APAC Monthly Private Wealth Legal Developments – August 2021

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.

Hong Kong

China Banking and Insurance Regulatory Commission extends preferential treatment for Hong Kong insurance industry

The China Banking and Insurance Regulatory Commission (CBIRC) has extended the preferential treatment accorded to Hong Kong under the China Risk Oriented Solvency System for another year, allowing Mainland insurers who cede businesses to qualified local Hong Kong professional reinsurers to continue to enjoy lower capital requirements until 30 June 2022.

Singapore

New Indonesia-Singapore double taxation agreement now in force

An updated double taxation agreement is now in force between Indonesia and Singapore. Amongst other things, the updates lower the withholding tax rates for royalties and branch profits, and provide for tax exemptions in source States for certain capital gains.

MAS seeks increased investigative powers

The Monetary Authority of Singapore (MAS) has published a consultation paper in which it seeks, amongst other things, legislative amendments that will enhance its investigative powers. Such proposed amendments include giving the MAS the power to require information from any person for the purposes of investigations and the power to enter premises without a warrant.

China

AML rules now cover wealth management subsidiaries, non-banking payment institutions, insurance agents and insurance brokers 

Extended anti-money laundering (AML) rules have come into effect. Amongst other things, these extended AML rules expand the scope of organisations subject to the rules to include loan companies, asset management subsidiaries of commercial banks, non-banking payment institutions, insurance agents and insurance brokers.

India

Bill to remove foreign investor tax introduced

An Indian bill which proposes to nullify a much-criticised 2012 law that retrospectively levied capital gains tax on companies for the indirect transfer of their Indian assets has passed India's lower house of parliament. The 2012 law had been the subject of a number of disputes between the Indian government and international investors.

SEBI encourages development of common industry-wide platform for mutual fund transactions and services

The Securities and Exchange Board of India (SEBI) has released a circular which will require Registrars and Transfer Agents of Mutual Funds to jointly develop a common industry-wide platform that will deliver an integrated, harmonised and enhanced experience for investors in the mutual fund industry.

Malaysia

FATCA agreement signed

The Malaysian government has signed an agreement with the United States government to implement the US Foreign Account Tax Compliance Act (FATCA), joining 113 other countries that have also implemented the FATCA. Under the terms of the agreement, certain Malaysian-based financial institutions must now identify accounts controlled by US persons and report that information to the Malaysian government for forwarding to the US Internal Revenue Service.

Indonesia

New Singapore-Indonesia double taxation agreement now in force

An updated double taxation agreement is now in force between Singapore and Indonesia. Amongst other things, the updates lower the withholding tax rates for royalties and branch profits, and provide for tax exemptions in source States for certain capital gains.

Thailand

SECT amends NAV calculation rules for UI Mutual Funds

The Securities and Exchange Commission, Thailand (SECT) has amended the regulations on the calculation and announcement of the Net Asset Value (NAV) of investment units and the price of investment units of ultra-accredited investor mutual funds. The amendments aim to ensure consistency with the guidelines of general mutual funds and to facilitate the operations of business sectors.

BOT releases Guideline for Blockchain Technology Adoption in Financial Services

The Bank of Thailand (BOT) has released the Guideline for Blockchain Technology Adoption in Financial Services ("Guideline"). The Guideline consists of four parts:

1. Blockchain business application
2. Blockchain governance
3. IT risk management
4. Legal risk management

BOT announces reduced lower limit of deposit insurance 

The BOT has announced that the Deposit Protection Agency will reduce the deposit protection that each depositor has in each financial institution to 1 million baht.

Philippines

Office for FinTech innovation launched

The Securities and Exchange Commission, Philippines (SECP) has announced the launch of the PhiliFintech Innovation Office (PIO), under the SECP's Corporate Governance and Finance Department. The PIO will focus on the regulation of the use of financial technology in the Philippines. It will facilitate the processing of the registration of new fintech companies as well as serve as the first point of contact for existing fintech companies.

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.