Asia Pacific Financial Services Regulatory Updates, Quarter Two 2024

The Deloitte Asia Pacific Centre for Regulatory Strategy is pleased to share with you the key regulatory updates from the Asia Pacific (AP) region for Q2 2024.

This quarter sees major developments in the following three areas:
(i) financial products, instruments and services;
(ii) data and technology and
(iii) climate and sustainability.

AP regulators continue to enhance regulations related to financial products, instruments and services. In Indonesia, the Otoritas Jasa Keuangan (OJK) released a comprehensive framework designed to regulate margin financing and short selling activities in a balanced and risk aware manner. The new framework places a strong emphasis on risk management practices for both margin financing and short selling, requiring securities companies to have in place robust risk management frameworks. In India, the

Securities and Exchange Board of India (SEBI) published an updated version of ‘Alternative Investment Funds (AIFs)’ Regulations of 2012. The updated regulations focus on facilitating fund raising by investee companies in infrastructure sectors and enhancing due diligence requirements for AIFs and their personnel.

In China, the China Securities Regulatory Commission (CSRC) announced that the Regulations on the Management of Programmatic Trading in the Securities Market would become effective in October 2024. These requirements aim to strengthen the regulation of programmatic trading, promote its standardised development, and maintain the order and fairness of securities trading. The Regulation also aims to ensure alignment with the directives of the Central Financial Work Conference and the State Council on enhancing regulatory measures and promoting high quality development in the capital market.

Data and technology related regulations have been implemented across the AP region, which are expected to enhance efficiency and enable digitalisation of the financial sector further. In China and Hong Kong, the Shenzen and Hong Kong authorities announced a pilot launch of the Shenzen Hong Kong cross boundary data validation platform. The Hong Kong Monetary Authority (HKMA) has facilitated the development of the platform utilising blockchain technologies and data coding to provide a credible means for validating the authenticity of documents without requiring cross boundary transfer or storage of original documents. In Singapore, the Bank for International Settlements (BIS) and its partners announced the completion of the third phase of Project Nexus, which aims to seamlessly connect instant payment systems (IPSs).

In Australia, the Australian Prudential Regulation Authority (APRA) released a letter to all APRA regulated entities that emphases the importance of data back ups in supporting cyber resilience. The communication is in line with the APRA’s on going commitment to the supervision of financial institutions’ cyber security.

AP regulators continue to put their focus on climate and sustainability, by having in place regulatory frameworks to enhance the ability of their respective financial jurisdictions’ transition to a greener economy. In Hong Kong, the HKMA published the Hong Kong Taxonomy for Sustainable Finance. In Australia, the Treasury released the Sustainable Finance Roadmap, signalling the Australian government’s intention to deliver future finance reforms in line with the nation’s on going transition to net zero and related measures. In Japan, the Financial Services Agency (JFSA) published a report titled ‘Climate Related Scenario Analysis Next Step in the Banking Sector’, in which the JFSA outlines future initiatives related to scenario analysis and presents a framework that governs its next scenario analysis exercise.

For more information on these updates or other regulatory topics, please get in touch.