Welcome to Herbert Smith Freehills’ monthly private wealth industry updates in Asia.
Every month we survey ten Asian jurisdictions for legal developments concerning trust and estate planning which are of interest to the private wealth industry, and provide a succinct summary in a table format. The jurisdictions covered in the update are Hong Kong, Singapore, China, Taiwan, Japan, India, Malaysia, Indonesia, Thailand and the Philippines. We hope that these updates will prove to be a useful resource to keep private clients, business people, and lawyers abreast of legal updates in the region.
Companies Registry to remain searchable by bankers, accountants and lawyers
Plans have been announced in Hong Kong for the withholding of the residential address and identification document numbers of company directors on the Companies Registry from the public. The Hong Kong Secretary for Financial Services and the Treasury has said that after such plans are implemented, certain specified persons (which include bankers, accountants and lawyers) will be able to apply to access full details of those company directors if those specified persons are doing “relevant checks and work” – an example given by the Secretary includes bankers, accountants and lawyers doing know-your-customer checks.
MAS releases Compliance Toolkit for fund managers
The Monetary Authority of Singapore (MAS) has released guidance in the form of a “Compliance Toolkit” which aims to guide and facilitate licensed fund management companies, registered fund management companies and venture capital fund managers’ compliance with the various MAS approval, notification and reporting requirements and timelines.
MAS’ managing director remarks on decentralised finance and the future of money
The MAS has published the remarks of its managing director, Ravi Menon, at a recent lecture. Menon spoke on the decentralisation of finance across the three ‘I’s of the monetary stack — intermediaries, infrastructure, and instruments, and on how central banks and regulators can potentially shape this decentralisation in a way that upholds the critical values of money.
LRC recommends authorising the creation and enforcement of statutory Non-Charitable Purpose Trusts in Singapore
The Law Reform Committee (LRC) of the Singapore Academy of Law has published a report which recommends for the creation and enforcement of Non-Charitable Purpose Trusts (NCPTs) in Singapore. The LRC has provided that recent surveys of trust and estate practitioners have demonstrated a clear demand for additional means for families and businesses to manage and bequeath their assets, and that there is evidence of growing demand from social enterprises for new capital.
Cancellation of preferential individual income tax policies for foreigners working in China to occur in 2022
It is expected that beginning from 1 January 2022, preferential individual income tax policies for foreigners working in China will be cancelled. For example, there will no longer be individual income tax exemption of housing allowances provided to foreigners working in China by their employers.
Legal reforms aimed at removing obstacles for Japanese asset management companies to appoint foreign fund managers implemented
Legal reforms have been implemented in Japan for the purpose of removing obstacles for Japanese asset management companies to appoint foreign fund managers. Such reforms include but are not limited to making performance-based compensation paid by an asset management company to executives deductible from corporate tax under certain conditions, and exempting certain foreign nationals residing in Japan for work purposes from inheritance tax on their foreign assets.
RBI releases guidelines on declaration of dividends by NBFCs
The Reserve Bank of India (RBI) has released guidelines on the distribution of dividends by Non-Banking Financial Companies (NBFCs). The guidelines cover board oversight, eligibility criteria, quantum of dividends payable, and reporting. The guidelines are effective for the declaration of dividends from profits from the financial year ending 31 March, 2022 on.
SEBI consults on Supervision Voting Rights Shares framework
The Securities and Exchange Board of India (SEBI) has published a consultation paper on reviewing certain provisions related to the Supervision Voting Rights Shares Framework, including in relation to net-worth requirements of shareholders. Feedback is requested by 30 July, 2021.
SCM amends capital markets laws
The Securities Commission Malaysia (SCM) has announced several amendments to the Capital Markets and Services Act 2007 (CMSA), which came into force on 1 July 2021.
The amendments, effected through changes made to Schedules 6 and 7 of the CMSA, have widened the categories of sophisticated investors.
In addition, the amendments to Schedules 6 and 7 will enable Bursa Malaysia to undertake the registration of ACE Market prospectuses effective 1 January 2022.
Schedule 5 of the CMSA, which sets out the type of corporate proposals that do not require the SC’s approval, has also been amended to include the following:
- initial exchange offering of digital assets through a Recognized Market Operator; and
- an initial public offering (IPO) or cross-listing of the shares of a public company or listed corporation on a stock exchange outside Malaysia.
SCM releases guidelines on sustainable and responsible investment funds
The SCM has released guidance on sustainable and responsible investment (SRI) funds.
The guidelines set out the additional requirements to be complied with by any new or existing funds seeking to qualify as an SRI fund. They draw on and adopt best international practices, and are not intended to define or create a standard on sustainable and responsible investment products. However, management companies and fund managers are encouraged to keep abreast of global developments and adopt international best practices to meet client expectations on sustainability.
SCM releases guidelines on offers of shares by unlisted public companies to sophisticated investors
The SCM has released guidelines on the offer of shares by unlisted public companies (UPCs) to sophisticated investors.
The new guidelines aim to ensure that there are controls established to ensure that any offering, including any marketing or distribution of its shares by a UPC to sophisticated investors, is carried out in compliance with regulatory requirements. The guidelines also imposes notification and reporting obligations on the UPC for such offerings.
Bank Indonesia releases new regulations on FX transaction monitoring
Bank Indonesia has published Regulation of Bank Indonesia No. 23/5/PBI/2021 and Regulation of Board of Governor No. 23/11/PADG/2021 on Monitoring System for Foreign Exchange (FX) Transactions Against IDR. Under these regulations, Indonesian banks are required to connect their FX transaction system with Bank Indonesia’s FX transaction monitoring system called the SISMONTAVAR system, which monitors FX transactions on a real time basis.
The FX transactions against IDR that are required to be reported via SISMONTAVAR are:
- spot transactions (including tod and tom transactions) with minimum value of USD250,000 or its equivalent; and/or
- derivative transactions with minimum value of USD1,000,000 or its equivalent.
The regulations came into force on 2 June 2021 and 2 July 2021, respectively.
SECT consults on qualifications of settlor of trusts and trustees and conduct and duty of trustees
The Securities and Exchange Commission, Thailand (SECT) is consulting on proposed amendments to regulations relating to the qualifications of the settlor of trusts and trustees and the conduct and duty of trustees. The SECT stated that this consultation is aimed at facilitating the greater use of trust for transactions in the Thai capital markets that will eventually lead to a wider range of fundraising tools for businesses and more investment asset classes for investors. Feedback is requested by 30 July 2021.
The contents of this document are for reference purposes only. Some of the information comes from public sources and this may not be comprehensive, accurate or up to date; where we have relied on third party information and sources, this has not been verified by us. The document does not constitute legal advice, and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication, and any facts in this document should be checked for your specific circumstances at the time you wish to use or refer to them.