new law to the Legislative Yuan by May 20, next year. Such ambitious plan incurs fierce disputes and strong

opposition in society.

3. The depreciation of RMB causes a huge damage to about 4,000 small and median enterprises in Taiwan. These SMEs

buy the so-called Target Redemption Forward (TRF) and lose more than 6.5 billions of US$. Some SMEs had claimed

bankruptcy, most of these SMEs complain to regulators saying they were cheated by bank’s TMU. TRF tempest will

continues and impacts Taiwan financial market for a period of time.

16 Thailand 1 ASCO 1. ASEAN Economic Community (AEC)

The AEC will transform ASEAN into a region with free movement of goods, services, investment, skilled labor, and freer

flow of capital. Therefore, there will be an impact on market expansion, increase in cross border financial and trading

activities, as well as higher competition and more risk exposure. Better connectivity of infrastructure redesign, and business

processes and strategies is needed to be successful in highly competitive environment.

2. FinTech

FinTech is made up of many transformative new technologies, e.g., biometrics, cloud computing, cognitive computing,

distributed ledger technology (blockchain), machine learning / predictive analytics, quantum computing, robotics, that will

shape future financial services infrastructure. FinTech interest and investment grows rapidly. Global investment capital in

FinTech has increased from less than 1% to more than 8% of the capital pool in 2016. This growth brings challenges to

regulators. They have to reconcile how to apply existing regulation to new products and services. Consequently, regulatory

sandbox has been launched to allow testing of innovative products in a safe space.

3. Regulatory Reform

Global financial crisis forces the regulators review their existing rulebooks. More transparency driven and stricter

regulations were developed over years to safeguards the financial system from collapse. For example, MiFID II and MiFIR

entered into force in Europe and created changes in many areas of regulations, such as, trading venues, derivatives, third

country firms, automated trading, investor protection, and enforcement. Under interconnected world environment, the

effects happen when someone moves. Therefore, the challenges come to every entity in capital markets.

17 Thailand 2 ThaiBMA 1. Overall low economics growth;

2. Investment slowdown;

3. Interest rate decrease to the new low;

4. Yield curve shift down to the lowest level on Apr. 5, 2016, especially 10Y that decreased almost 100 bps. to

1.54% from last year;

5. Fund flows in and out the emerging markets according to the expectation of FOMC decision on raising the policy

rate;

6. BREXIT effect;

7. Fluctuation of exchange rate;

8. Fed Fund Rate expectation; and

9. Block Chain technology.

18 Turkey TCMA Istanbul Stock Exhange was demutualised and Borsa İstanbul was founded as incorporated company in April 2013

according to the new capital market law. Borsa İstanbul brought together all the exchanges operating in the Turkish

capital markets (derivatives exchange and gold and precious metals exchange) under a single roof. NASDAQ

OMX Group and Borsa Istanbul have concluded a wide-ranging agreement, which includes the delivery of market-

leading technologies and advisory services to Borsa Istanbul, and NASDAQ OMX taking an equity stake in Borsa

Istanbul. In May 2015, European Bank for Reconstruction and Development (EBRD) entered negotiations to

acquire a 10 per cent stake in Borsa İstanbul in a landmark deal which will support Turkey’s efforts to reshape its

capital markets.

Through pension reforms that took place at the beginning of 2013 government contribute 25% of premium paid in

order to support and expand the pension market.

Turkish Government is planning to change the status of voluntary private pension system into an auto-participation

scheme in order to increase the domestic savings of the country. The Government passed a law in August 2016

enabling auto enrolment for employees starting 2017. Enrolment in private pension system will put into action

gradually as a pilot study. In the beginning it will be applicable to new employees and persons change their work

and employees below age of 45.

Electronic Fund Distribution Platform of Turkey (TEFAS) began to operate in January 2015. TEFAS allows access

to all investment funds authorized by the Capital Markets Board and active in the capital markets through a single

platform, thus offering investors the ability to make comparisons between funds and alternative investment

instruments. TEFAS aims to increase the competition in fund portfolio management and consequently the fund

performances.

19 Vietnam1 VASB n/a

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No. Market Name of

Organization

Major Recent Incidents and/or Challenges in Securities and Capital Market as a whole

20 Vietnam2 VBMA The Government issued Circular No. 21/2012/TT-NHNN dated 18 June 2012 which is effective on 1 September 2012 to

govern the interbank lending.

21 Asian Region ASIFMA 1. Over-reliance on bank loans;

2. Large government/public sector borrowings “crowding out” the private sector, thus limiting their access to financing;

3. Very high “Statutory Liquidity Ratios” forcing banks to hold large volumes of government securities;

2. Fragmented markets with distinct legal systems and market structures;

3. Pension fund and insurance reform to broaden the institutional investor base in the local capital markets;

4. Lack of well-developed electronic systems and connectivity;

5. Unnecessary restrictions and requirements that are either complex or bring unintended consequences, which serve as

impediments to investment (particularly in India…withholding taxes on bond coupons, absolute limits on foreign

investment in government bonds and caps on total interest payable, regardless of perceived riskiness of issuer);

6. Cybersecurity threats and business continuity management;

7. Improvements to conduct and risk culture in financial institutions.

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V – 2. Specific Challenges in Equity Markets

No. Market Name of

Organization

Specific Challenges in Equity Markets

1 China SAC Generally, we intend to construct an equity market with multiple layers. By insisting on the reform of stock-issuance system,

the registration system will be introduced to China Market. Approval system to substantive examination will be replaced

by the system which focuses on information disclosure. For this purpose, we have to revise the Securities Law, reform our

securities regulators, and cultivate the issuer and intermediary of this market. It is a very tough challenge.

2 Hong Kong HKSA 1. Lower trading volume and valuation of Hong Kong equity market, limiting the ability to raise funds through IPO;

2. a. New mainland entrée and intensified competition;

b. Reduced trade volume, and increased in proprietary trading activities.

3. “Joint consultation on the proposed enhancements to the Exchange’s decision-making and governance structure for

listing regulation”, more stringent compliance and AML requirements for licensed corporations;

4. Increased market and operational risk by online trading

3 India 1 ANMI - Enhancing investors confidence in the capital market;

- Enhancement of participation by retail investors;

- Investor education process in non-metro area including developed rural areas;

- Enhancing levels of governance in the capital market;

- Enhancing the overall image of the market intermediaries; and

- Finding pragmatic solutions to current issues facing the capital/stock market.

4 India 2 BFF 1.Commodities segment brought under equity markets regulator SEBI so now there is only one regulator for both equity

and commodity markets;

2.International Stock Exchange coming up in the GIFT CITY at Gujarat State.

5 Indonesia APEI Low liquidity in the market;

Brokerage and underwriting fee’s war;

An easier, more transparent and more public IPO process starting with Government Related Companies;

Restriction on bank support.

Despite ongoing issues pertaining to liquidity and volatility as well as more recent concerns about slowing GDP growth

and rising inflation, there can be little doubt that Indonesia continues to hold attractive prospects for long-term investment.

The mixture of global and domestic factors that has prompted some companies to reduce or reconsider their equity issues

is largely of a temporary nature.

Greater depth of both the equity and bond market is vital as Jakarta competes with bourses in the ASEAN region to attract

foreign capital and improve businesses’ funding options at a time when the country requires ambitious plans for investment

in transportation and energy infrastructure. Substantial growth potential still remains to be unlocked, meaning the mid to

longer-term outlook for Indonesia’s capital markets remains bright.

6 Japan JSDA - Shortening the settlement period of stocks;

- Developing new methods to foster startup and growth companies (crowdfunding, shareholders community).

(Please refer to the “Specific Measures introduced/implemented for the Securities Market” 5 and 6.)

7 Kazakhstan NBK Kazakhstan’s stock market, including emerging companies, remains sluggish. Joint stock companies don’t release shares

in a free trade.

8 Korea KOFIA n/a

9 Laos LSCO The specific challenges in Lao Equity Market are:

Encourage more listed companies in Lao Stock Exchange;

Encourage to have more securities intermediaries in appropriate and sufficient quantity;

Introduce new regulations to facilitate the market.

10 Mongolia MASD Account opening, cash withdrawal, dividend collection is too manual, time consuming and costly, especially with

the settlement banks operating under the Banking Law of Mongolia. Online systems need to be provided, especially

for foreign investors;

There is still no reliable front and back office system for securities firms (maintaining two different systems (MDS

and back office) is hard);

Illiquid market, lack of quality stocks and lack of information on companies;

Costly and time consuming process for listing on the exchange, no leverage for potential issuer companies;

Securities firms support the current T+1 settlement system, however the regulator aims to reintroduce T+3. It is

preferable to have T+2 system and to not put all the risk/burden onto securities firms.

11 Myanmar SECM Currently, trading share of listed companies on YSX is only existing shares and listing without IPO.

It is important to increase the listed companies in YSX. - We continue to make efforts to facilitate companies to go to public,

cooperating with securities companies and so on. It is important to increase our good track record such as IPO to obtain

clear understanding of the merit of listing from companies.

Limitation of potential listed companies is key challenges. Among 241 Public Companies, only 40 companies are meeting

with the listing criteria of quantitative requirement at YSX rather than the qualitative requirements.

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No. Market Name of

Organization

Specific Challenges in Equity Markets

The lack of institutional investors is another impediment for market expansion.

It is important to encourage foreign participation to increase investor basis, but we have to prepare for that. There are a lot

of challenges we have to cope with. For example, we have to strengthen the market surveillance and oversight and protect

our market from money laundering (AML) and tax issues. - From the view points of foreign capital flow, it is needed to

cooperate with CBM.

Awareness of the financial knowledge of investors is important for market.

12 Nepal SEBON ● Lack of real sector companies;

● Provision of issuing shares at par;

● Concentration of bank and finance institutions;

● Provision of market expansion from foreign investment; and

● Adoption of standards for organizational strengthening of SEBON prescribed by International Organization of Securities

Commissions. (Associate Member of IOSCO with effect from July 2016)

13 Singapore SAS See the descriprion of “Major Recent Incidents and/or Challenges in Securities and Capital Markets as a Whole”

14 Sri Lanka SECSL - Lack of proper risk management framework in the market. Presently, the SEC is facilitating the establishment of a

Central Counter Party (CCP) mechanism jointly with the Colombo Stock Exchange (CSE);

- Attracting more foreign portfolio investments to the market;

- Promote new listings;

- Lower liquidity in the market;

- Lack of financial literacy among investors;

- Lack of foreign portfolio investments in the market; and

- Relatively higher transaction cost regime.

15 Taiwan TSA 1. Although economy shows a slight recovery, equity market is still stalled, and daily trading value decreases 15% this year;

2. Transaction (30.2%) and holding (39.15%) by foreign investor have increased while we are concerned with the

potential impact of inclusion of China A share in the MSCI;

3. The development of Fintech pushing some pressures on local securities firms.

16 Thailand 1 ASCO 1. Direct foreign investment for individuals

One measure of capital flows relaxation of the Bank of Thailand is to allow a specified group of individuals so-called

“qualified investors”, Thai residents with liquidity more than THB 100 million, to invest in securities abroad amounting to

USD 5 million per year without the need to go through local intermediaries. Furthermore, the BOT plans to allow Thai

residents with no liquidity limits to freely invest in offshore securities in next few years.

2. FinTech

With the growth in FinTech interest and investment around the world, new technologies come into effect every part of the

financial landscape, e.g., E-KYC on KYC, automatic advice on research, robo advice on asset allocation advice, algorithmic

trading on investment section, blockchain on execution, settlement, and safe keeping, as well as crowdfunding on fund

raising. Therefore, adjustment is needed for brokers to keep moving along with the change.

3. Liberalization of securities business

Since securities brokerage fees have been fully negotiable in 2012, severe competition comes to be one of the top issues

until the present. As a result of competition, brokerage fees keep declining, thus; slowdown in income and profit of securities

companies. Brokerage firms need to adjust themselves to provide more enhanced services to serve changing needs of

customer in order to be more competitive in the market.

17 Thailand 2 ThaiBMA n/a

18 Turkey TCMA Investor participation seems lacking. As it can be seen from the household assets, most of the household assets remains in

the deposit accounts. Participation in financial products can improve.

19 Vietnam1 VASB - Vietnam market is a frontier market with moderately low evaluation. Emerged challenge is to grow to be an emerging

market and raise market price to a reasonable level.

- Equity market is characterized by a large number of listed companies with low average capitalization. Government

companies and corporations need to be equitized and become listed companies on the stock market in order to increase

transparent spirit and efficiency of management. In addition, security market has more qualitative companies’ stocks.

- The lack of financial investment institution and domination by the majority of individual investors may lead to an

unstable development of security market together with fluctuated variables due to the cause of investors’ insights. The

solution is to promulgate regulations, prioritize in setting principles of investment.

- It is needed to develop new derivative products for risk management purpose in order to eliminate the consequence of

the investors as participating in the stock market because currently the investors only earn interests from buying stock

and profits from increasing stock price; and reverse thing is still impractical in the situation of lacking derivative tools.

20 Vietnam2 VBMA n/a

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No. Market Name of

Organization

Specific Challenges in Equity Markets

21 Asian Region ASIFMA 1. Lack of competition: exchanges in Asia are mostly monopolies. Alternative market structures and healthy innovation,

such as Alternative Trading Systems (ATSs), are needed to meet diverse needs of investors and to make the market more

efficient and liquid.

2. Scarce capital and collateral: cross-margining between cash, futures, options and OTC derivatives as well as flexible

collateral management may help Asia markets face the capital-short environment.

3. High explicit and implicit costs: Asian exchanges tend to have higher trading, clearing, and settlement fees as well as

high implicit costs compared with exchanges in developed markets.

4. Volatility controls and circuit breakers mechanisms: Circuit breakers should adopt well-designed structures and protocols

to maintain investor confidence while promoting market efficiency and facilitating price discovery.

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V – 3. Specific Challenges in Bond Markets

No. Market Name of

Organization

Specific Challenges in Bond Markets

1 China SAC For the reform of Bond Market, the bond-issuance system should be improved by offering diversified choices to investors

who may have varying potential demand and qualification. The mechanism of credit constraint will also be improved.

2 Hong Kong HKSA 1. Most of the bonds are OTC traded and lack of transparency to the public investors; The listed bonds, except few

government bonds, lacked liquidity in general.

2. Bond market in Hong Kong is under-developed when compared to the mature equity market.

3. Slower growth of the mainland Chinese economy, weakening RMB and liquidity crisis of some mainland cities and

state owned rnterprises (SOEs) affected investor confidences in bonds.

4. Under the linked exchange rate regime of HKD, Hong Kong lacked independency in the monetary policy and the bond

market will be affected by the rate hike of the FOMC in 2017.

3 India 1 ANMI The bond market as compared to the equity market is smaller in portion with identified participants like government,

corporate, financial institutions, mutual funds, etc. Indian retail investors have historically been moderately risk-averse in

their investing habits. Their savings have always found place in savings accounts, gold, fixed deposits, and real estate.

However, in the capital marketplace, investors have increasingly found comfort in equities, as opposed to corporate bonds.

While equity markets underwent a complete makeover in terms of infrastructure, trading regulations, product availability,

and technology; the bond market is yet to move up the curve. Indian corporate bonds worth Rs491,885.4 crore were issued

in FY16 of which 93.1% of corporate bonds are placed privately, where the cost structure is modified to suit both the

investor and issuer in question. Retail participation stood at a mere 6.9%. The now-decommissioned 12th Five Year Plan

(2012–17) pegged funding requirements for infrastructure projects at $1 trillion. This should encourage corporates to

explore bonds as an alternative route.

With implementation of the Bankruptcy Code and high infrastructure investment in the pipeline, we may expect India Inc.

to diversify its portfolio of borrowers and thereby inject the much-awaited activity in corporate bond market. With banks

coming under the asset quality radar and borrowers looking for long-term financing, bond market may begin to move

northwards, even if it is in baby steps.

4 India 2 BFF Same as ANMI

5 Indonesia APEI Low liquidity in the market;

Bringing bond to the general masses;

Creating a better and more transparent bond price reference;

Enhancement of the bond transactions reporting (through CTP system), though KPEI has a clearing system for bond

trading transaction, many of the participants deals directly among themselves without reporting.

6 Japan JSDA - Shortening the settlement period of JGBs

- Vitalizing the corporate bond market

(Please refer to the “Specific Measures introduced/implemented for the Securities Market” 1. )

7 Kazakhstan NBK Major challenges in a bond market are low level of demand, especially after the creation of one single governmental pension

fund (against 10 private pension funds).

8 Korea KOFIA n/a

9 Laos LSCO Laos is still in a preliminary stage of bond market development.

Previously, there are only two types of Government bonds issued in Laos including treasury bills (T-bills) issued by Ministry

of Finance and BOL bonds issued by Bank of the Lao PDR. Majority of T-bill are sold to commercial banks, and these

banks also work as an agent in the sale or transfer of T-bill. However, there is no law supporting the above function.

Currently, there are two main regulations (the LSC regulation on the corporate bond issuance and the LSX regulation on

the bond listing) to support bond market development and the LSX also completed the bond trading platform development

(the Bond system to support both corporate and government bond trading), On the other hand the MOF is focusing on

drafting of the degree on the Government bond and we expect to have a public company to issue the corporate bond at the

end of this year.

10 Mongolia MASD - Bond market mainly consists of Government bonds and its secondary market is only at an initial development stage;

- Settlement and prefunding system is different for the primary market bond trade, which is confusing and complicated for

investors, particularly the foreign;

- Savings rate provided by the banks and the Government bond coupon rates are high, which hinders issuance of corporate

bonds. Also, issuance of corporate bonds needs to go through almost the same process of IPO making.

11 Myanmar SECM 1. It is important to allow securities companies to join the Central Bank of Myanmar (CBM) auction to increase liquidity

of bond market and better capital management of securities companies.

2. Currently, banks are mostly buying in CBM auction. And other financial institutional investors should be allowed.

3. Secondary bonds market is needed to meet needs of bondholders. Now the system of operation is under discussion.

4. Currently, interest rate of Myanmar is 8 to 10 percent and bond coupon rate is 9% while inflation rate is 9.16%. So there

is no attractiveness to investors.

12 Nepal SEBON ● Low number of companies issuing bonds;

● Major investors are institutions;

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Organization

Specific Challenges in Bond Markets

● Lack of knowledge;

● Lack of legal framework for promotion; and

● Lack of interest of institution.

13 Singapore SAS The debt markets in Singapore are made up of three major segments – the Singapore government securities (SGS) market,

the Asian dollar bond (ADB) market, and the Singapore dollar corporate bond (SDCB) market. The largest is the SGS

market, followed by the ADB market which is denominated mainly in non-Singapore dollars. Participation in the

Singapore Government bond and corporate bond markets are presently mainly by institutional investors and Accredited

Investors, because of large ticket sizes of S$250,000 per lot.

To help popularize bonds as an asset class amongst mass retail investors, a new Singapore Savings Bond with a minimum

value of S$500 and guaranteed capital was rolled out to retail investors in Singapore. The take–up rate is dismally low.

To improve participation from the retail market in the bond space, MAS introduce two new regulations to facilitate

corporate bond offering to retail investors as Corporate issuers traditionally look to the wholesale bond market to meet

their funding needs due to higher costs involved in tapping the retail market. From today, corporate issuers will find it

easier and cheaper to tap the retail market by issuing plain-vanilla bonds through two new frameworks:

● First, under the Bond Seasoning Framework, wholesale bonds issued by issuers that meet eligibility criteria stipulated

by the Singapore Exchange (SGX) can be offered to retail investors after the bonds have been listed on SGX for six

months. These “seasoned” bonds can be re-denominated into smaller lot sizes and offered to retail investors on the

secondary market. Eligible issuers can also offer additional bonds to retail investors on the same terms as the

“seasoned” bonds without a prospectus. SGX has amended its rules to effect the framework, and issued a practice note

to provide guidance to issuers on the relevant procedures and processes.

● Second, under the Exempt Bond Issuer Framework, issuers that satisfy specified thresholds that are higher than the

eligibility criteria under the Bond Seasoning Framework can offer bonds directly to retail investors at the start of an

offer without a prospectus.

Current challenges in the bond markets are:

a) Lack of liquidity in the secondary bond trading market (especially in the oil and gas sector), which is required to create

more depth in the corporate and government bond market.

b) The current landscape is the lack of high grade new issuance with lots of real money ready to be soak up.

c) Use of ratings in SGD bond space – more than 80% of bond issues do not have credit ratings from accredited rating

agencies.

14 Sri Lanka SECSL - Low liquidity prevalent in the secondary market;

- Investment policy of institutional investors : The investment activities of most institutional investors and individual

reflect a predominately passive buy-and-hold investment strategy, which limits the secondary trading activities;

- Access to the market;

- Limited outreach of intermediaries;

- There are limited numbers of retail investors in the corporate bond market. The primary reason is the limited

number of brokers which provide services of corporate bonds to their clients. Also, their outlet branches outside

Colombo area are very law;

- Lack of demand: Limited participation of institutional investors such as pension funds, unit trusts, and insurance

companies who are the key player for the development of a debt market and for the mobilization of long-term

capital; and

- Lack of awareness among the investors.

15 Taiwan TSA Since the depreciation of RMB, the RMB-denominated bonds, “Formosa bonds” were not popular in the market, with 5

issues and a combined value of about RMB4 billion.

Bond market here expects US Fed will raise interest rate in December.

16 Thailand 1 ASCO No comment

17 Thailand 2 ThaiBMA Currently we see a rapid growth in corporate bond market, however the infrastructure development of the market is

insufficient to support such growth and this could cause the problem of systemic risk such as Settlement risk, etc. to arise.

With all being said, Corporate Bond Market Development plan known by the name “Corporate Bond Market 4.0” is

necessary in order to promote Market Integrity & Efficiency also to protect investor which in effect will decrease Systemic

risk toward 0.

Work scope will mainly focus on the current market failure area. Here we drafted the Corporate Bond Market Development

Road Map as follows:

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18 Turkey TCMA In Turkish market some private companies’ bond had first instance of default, this resulted in a sector meeting with the

leadership of TCMA to discuss how to improve corporate bond market. Following these meetings, a report has been sent

to regulatory body.

19 Vietnam1 VASB n/a

20 Vietnam2 VBMA Lack of tool and product for hedging. No IRS, bond future, VND option markets hence foreign participation in Vietnam

bond market is nonexistent.

No official benchmark curve for short end (1-12 month) that can be traded or used for swap transaction.

The government is trying to develop the corporate bond market but the progress is very slow due to lack of rating agency

and no diversified investor base. Most of the investors for bonds are banks and follow “Buy and hold” practice hence no

secondary market for corporate bonds.

21 Asian Region ASIFMA 1. Lack of calibration and consistency of local and international ratings, which limits the development of domestic bond

markets and foreign investor participation;

2. Lack of high quality, regular and benchmark-sized bond issuance;

3. Establishing a project bonds market in Asia to close the infrastructure gap;

4. Effects of extraterritorial regulations and their effects on local liquidity (i.e., MiFID II); and

5. Regulatory uncertainty, particularly jurisdiction-specific limits on issuance or bond guarantees (i.e., Indonesia’s foreign

currency hedging requirements, The inability of onshore entities to guarantee offshore issuance in India).

6. General lack of liquidity in secondary markets on account of the “Buy and Hold” mentality of investors (India, China)

7. Limited range of institutional investors such as pension and mutual funds, whose establishment is essential to the

development of fixed income markets. Some progress in recent years, but more needs to be done.

8. Withholding tax issues and administrative limits/ceilings on bond interest costs (India)

Corporate Bond Market 4.0

Primary market convention /

Code of conduct / Supervision Scripless

Standardization Real time DVPCentral Registrar

Corporate Bond Market 4.0

Fiduciary duty of

Intermediaries

Market Integrity Efficiency Investor Protection

Regulatory Fram

ework / Enforcem

ent

• Minimum requirements of Term

and Conditions , UW agreement

• Prospectus

• Dealer vsUnderwriter model

• Underwriter/FA

• Dealer

• Bond holder rep

GOAL

S

• Information disclosure

• Revisit Pricing methodology

• Pricing Standard

• Clearing & Settlement

• Mitigate settlement risk

• Optimize fees Reg

ulat

ory

Fra

mew

ork

/ Enfor

cem

ent

• Registrar/Custodian

Secondary market convention /

Code of conduct / Supervision

• Issuers

No Systemic Risk

GOALS

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V –4. Specific Measures introduced / Implemented for the Securities Market

No. Market Name of

Organization

Specific Measures introduced / Implemented for the Securities Market

1 China SAC The official plan covers 11 specific areas, including reducing entry barriers, liberalizing interest and exchange rates,

developing multi-layer capital markets, achieving capital account convertibility, and strengthening financial regulation,

among others. All of these pursuits are centered around two key tasks: interest rate liberalization domestically and currency

internationalization externally.

2 Hong Kong HKSA 1. SFC is taking steps to have a closer look at the Bond and Fund market especially to the Fund market;

2. Shenzhen-Hong Kong connect will be ready to be launched by the end of November 2016; and

3. The re-implementation of the After Market Auction Period on 25th July 2016, increased trading volume of HKEX.

3 India 1 ANMI Periodic changes/modifications aimed towards development and investors protection;

Simplifications in procedural areas like: Collections of Investors details called as “KYC” process which is “Know your

customer”;

Modifications to the process of raising funds from the Capital market like Initial Public Issue (IPO); follow – up IPO;

other modes of raising funds;

Emphasis on enhancing “governance” in the Capital/Stock Market;

Focus on investors education;

Focus on Investors protection; and

Focus on speedy grievance redressal process for investors.

4 India 2 BBF Periodic Changes/modifications aimed towards development and investors protection

• Simplifications in procedural areas like: Collections of Investors details called as “KYC” process which is “Know your

customer”;

• Modifications to the process of raising funds from the Capital market like Initial Public Issue (IPO); follow – up IPO;

other modes of raising Funds;

• Emphasis on enhancing “governance” in the Capital/Stock Market;

• Focus on investors education;

• Focus on Investors protection;

• Focus of speedy grievance redressal process for investors.

5 Indonesia APEI Growing the market capitalization through addition of more and more publicly listed companies – including more

Government Owned Enterprises.

Continuing education, to the public: General and University level. Through the cooperation between OJK, IDX and

Brokers, all sides understand the difficulty that the other sides face. We hope that there will be breakthrough in the

simplification and enforcement of processes.

Increased co-operation between the KSEI (Central Depository Agency) and the banks – through which investors can

monitor and control their portfolio through ATM – along with using internet means.

6 Japan JSDA 1.Shortening the settlement cycle of JGBs

In November 2015, based on the “Grand Design towards Shortening of JGB Settlement Cycle (T+1)” released by "The

Working Group on Shortening of JGB Settlement Cycle" in November 2014, the JSDA made partial revisions to “The

Japanese Government Securities Guidelines for Real Time Gross Settlement” to prepare for migration to a T+1 JGB

settlement cycle. The JSDA also made partial revisions to the “Rules Concerning Handling of Conditional Sale and Purchase

of Bonds, Etc.” in June 2016 to introduce “new GC repos under the subsequent collateral allocation method” and “a new

form of repo with the aim of further globalizing the JGB market” as measures to be addressed for migration to the T+1

settlement of JGB trades. (These revisions will come into force on the effective date of shortening of JGB settlement cycle

(T+1), which is scheduled to be introduced during the first half of FY2018)

2.Deliberating a unified audit process for segregation of customers’ assets

In July 2016, based on the findings of the Working Group on Segregation Audit of Customer Assets, the JSDA abolished

the “Agreed-upon Procedures Engagement” concerning the type of engagement of the segregation audit of customer assets.

The JSDA also partially revised the “Rules Concerning Appropriate Implementation of Separate Management of Customer

Assets by Regular Members,” to bring them into line with the “Compliance Assurance Engagement” and to introduce the

requirement for disclosure of the results of such audits. (The revision will come into force on March 31, 2017, in principle.

The requirement for disclosure will apply from announcements relating to audits conducted on or after April 1, 2018.)

3.Developing fair practices for information provision by analysts to the market

In September 2016, the JSDA enacted the “Guidelines regarding Interviews, etc. with Issuers and Information Conveyance

by Association Members' Research Analysts.” The promulgation of the Guidelines is in response to the recent practice

where Member Analysts obtain non-public information from an issuer at preview meetings and provide such information

to certain investors. This practice deviates from the primary role of the analyst and is problematic in terms of ensuring

market fairness and transparency. The Guidelines are also in response to the inappropriate distribution of information which

may be in violation of laws and regulations, such as the distribution of corporate information to investors, etc. by analysts

in Japan and overseas and the provision of analysis, evaluation, etc. that is not consistent with the information contained in

published analysts’ reports. The Guidelines discusses the nature of preview meetings and the nature of provision of

information obtained from an issuer and the provision of analysis and evaluation based on such information.

4.Revisions to financial and securities taxation system, etc.

The Nippon Individual Savings Account (NISA) system, introduced in January 2014, allows individuals 20 years of age or

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Specific Measures introduced / Implemented for the Securities Market

older domiciled in Japan to invest up to ¥1 million annually for up to five years in listed stocks, stock investment trusts,

and other eligible securities with capital gains and dividends earned on those funds being tax free. Effective January 2016,

the maximum annual investment amount allowed under NISA was increased from ¥1 million to ¥1.2 million, and effective

April 2014, “Junior NISA” was introduced, making it possible for minors aged 0 to 19 to open Junior NISA accounts

(maximum annual investment amount: ¥800,000). According to a survey by the Financial Services Agency (FSA), at March

31, 2016, there were ¥10.12 million registered accounts through which a total of ¥7.7554 trillion in assets had been

purchased.

The government is also progressing with unification of the taxation system for financial income. Effective since January

2016, investors are able to file their earnings on public and corporate bonds, etc., in the same way as can be done currently

with listed stocks, etc., expanding the range of financial products for which losses and gains can be offset to include public

and corporate bonds.

Further unification of the taxation system for financial income, including derivatives, is under discussion mainly from the

viewpoint of facilitating investment in diverse financial products and contributing to the realization of a comprehensive

exchange that handles all securities and financial products as well as commodity products.

In addition, the following tax exemptions relating to beneficiary interests issued by special purpose trusts (known as J-

Sukuk) were extended for three years: (i) exemption for profit distribution received by non-resident individuals or foreign

corporations; and (ii) exemption for registration tax when the originator repurchases real estate from the trust assets.

5.Shortening the settlement cycle of stocks, etc.

In July 2015, JSDA, the Tokyo Stock Exchange (TSE) and Japan Securities Clearing Corporation (JSCC) established the

“Working Group on Shortening the Stock Settlement Cycle (WG)” as its secretariat to conduct discussions amongst market

participants and related parties regarding shortening the stock settlement cycle in Japan (change of the settlement cycle to

T+2). In December 2015, the WG published “Interim Report of the Working Group on Shortening the Stock Settlement

Cycle,” which included the results of the discussions held by the WG and the target schedule. The WG then published the

final report in June 2016. The expected implementation date is set as the business day after the consecutive non-business

days in April or May 2019.

6. Developing new methods to foster startup and growth companies

In May 2015, JSDA revised and enacted self-regulatory rules to promote financing for startup and growth companies and

ensure liquidity of those companies’ stocks. The revision introduced an “equity-based crowdfunding system” and a

“shareholders community system” aiming to protect investors in unlisted stocks. The equity-based crowdfunding system is

a framework that links new and growing companies with investors through the Internet, and facilitates their financing by

enabling small equity investments from a wide range of investors. The shareholders community system is a regulatory

framework to allow securities firms to solicit investors who participate in a shareholders community. The system was

launched in response to needs for transaction and liquidation of stocks issued by unlisted companies, including regional

companies.

7 Kazakhstan NBK The NBK's activities concerning the regulation of the securities market in years 2014 and 2015 were directed at the

following:

- Developing of the securities market infrastructure;

- Strengthening the mechanisms of the protection of interests of consumers of financial services;

- Taking action which will contribute to strengthening the financial state of organizations having the licenses to conduct

professional types of activities in the securities market;

- Strengthening the mechanisms of supervising and control of the activity of organizations having the licenses to conduct

professional types of activities in the securities market;

- Strengthening requirements of submission the information from securities market organizations, increasing the

transparency of the information;

- Strengthening the mechanism of prevention the possibility of fraud including manipulating the securities market; and

- Strengthening requirements to the prospectus of bond emission.

8 Korea KOFIA The trading hours of the regular session of KRX Markets (equity/derivatives/commodities) will be extended by 30 minutes from August 1,

2016. Off-hours session of the equity market will be shortened by 30 minutes so the closing time will be the same as 18:00.

9 Laos LSCO 1. The Strategic Plan on the Lao Capital Market Development (2016-2025) has been approved by the government

with 8 objectives as follows:

1) To create all necessary and favorable conditions for enterprises to raise fund through capital market to increase the

quality and quantity of products and services;

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2) To have market instruments and mechanism readily to support the reform of enterprises;

3) To have comprehensive regulatory framework in compliance with Lao PDR’s current conditions & international

standards;

4) To ensure that the exchange, CSD, and securities intermediaries are operated smoothly with limited risks and be able

to integrate with regional and global markets;

5) To ensure that the ICT development is suitable with the size of capital market expansion and up to date;

6) To increase public participation, investor base and balance between individual & institutional investor involvement;

7) To have adequate capital market regulators, experts and professionals in both quality and quantity;

8) To enable Lao Capital Market to integrate with regional and global markets.

2. Development Strategies (12 Programs 38 Projects) outlined in the Strategic Plan on the Lao Capital Market

Development (2016-2025) :

1) Expanding no. of listed companies (2 projects);

2) Strengthening the quality of listed companies (2 projects);

3) Securities products development (4 projects);

4) Securities intermediaries establishment and development (7 projects);

5) LSX and CSD development (2 projects);

6) Investor expansion and protection (3 projects);

7) Securities related legislation formulation and amendment (3 projects);

8) ICT system development (4 projects);

9) Securities supervision activities development (1 project);

10) Training and education (2 projects);

11) Human resource development (4 projects);

12) International cooperation (4 projects).

10 Mongolia MASD Strengthening MASD as a Self-Regulatory Organization: collaborating and negotiating with the FRC on transfer

of some rights and responsibilities such as accreditation of professionals, monitoring of member firms; promoting

MASD among the market participants and taking part in policy development whenever possible;

Promoting the securities market among the public through organizing conferences, workshops and training;

Initiated signing of MoU between the market participants (exchanges, central depository and clearing house) in

order to promote collaboration and foster sound market development.

11 Myanmar SECM Now we are planning to make a survey to find the potential listed companies. First we will conduct the DICA to get the

update lists of companies and conducts with UMFCCI to make a seminar for sharing knowledge of IPO in stock exchange

and encourage to list in stock exchange.

12 Nepal SEBON ● Providing to see the market depth;

● Introducing over the counter market;

● Compulsorily dematerializing account; and

● Making direct deposit in investor’s bank account to refunding and giving dividend.

13 Singapore SAS See above

14 Sri Lanka SECSL Some of the key development initiatives facilitated/being facilitated by the SEC are:

1. Facilitate the implementation of a Central Counter Party (CCP) mechanism.

2. Facilitate the implementation of a Broker Back Office (BBO) & Order Management System (OMS).

3. Facilitate the demutualisation of the CSE.

4. Initiatives to develop the Corporate Bond Market

● Proposed and facilitated bringing withholding tax on corporate bonds in line with government Securities via the

Budget 2010.

● Proposed and facilitated the complete removal of withholding tax on corporate bonds through the Budget 2012.

As a result, the impetus for the corporate bond market growth was provided. Accordingly, the amount raised via

corporate bonds remained as Rs.68.3bn(2013), Rs.54.2bn(2014) and Rs.83.4bn(2015).

● Formulated a policy paper jointly with Colombo Stock Exchange (CSE) and the industry input to widen the

breadth and depth of the market. Key policy decisions/initiatives included;

- Approval for Primary Dealers (PDs) and other market intermediaries to engage in corporate debt trading;

- Streamlining issuing process and listing requirements at the CSE;

- Finalising eligibility criteria for brokering and dealing in corporate debt securities including SEC

qualification framework which was included in the CSE Member rules;

- Improving the reporting infrastructure for better information dissemination at the CSE;

- Imposing a minimum subscription ceiling of Rs.10,000 to enable retail participation in the corporate bond

market;

- Expanding awareness building activities on corporate bond market.

5. Facilitated the introduction of an Initial Public Offering (IPO) preferential share allocation mechanism for retail

investors and Unit Trusts.

● Relaxation provided under Gazette No. 1704/18 (20th May 2011) enabling private funds to have a maximum

20% exposure to listed securities is applicable to unit trusts as well.

6. Enabled inclusion of unit trusts that invest exclusively in Government Securities within the definition of

'Government Securities’ for the purposes of calculating Statutory Liquid Assets by Licensed Commercial Banks

and Licensed Specialised Banks (Directive 02/17/500/0540/001 dated 05th April 2013.

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7. Mandated listing of voting shares of Registered Finance Companies (RFCs).

8. Enabled listed companies to release Annual Reports in CD form.

9. Facilitated provisions for voice recording of broker dealings under section 3.2 of the new CSE Stock Broker Rules,

which were effective from August 2012

10. Carried out a research on transaction costs of other jurisdictions and facilitated the reduction of share transaction

costs at the CSE.

15 Taiwan TSA 1. Expanded product offerings and index services to drive continued product innovation:

The TWSE promoted the launch of commodity futures ETFs, such as gold and crude oil ETFs, allowing investors to

diversify their asset allocation choices. Furthermore, a number of domestically listed ETFs linked to international

markets were offered to provide global exposure to investors, including ETFs and leveraged/inverse ETFs tracking

Japan’s TOPIX index and the S&P 500. The TWSE further expanded its line of index solutions with the TWSE

Corporate Governance 100 Index, Electronics Leveraged 2X Index, Electronics Inverse -1X Index, TAIEX

Leveraged 2X Index, TAIEX Inverse -1X Index, and the TWSE TAIEX Small-Cap 300 Index. The establishment of

a foreign-currency denominated commodity trading mechanism is currently being evaluated.

2. Streamlined market management and trading mechanisms to improve efficiency and reduce risk:

To ensure the soundness of the trading mechanisms, the TWSE implemented regulatory changes, including relaxing

the price fluctuation limit from 7% to 10%, expanding the scope of day trading in order to increase stock market

liquidity, relaxing the margin limits and allowing lending institutions to control the limits by themselves. The

disclosure of market opening and closing information was also implemented to provide more immediate trading

information to investors. A new and comprehensive system was put in place to assess the operational risks of

securities dealers, and will serve as a reference for differentiated levels of supervision in the future. These

regulatory changes thus serve to enhance market supervision while relaxing restrictions on business operations.

3. Promoting New Effective Registration and Underwriting System for Straight Corporate Bonds :

Under the commission of the competent authority, TPEx began handling the effective registration operation for

straight corporate bonds issued by domestic and foreign issuers this year. The improved operation shortens the

waiting period for effective registration of bonds from 7 days to 3 days and offers bond issuers streamlined service

for simultaneous application of issuance and listing of bonds, which greatly simplifies the bond issuance process

and enhances the operational efficiency of the bond issuance market.

4. Planning and Supporting the Secondary Bond Market Development Initiative:

In support of competent authority’s “Secondary Bond Market Development Initiative”, TPEx proposed 12

recommendations, including allowing securities firms to establish or participate in B2C bond e-trading platform,

ensuring ample supply of 5-year and 10-year benchmark government bonds on the market, establishing an

international bond liquidity provider system, opening the trading of repo bonds originally offered to professional

investors only to retail investors, and developing Formosa bond ETFs.

16 Thailand 1 ASCO 1) Establishment of equity-based crowdfunding regulation

The SEC had announced the equity-based crowdfunding regulations to allow public limited companies and limited

companies to raise fund through crowdfunding portals approved by the SEC. The crowdfunding portals will screen the

companies intending to raise fund through their facilities; require such companies to disclose relevant information; and

provide mechanism for proceeds obtained from share subscription. For investors, they must become members of the

crowdfunding portals to gain access share offering information and, prior to making investment, must pass knowledge test

on risks associated with the investment. In case of retail investors, each investor is allowed to buy shares not exceeding

THB 50,000 per company and not exceeding THB 500,000 during the 12 month-period.

2) Easing the debt securities offerings process

The SEC had eased the process to facilitate debt securities offerings. An approval of two year program will be introduced

under the revised regulations enabling the issuer to make several offers for sale of debt securities by simply filing securities’

features and additional information in case of the event affecting investment decision making. Nonetheless, the issuer must

maintain its qualifications and compliance with approval conditions as well as disclosure requirements all through the

program.

3) Enhance the securities public offering’s process of non-listed firms

The SEC has amended rules governing issuers’ qualifications to further enhance the efficiency in the securities public

offering’s reviewing process of non-listed companies. The revised rules require the issuers of non-listed company not have

any records of severe misconducts for a certain period prior to securities offering submissions. For example, the issuer have

never been rejected any PO submissions due to suspicion in severe inappropriate behavior in the past five years.

4) Launched of the digital listing services (Digital IPO)

The SET, jointly with the SEC, launched digital listing services (Digital IPO), enabling all new securities (IPO, IFF,

REIT, and ETF) to be listed via electronic system, starting from January 25, 2016. The issuers could submit listing and

public offering applications to the SEC and SET through one-stop digital services.

5) Issued and reviewed several notifications and guidelines for members

ASCO continue to coordinate closely with the regulators in supervising and monitoring business conduct of members.

ASCO had issued and reviewed the securities business code of ethics for ASCO members, along with several notifications

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and guidelines, for examples

Association regulation on securities transfer: The stricter regulation was developed to ensure internal control on

customers’ asset protection, as well as, minimize fraudulent activities and exploitation of nominee accounts.

Operating guidelines for securities companies’ channels for receiving money from customers were developed to

minimize frauds from false claims of money transferred from customers.

17 Thailand 2 ThaiBMA 1. ThaiBMA launched the Code of Conduct for Quotations to ensure that no one can manipulate bond yields. So,

the process of yield quotation should be inspected before submitting to ThaiBMA to derive the Government

Bond Yield Curve. Then there are 3 persons include this process: Submitter, Checker and Reviewer.

2. ThaiBMA proposed Bond Consolidation method to The Public Debt Management Office (PDMO) as a tool for

managing the public debt.

3. ThaiBMA proposed Standard Practices for bond investment to the Office of Insurance Commission (OIC) for

insurance company.

4. ThaiBMA launched “ThaiBMA in Focus” on website for monitoring bond trading, especially fund flows, in case

of emergency situation.

18 Turkey TCMA ● Due to Turkey’s shift to GMT + 3 time zone, Borsa Istanbul’s operating hours changed to 09:40-18:10.

● To promote financial markets to fund infrastructure projects and limit the effects of financial volatility in economy (to

stabilize economy), Turkish Government passed another law to form a Wealth (Sovereign) Fund

19 Vietnam VASB - Vietnam needs to study new values and concepts of the securities market. Developing the derivatives market is the SSC’s

effort towards that orientation. As a new segment of the securities market, the derivatives market is to prevent risks for

the securities market and other fields of the economy, making investors feel assured when participating in the securities

market, helping it operate in a more stable and sustainable manner and perform better its’ the functions of mobilizing

and distributing capital and determining values.

- The bond market should be continued to develop with its leading role in the capital market, and to become the main

channel of capital mobilization for the State budget. To that end, the Deputy Minister raised a number of orientations for

the development of the market in the future, such as: to continue the institutional improvement for the market, including

the rules and standards of the market operations; to restructure the operation of the bond market, including the

restructuring of commodities and introduction of new ones, restructuring debt instruments; to develop the investor base

by expanding the base of institutional investors, investment funds, insurance funds, voluntary pension funds; to introduce

derivative products, gradually putting the derivative market into operation, preventing risks, facilitating the capital flows;

to continue improving the infrastructure for trading, depository, clearing and settlement; to implement the mechanism

of the settlement of securities transactions through banks and to develop credit rating agencies.

20 Vietnam VBMA - The Ministry of Finance of Vietnam is implementing the roadmap to develop Vietnam Bond Market from 2012 until

2020.

- Key legal documents were issued in 2011 such as: Decree 01/ND-CP/2011 on Government Bond Issuance and Decree

90/ND-CP/2011 on Corporate Bond Issuance which will be amended soon.

- More frequent big lot bond issuance is reducing the total outstanding bond numbers: Numbers of outstanding bonds: 420

bond codes (slightly down compared to around 447 codes in 2012). MOF issued the Decree on CRA service in Vietnam

in September 2014

- GMRA is prepared by VBMA and ADB that will help to develop the REPO market

- More frequent dialogs between regulators and market participants

21 Asian Region ASIFMA n/a

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V – 5. Measures to Invite Foreign Investment (De-regulation, Promotion Activities, etc.)

No. Market Name of

Organization

Measures to Invite Foreign Investment (De-regulation, Promotion Activities, etc.)

1 China SAC The PBC has permitted 3 kinds of foreign institutions accessing to the Inter-Bank Bond Market and Exchange Market last

year, including foreign Central Bank or Monetary Authority, International Finance Corporation and Sovereign Wealth

Fund (Central Bank Agency). Furthermore, foreign private institutional investors also got the permission to access the

Inter-Bank Bond Market without any investment quota in February, 2016. Meanwhile, the Shanghai-Hong Kong Stock

Connect is running well, and Shenzhen-Hong Kong Stock Connect is about to be launched.

2 Hong Kong HKSA 1. Adoption of Fintech- Certification authorities outside Hong Kong whose electronic signature certificates (“recognised

signing certificates”) have obtained mutual recognition status accepted by the HKSAR government and the electronic

signatures generated by these recognised signing certificates shall have the same legal status as that of handwritten

signatures within the applicable scope of the ETO in Hong Kong. The SFC considers that the use of the certification

services provided by such certification authorities outside Hong Kong could be accepted for client identity verification.

2. SFC is in the final stages of adapting our suitability requirement for product sales in the online world, including through

automated funds platforms and automated advice.

3. A new corporate structure for funds – open-ended fund company which will enable firms choosing this way of domiciling

in Hong Kong to also take advantage of new market access arrangements.

3 India 1 ANMI Steps to accelerate the process of further Economic growth and development;

Provide a conducive environment for investment;

Clarity in various laws governing the investment;

Speed in according various approvals; and

Ensure required infra-structure to support the development process.

4 India 2 BBF Focus on Investors protection; and

Focus of speedy grievance redressal process for investors.

5 Indonesia APEI Lower price spreads to lower the impact of increasing or decreasing share prices;

Continuing effort to achieve Investment Grade status for the Country (FITCH Rating Agency);

Promoting the Capital Market Industry through various International Expos and Events; and

System upgrades of the infrastructure systems to increase stability, safety and efficiency.

6 Japan JSDA The JSDA has regularly been holding “Japan Securities Summit” since 2008 in anywhere of the world financial centers

such as London, New York, Hong Kong and Singapore to appeal the benefit of Japan capital market and to promote

foreign securities investment into Japan.

In addition to the case of Japanese public bonds, the overseas investors are exempt from withholding tax on the Japanese

corporate bonds for eternity (this preference measure is called “J-BIEM”).

Japan is leading the discussion of ASEAN+3 Bond Market Forum (under ABMI) in order to facilitating the cross-border

issuance of and investment into the bonds in the region by standardizing and harmonizing the market rules, practices and

market infrastructures.

7 Kazakhstan NBK 1. Ensuring Protection of Rights and Interests of Investors in the Securities Market, Including Counter-Acting

Misconduct in the Securities Market.

With a view to protect interests of investors which use the services of brokerage organizations, a set of measures will be

taken to provide investors with a full and permanent access to information about balances and movements of financial

instruments and money they own which are maintained at personal accounts opened with brokerage organizations. Such

measures will allow investors to exercise on-line control over operations conducted by brokers across their personal

accounts.

In order to enhance measures aimed to ensure proper conduct in the securities market, including measures of punishment

for price manipulations and other kinds of abusive practices in the securities market, and increase their timeliness, a

comparable system (scale) of punishments for abusive practices in the securities market needs to be provided. This

objective needs to be implemented through revision of the amounts of administrative (criminal) penalties and transition

from fixed amounts of penalties to indexed ones. This implies that indexation of the amounts of penalties for

manipulations will be used in relation to such indicators as the amount of made transactions, amount of generated profit

or damage caused as a result of made transactions.

In addition to that, with a view to increase investors’ confidence in the stock market, a possibility of introducing the

compensation system for “unqualified” investors especially individuals will be considered; such compensations will be

provided for damages caused as a result of illegal use of monies of such clients and other unlawful actions on the part of

brokers, similar to the international practice.

The issue of required refinement of legislation on the securities market will be considered tentatively in 2016 – 2020.

2. Extending the List of Services Offered by the Stock Exchange.

The stock exchange will continue implementing strategic projects aimed to ensure flexibility of the stocks exchange’s

response to the market needs as well as to increase activity of the stock exchange members, by way of:

1) Further development of the user services, new software products that will provide additional technological

opportunities to the Kazakhstani and foreign investors for trading at the stock exchange via the Internet;

2) Development of a remote membership at the Kazakhstan Stock Exchange, that will help legal entities incorporated

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No. Market Name of

Organization

Measures to Invite Foreign Investment (De-regulation, Promotion Activities, etc.)

and acting pursuant to the laws of the states other than the Republic of Kazakhstan to obtain membership of the stock

exchange with respective access to trading in certain financial instruments provided they comply with the

requirements of the laws of the Republic of Kazakhstan and internal regulations of the stock exchange;

3) Increasing capacities of the brokerage companies and investors to have a direct access to the sectors of the stock

market and the financial derivatives market of the stock exchange as well as to establish a direct access to the foreign

exchange market of the stock exchange;

4) Introducing the deferred payments system (on the base of T+2) at the stock market with partial security, clearing and a

proper risk management system;

5) Introducing a clearing system and a settlement system at the stock exchange that will be complying with international

standards with a view to inrease operating efficiency, reduce the number/volumes of settlement transfers and expenses

at the stock exchange, minimize risks and protect the market players from defaults, including by using services of the

central counterparty.

8 Korea KOFIA n/a

9 Laos LSCO 1. Currently, LSCO has encouraged the financial institutions to provide custody services in order to facilitate the

investment of foreign investors;

2. Foreign securities firms are permitted to be a selling agent of a local securities company to attract more foreign

investors;

3. LSCO together with Lao Securities Exchange and market participants have co-organized the investment promoting

campaign to enhance securities investment for potential local and foreign institution and individual investors to

participate in such events;

4. Granting a reduction of corporate tax of listed companies by 5% of normal rate for the period of four years as from

the date of listing in the Lao Securities Exchange (effective at the end of 2010);

5. Exempting capital gain tax of individual and institutional investors from previously 10% (effective in 2012);

6. Exempting dividend tax of listed companies from previously 10% (effective in 2012);

7. LSX has been changed trading limitation from 1 share to 100 shares per a trading lot;

8. LSX has a plan to extend the daily close trading time from 11:30 AM to 13:30 PM in the nearly future;

9. LSCO is in the process of drafting regulation on non-prefunded for securities subscription which will allow

institutional investors to place their buy orders without placing full amount of deposit.

10 Mongolia MASD Need to develop long-term strategy and advocate with the policy makers. Currently, it may be said that the market is not

very friendly to the investors.

11 Myanmar SECM There have still challenges for foreign investors to be allowed to trade at YSX even after amending the Myanmar

Companies Act. The New Companies Act would enable foreign investors to hold a Myanmar company's shares with the

ratio up to certain percent. This means some Joint Venture companies become as Myanmar Companies. However,

business operations of Myanmar Companies with foreign shareholders may still be under some restrictions of relevant

regulations and commercial practices. That could keep foreign investors away from Myanmar.

12 Nepal SEBON Policy formulation underway.

13 Singapore SAS ASEAN Link is an intra-ASEAN connectivity platform to create greater ASEAN investment mobility amongst investors.

This would increase the efficiency of trading, paying and transferring of securities as well as market data distribution.

Investors can trade securities through their local broking partners just like how you would Thai securities.

ASEAN Link connects the exchanges systems in ASEAN, using an Inter-Connected Exchange Hub as the gateway in

order routing and market data distribution.

ASEAN Link is a collaboration of seven exchange markets from Indonesia, Malaysia, Philippines, Singapore, Thailand,

Ho Chi Minh and Hanoi. The collaboration aims to promote the development of ASEAN as an asset class by streamlining

ASEAN access, introducing cross-border harmonization and creating ASEAN centric products. The ASEAN Link

collaboration will bring greater investment opportunities to more people as well as bring greater liquidity to collaboration

members.

SGX has also expanded membership on the securities market to foreign based brokers abroad. These brokers, regarded as

remote trading members will observe their home rules and trade only for foreign investors. This is another means to

attract cross border investments and expand the pool of international participation. It will allow foreign investors to deal

into the Singapore markets with greater convenience and ease, which will lead to increased liquidity in the Singapore

market.

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No. Market Name of

Organization

Measures to Invite Foreign Investment (De-regulation, Promotion Activities, etc.)

14 Sri Lanka SECSL - Following investor forums were organised in partnership with the CSE:

•The Mumbai investor forum - 21st Feb 2013

•Two investor forums in Dubai, United Arab Emirates (UAE)

•Investor forum for Sri Lankan Diaspora - 1st June 2013

•Investor forum for Fund Managers based in Dubai - 3rd June 2013

•The Hong Kong investor forum - 9th September 2013

•Singapore investor forum -21st January 2014

•The London investor forum - 30th May 2014

•The New York investor forum - 4th September 2014

- The SEC in collaboration with the CSE hosted the Capital Market Conference on 9th October 2014

- Enabled relaxation of restrictions placed on foreign investments in unit trusts that invested in Government

securities through a Gazette Notice dated 18th August 2011.

15 Taiwan TSA TPEx introduced a number of new systems for the international bond market, including allowing foreign banks to offer and

issue subordinated debt in Taiwan and relaxing the qualification requirements for branches of foreign banks to offer and

issue international bonds in Taiwan. These new systems effectively increased the depth and breadth of our international

bond market.

16 Thailand1 ASCO Promotion activities

Thai bourse has joined hands with broker members as well as overseas partners to host the SET Roadshows in major cities

around the world throughout the year. In the events, hundreds of meetings were arranged, presenting Thai listed companies’

strengths and the Thai economy’s potential growth.

17 Thailand 2 ThaiBMA Euroclear accept the following Thai securities in Euroclear Bank: SOE bonds, corporate bonds, shares, warrants.

Effective date was December 11, 2015.

18 Turkey TCMA n/a

19 Vietnam1 VASB Decree No.60/2015/ND-CP which took effect on September 1st 2015 provides amendments and supplementation to a

number of contents related to foreign ownership caps in the securities markets of Vietnam; private and public offering;

overseas offering; redemption and tender offer of shares of public companies; securities listing and trading; securities

business organizations; and a number of regulations on real estate investment funds. These new contents have basically met

the market requirements in accordance with international practices and Vietnamese legal system, especially after the new

Law on Enterprises and Law on Investment took effect on July 1st 2015. The details are as follows:

- The proportion of foreign ownership in the Vietnamese securities market: Except the sectors with foreign ownership

ratio stipulated by investment legislation or international treaties, the Decree extends the cap to up to 100% in public

companies subject to their decision. The regulation ensures conformity with international treaties to which Vietnam is

a member, and consistency with the provisions of law on investment as well as other related regulations.

- The securities offering: The Decree 60/2015/ND-CP narrows the scope of governance of the private placement

provisions stipulated in Decree 58/2012/ND-CP, which now covers public companies and securities

business organizations only so as to conform to Article 123 of the 2014 Enterprise Law. In addition, to protect the

legitimate rights and interests of investors, the Decree supplements regulation on: Private placement of shares in

exchange for debts or equity and capital contributions in other enterprises; improvement of regulations to prevent the

law circumvention in private placement, and the organization of public offering to tacitly acquire a business; additional

provisions for binding accountability of issuers before the shareholders’ general meeting on the use of capital raised

from investors; completion of provisions on the public offering of a joint stock company formed after the

merger/acquisition to meet the current requirements of the business restructuring process in Vietnam, etc.

- Registration for securities trading and listing: the Decree regulates on the registration for securities trading and listing

in the spirit of associating the company going public and equitization with trading registration in order to protect

investors and bring the Vietnamese securities market closer to international best practices. In addition, the Decree also

amended some regulations on securities listing to match the real situation, reduce the number of administrative

procedures and protect the investor legitimate rights and interests.

- The restructuring of the securities market: Decree 60 extends the proportion of foreign ownership in securities

business organizations so as to push their restructuring process. Besides, the Decree adds with regulations allowing

securities business organizations to issue shares to raise their capital from the capital surplus obtained after during their

tranches of offerings or issuances, or from the differences between the selling price and the buying prices of treasury

shares, or from retained earnings and other legal sources of the equity.

- Regarding the restructuring of the commodity base, Decree 60 supplements provisions on (i) covered warrants; (ii)

real estate investment funds; (iii) overseas offering and listing of fund certificates.

- In addition to the above items, the provisions on redemption of shares, sale of treasury shares; tender offer of shares

of public companies have also improved with the decree, to be in line with the Law on Enterprises, international

practices and practical implementation.

After taking effect, Decree 60 is expected to facilitate the implementation of the following objectives:

(1) To strengthen the monitoring of capital mobilization and usage of enterprises; protect the legitimate rights and interests

of investors, boost the process of equitization and state capital divestment.

(2) To complete and make consistent the regulations to institutionalize the international integration commitments, open up

domestic and foreign capital flows, and assist the capital mobilization for businesses and the economy; enhance the

position of the Vietnamese securities market in particular and the country in general among the community of

international financial businesses.

(3) To promote the restructuring process associated with the development of the securities market; to narrow the grey

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No. Market Name of

Organization

Measures to Invite Foreign Investment (De-regulation, Promotion Activities, etc.)

market and widen the regulated market; Strengthening the publicity, fairness and transparency of the securities market

by associating equitization and share offering with trading registration on the UPCOM or listing on stock exchanges.

(4) To open the securities services market and add more new products to the market.

20 Vietnam2 VBMA - Develop derivative markets for hedging: VND/FX option, bond future (planned for 2017)

- Exempt withholding tax on interest income for Government bond foreign investors.

- Roadshow, PR, marketing trip to have open a dialogue with Foreign Investors.

21 Asian Region ASIFMA 1. Passporting of various types of licensing across jurisdictions;

2. Eliminate or add flexibility to rules governing use of offshore processing hubs in the region;

3. More reasonable capital requirements for financial service entities in line with risk;

4. Allowing international clearing/settlement of domestic bond issues, thereby providing greater convenience for

international investors to access local markets;

5. Removal of capital controls, facilitating easy remittance into and repatriation out of local markets;

6. Elimination of unreasonable hiring requirements for local entities, which raise costs;

7. More transparency in rules and regulations (including English translations);

8. More consultation with industry before formulating and introducing new rules and regulations;

9. Longer notice periods before introducing new rules and regulations;

10. Adoption of best-practices in corporate governance;

11. Rigorous cost-benefit analyses for new rules and regulations; and

12. More streamlined licensing processes in some jurisdictions.