2018/2019 Edition of the Global Regulatory Update

Treasury and Trade Solutions 70 insurance providers) from “using” an unregulated third country’s benchmark in the E.U. from January 1, 2020. E.U. end users will cease to have effective access, via E.U. market participants, to third country benchmarks unless non-E.U. benchmark administrators choose to register their benchmarks in the E.U. A reduction in the number of benchmarks available in the E.U. will hinder the ability of E.U. banks, companies and investments institutions’ to hedge interest rate and other risks, and reduce the ability of E.U. investors to access certain markets (including those in APAC) particularly if that market’s primary benchmark is not compliant with the BMR. Ultimately, the result could be that many firms and individuals will not be able to access to financial instruments and contracts which reference non-E.U. benchmarks, including derivatives, loans, bonds and mortgages. In a survey conducted by the regional trade association ‘Asia Securities Industry & Financial Markets Association’ (ASIFMA), at least 55 benchmarks were identified across APAC markets that could be affected by the BMR. ASIFMA also believes that it will be challenging for the administrators of these benchmarks to obtain registration with the E.U. by 1 January 2020. 3) Trading & Markets Reform Over-the-counter (OTC) G20 derivative trade reporting is live in Australia, Hong Kong, Japan and Singapore. OTC G20 clearing is live in Australia, Hong Kong, Japan and soon in Singapore (1 October 2018). Margining of un-cleared swaps is live in Australia, Hong Kong, Japan, Singapore and Korea. In March 2018, the HKMA and Hong Kong Securities and Futures Commission (SFC) issued a joint consultation on further enhancements to the OTC derivatives regulatory regime in Hong Kong. The consultation covered (a) a proposal to mandate the use of Legal Entity Identifiers (LEI) for reporting obligations, (b) proposal to expand the clearing obligations for particular standardized interest rate swaps denominated in AUD, and (c) proposed factors for determining which products would be appropriate for a platform trading obligation. 4) Hong Kong Listing Regime On 30 April 2018, new rules announced by the Stock Exchange of Hong Kong (HKEX) came into effect. These rules broaden HK’s listing regime to permit (a) the listings of biotech issuers that do not meet any of the Main Board financial eligibility tests; (b) permit listings of companies with weighted voting right (WVR) structures; and (c) establish a new concessionary secondary listing route for Greater China and international companies that wish to secondary list in Hong Kong. Xiaomi, China’s smartphone maker, was the first to apply under the new rules which permit WVR structures whilst Ascletis Pharma, which is