Commerce Secretary to Push EU to Lower Tariffs: Trump

U.S. Commerce Secretary Wilbur Ross will urge the European Union to lower its trade barriers, which are unfair to U.S. farmers and industry, Donald Trump said on Monday.  Firmly rejecting that view, the European Commission accused the U.S. president of “cherry-picking” data to twist what has become an increasingly fractious transatlantic debate. The EU is seeking to be exempted from planned U.S. import duties of 25 percent on steel and 10 percent on aluminum, but says Washington has not made clear how the exemption process works. Trump said in a tweet on Saturday the United States was ready to drop its tariffs if the EU lowered its “horrific” rates on U.S. products. On Monday, he tweeted that Ross would be speaking with EU representatives about eliminating “large tariffs and barriers”. “Not fair to our farmers and manufacturers,” he said. Representatives from the Department of Commerce did not immediately respond to queries on the content or timing of those discussions. The Commission said it expected to be in contact with Washington over the metals tariffs this week, but that no formal talks had been scheduled. It was still hoping for a clearer indication about the exemption process. 

Hong Kong Stocks Mark 5-wk Closing High as Trade War, Rate Hike Fears Ease

 Hong Kong’s benchmark stock index rose nearly 2 percent to its highest closing level in five weeks on Monday, as fears of a global trade war, and faster U.S. rate hikes eased. The rally was lead by financial firms as investors expect improving profitability at Chinese lenders and insurers listed in Hong Kong. Brokerage China Investment Securities (HK) also attributed the market strength to “expectations of foreign capital inflows and China’s economic restructuring.”

 

Nikkei Rises to 1-1/2-Week High; Suspected Scandal Caps Earlier Gains

Japan’s Nikkei share average rose to a 1-1/2-week high on Monday helped by tech shares, but early gains were trimmed as a suspected cronyism scandal dampened sentiment. The Nikkei ended 1.7 percent higher at 21,824.03 points, the highest closing level since Feb. 28, but lower than an intraday high of 21,971.16. References to Japanese Prime Minister Shinzo Abe, his wife and Finance Minister Taro Aso were removed from documents related to a controversial land sale, according to the documents seen by Reuters. Questions over the sale of state-owned land at a huge discount to a school operator with ties to Abe’s wife, Akie, have dogged Abe since the matter became public last year. “If this news did not sour the mood, the Nikkei could have tried 22,000,” said Yutaka Miura, a senior technical analyst at Mizuho Securities. The overall market was strong after February’s U.S. jobs report eased fears of inflation and aggressive interest rate hikes. Chip-related technology stocks advanced following gains on Friday on the Nasdaq, with Tokyo Electron up 3.1 percent, Sumco advancing 2.5 percent and Shin-Etsu Chemical adding 2.3 percent. Nikon Corp rose 1.5 percent and Canon Inc gained 2.0 percent. Exporters were also supported after the dollar made large gains against the yen following Friday’s U.S. employment report. Panasonic Corp climbed 2.7 percent and Nissan Motor Co rose 1.7 percent. The broader Topix rose 1.5 percent at 1,741.30. 

Thailand’s SET Moves Toward T+2 Settlement

The Stock Exchange of Thailand (SET) and market participants have confirmed their readiness to move toward the T+2 settlement cycle on March 2, 2018. SET has become one of the leading exchanges in ASEAN to move toward the T+2 cycle. This will align the operational process with international practice including Europe, and the United States.

 

 

Singapore and India Regulators Sign Fintech Agreement

The Monetary Authority of Singapore (MAS) and the Government of Maharashtra (GoM)1 signed a Memorandum of Understanding (MoU) on February 18, 2018 to strengthen cooperation in promoting FinTech innovation in the two markets. The agreement provides opportunities for FinTech start-ups in Singapore to set-up and build business relationships with FinTech companies at the Mumbai FinTech hub. As part of the agreement, the Government of Maharashtra and MAS will co-develop educational programs on FinTech and explore potential joint innovation projects on the application of key technologies such as digital and mobile payments, blockchain, and big data. The Government of Maharashtra will also facilitate the creation of a marketplace for FinTech solutions developed in Singapore and at the Centre of Excellence (COE) in Mumbai. Under the MoU, the Government of Maharashtra and MAS have agreed to exchange information relating to FinTech trends and discuss regulatory approaches to encourage innovation in the financial sector.

 

Iran Central Securities Depository Moves to T+2 Settlement

Effective February 6, 2018, the standard settlement cycle for brokerage transactions including stocksat Central Securities Depository of Iran (CSDI) was reduced from trade date plus 3 business days (“T+3”) to trade date plus 2 business days (“T+2”). The CSDI President meanwhile acknowledged that Central Securities Depository of Iran (CSDI) now plans to design and fully implement Delivery-versus-Payment system (DvP) standard settlement services as well as Central Counter-Party (CCP) in the very near future.

 

Euronext Says Commodity Investor Position Reporting to Launch in 2018

Euronext will begin publishing data on investors’ positions in its commodity derivatives the first half of this year, later than previously indicated by the financial market operator. Paris-based Euronext has been preparing to publish weekly commitments of traders (COT) reports to comply with MiFID II. COT data, already a feature of U.S. commodity markets, gives a clearer picture of trading activity by providing information on who has been buying and selling which products. Euronext initially aimed to launch the reports at the start of January but delayed them, citing the need to check the data being submitted by market participants. The reports will show changes in positions held by categories such as investment funds and commercial firms in Euronext’s agricultural commodity markets, which include its flagship milling wheat futures.

 

UK’s FCA to Seek Comments on Public Financial Services Register

Later this year, the Financial Conduct Authority (FCA) will consult on proposals to make information available to a wider range of individuals at authorized firms. The FCA and Prudential Regulation Authority (PRA) currently maintain a public Financial Services Register, “the FS Register”, of the firms they regulate and the individuals they have approved. In July 2017, the FCA published proposals to extend the Senior Managers and Certification Regime (SM&CR) to almost all regulated firms. Under these proposals, the FCA will only approve the most senior individuals within firms. This means that only Senior Managers will appear on the FS Register. Firms are responsible for assessing the fitness and propriety of their employees and ‘certifying’ certain individuals who are not Senior Managers, but whose jobs mean they can still have a significant impact on customers, firms and market integrity. In response to these proposals, the FCA received substantial feedback on the public value of the FCA maintaining a central public record of certified employees and other important individuals in firms regulated by the FCA who will no longer appear on the FS Register. This includes non-executive directors, financial advisers, traders and portfolio managers. The FCA has listened to this feedback and will consult by summer 2018 on policy proposals to address this feedback. In addition, the FCA plans to issue an update shortly on its work to improve the usability of the FS register, which incorporates feedback from the Work and Pensions Select Committee.

 

Monetary Authority of Singapore Seeks Comments on Regulations for OTC Derivatives

The Monetary Authority of Singapore (MAS) issued for consultation proposed regulations to require the trading of over-the-counter (OTC) derivatives on organized markets, in order to help improve market transparency.  This requirement will complete MAS’ implementation of the G20 OTC derivatives reforms. MAS proposes to impose obligations for the most globally-traded OTC derivatives, namely interest rate swaps denominated in US Dollar, Euro and Pound Sterling to be traded on organized markets, i.e. exchanges or other centralized trading facilities. These obligations will apply to banks whose gross notional outstanding OTC derivatives exceed $20 billion.  MAS expects that about 80% of Singapore’s market in these products would have to be executed on organized markets following the commencement of the proposed trading obligations. The US and the EU regulatory authorities have already implemented similar trading obligations for the same OTC derivatives products. MAS plans to seek equivalence determinations from the US and EU for exchanges and other centralized trading facilities in Singapore.  This will allow these markets in Singapore to be used by US and EU market participants to fulfill their trading obligations. Interested parties are invited to submit their comments by March 23, 2018.

 

Hong Kong’s SFC and Swiss FINMA Sign Agreement on Fintech

The Securities and Futures Commission (SFC) entered into an agreement with the Swiss Financial Market Supervisory Authority (FINMA) to establish a framework for cooperation on financial technology. Under the agreement, the SFC and FINMA will cooperate to share information on emerging Fintech trends, developments and related regulatory issues.  In addition, the agreement provides for a bilateral mechanism for referrals of innovative firms seeking to enter one another’s markets. The cooperation agreement came into effect on February 23, 2018 and is posted on the SFC website.