Categories
Regulation
  • Overview of Uzbekistan Automotive Sector 

    Source: Kenneth Lai, Veysal Usmanov, Shawn Abdurakhimov
    Date Submitted: 09 Sep 2018
    Views: 21
    Downloads: 1
    Including 85 member enterprises, UzAvroSanoat is the only producer of light and commercial vehicles in Uzbekistan. It has started 21 year ago since construction of the first automotive plant in Central Asia in Asaka, Andijan region. In 2004, "Uzavtosanoat" Association was transformed into Joint-Stock Company with the aim of production management efficiency growth.
  • Dual-Class Shares: The Good, The Bad, and The Ugly

    Source: Rocky Tung, Mary Leung
    Date Submitted: 09 Sep 2018
    Views: 2180
    Downloads: 56
    A Review of the Debate Surrounding Dual-Class Shares and Their Emergence in Asia Pacific
  • The Information Content of Sudden Insider Silence

    Source: Weikai Li, Claire Yurong Hong,
    Date Submitted: 11 Aug 2018
    Views: 1
    Downloads: 1
    We present evidence of investors underreacting to the absence of events in financial markets. Routine-based insiders strategically choose to be silent when they possess private information not yet reflected in stock prices. Consistent with our hypothesis, insider silence following routine sell (buy) predict positive (negative) future return as well as fundamentals. The return predictability of insider silence is stronger among firms with poor information environment and facing higher arbitrage costs, and a large fraction of abnormal returns concentrates on future earnings announcements. A long-short strategy that exploits insiders' strategic silence behavior generates abnormal returns of 6% to 10% annually.
  • Peculiar case of Differential Voting Right Shares in India

    Source: Manick Wadhwa, Ankit Wadhwa
    Date Submitted: 26 Jul 2018
    Views: 152
    Downloads: 5
    Analyses of the legal and valuation aspects of differential voting rights shares in India
  • A Theory of Financial Services Competition, Compliance and Regulation

    Source: Bryane Michael,
    Date Submitted: 04 Jul 2018
    Views: 614
    Downloads: 10
    A Theory of Financial Services Competition, Compliance and Regulation
  • Capital Market Performance During the Four Years of Narendra Modi's Government

    Source: Ved Malla
    Date Submitted: 13 Jun 2018
    Views: 118
    Downloads: 0
    Over the past four years, the government of Narendra Modi, the 14th Prime Minister of India, has made several landmark policy decisions and initiatives that have had a major impact on the Indian economy.
  • AsianFA: Off-Balance Sheet Securitization, Bank Lending, and Corporate Innovation

    Source: Yiwei Dou, Zhaoxia Xu
    Date Submitted: 31 May 2018
    Views: 91
    Downloads: 5
    We investigate how corporate innovation is influenced by banks' off-balance sheet securitization. Exploiting a recent mandate that removes the off-balance sheet status of some securitized assets, we find a reduction in innovation for firms  borrowing from affected banks. The reduction is concentrated among firms whose banks experience more downward pressure on regulatory capital ratios and greater market discipline, and firms more dependent on external financing. Affected banks raised loan spreads and cut loan amounts after the mandate. The results suggest that off-balance sheet treatment of securitization has a real effect on firm innovation through bank lending.
  • Can Technology Undermine Macroprudential Regulation? Evidence from Peer-to-Peer Credit in China

    Source: Haikun Zhu, Fabio Braggion, Alberto Manconi
    Date Submitted: 31 May 2018
    Views: 67
    Downloads: 5
    We study whether and to what extent peer-to-peer (P2P) credit helps circumvent loan-to-value (LTV) caps, a key macroprudential tool to contain household leverage. We exploit the tightening of mortgage LTV caps in a number of cities in China in 2013 as our testing ground, in a difference-in-differences setting, and we base our tests on a novel, hand-collected database covering all lending transactions at RenrenDai, a leading Chinese P2P credit platform. P2P loans increase at the cities affected by the LTV cap tightening relative to the control cities, consistent with borrowers tapping P2P credit to circumvent the regulation. The granularity of our data allows us to separate credit demand from credit supply effects, with a fixed effects strategy. Our results also indicate that P2P lenders do not adjust their pricing and screening to the influx of new borrowers after 2013, despite the fact that their loans ex post have higher delinquency and default rates. Symmetric effects are associated with a loosening of mortgage LTV caps in 2015. Our test provides empirical evidence on the capacity of P2P credit to undermine LTV caps. More broadly, our analysis informs the debate on the challenges posed by the interaction between FinTech and credit regulation.
  • Overview of Power Energy sector of Uzbekistan

    Source: Kenneth Lai , Veysal Usmanov, Shawn Abdurakhimov
    Date Submitted: 21 Jul 2018
    Views: 31
    Downloads: 2
    Due to the growing demand for power energy driven by economic growth in the country, Uzbekistan is set to reform power energy sector. Uzbekistan is the largest electricity producer in Central Asia with total installed capacity of c.14.6GW, as of 2017. There are 45 power plants (16 by UzbekEnergo – state-owned power energy company). UzbekEnergo generates up to 90% of the power energy while the rest is produced by autonomous thermal power stations of the industrial enterprises and small hydroelectric power stations of the Ministry of Agriculture and Water Resources. The electricity is transmitted and distributed via power transmission lines (with 0.4 - 500 kV voltage ranges) whose total length currently exceeds 243,000 km.

    Power generation sources are largely focused on thermal power (natural gas, coal, etc.) while renewable energy makes a small portion of the capacity. Uzbek government plans to increase the share of renewable energy to 19% by 2025E from 13% currently. 

    Hydropower is the only main source among renewable energy sources while solar power contributes very small amount to the overall power generation. By 2025E, it is planned to achieve more power generation from solar and wind energy. Renewable energy has significant growth potential in Uzbekistan. According to Asian Development Bank (ADB), the country has 18 GW hydropower potential but only 1.8 GW has been developed so far. Solar power also has a great potential thanks to the favorable weather conditions in Uzbekistan. Uzbekistan gets between 2,410 and 3,090 hours of sunshine every year according to UN studies and the ADB estimates that about 3.8 million hectares of land in Uzbekistan meet the basic technical requirement for hosting solar energy facilities. 
  • Safeguards against the Introduction of a Dual-Class Shares Structure

    Source: Rocky Tung, Mary Leung, CFA
    Date Submitted: 17 May 2018
    Views: 2940
    Downloads: 75

    Safeguards against the Introduction of a Dual-Class Shares Structure
     
    As revealed in a survey conducted in Asia Pacific by CFA Institute in March, a majority (60%) of the 450-plus respondents have not had any experience investing in firms with a DCS structure, which signalled the urgency for and need to educate investors and the general public on the implications of DCS structures.


    The survey, “Dual-Class Shares and the Demand for Safeguards,” revealed that respondents in the region were divided when asked whether DCS structures should be introduced to the market, with 53% opposing the introduction and 47% in favour. Regardless of their position on DCS, almost all (97%) respondents considered it necessary to enact additional safeguards if DCS structures are permitted.

    Among different possible safeguards, more than 90% of respondents considered it appropriate to implement enhanced mandatory corporate governance measures as well as time- and event-based sunset provisions, such as automatic conversion of shares with super voting rights to ordinary voting rights. Specifically, 94% of respondents considered it appropriate to introduce a time-based sunset provision; among which, 91% of such respondents considered it appropriate to convert shares with super voting rights to ordinary shares within 10 years. Separately, 93% of respondents considered introducing a maximum voting differential appropriate; 63% of these respondents found a 2:1 maximum voting differential optimal.
     

  • AsianFA---Does Public Information Disclosure Crowd Out Private Information Production?

    Source: Jia Chen, Ruichang Lu
    Date Submitted: 01 Apr 2018
    Views: 80
    Downloads: 2

    This paper investigates how public information disclosure affects private information production. We consider an increase in public information disclosure in the corporate bond market and measure information production by using the number of bond analyst reports, the number of pages in the reports, and the file size of the reports. We find that when public information disclosure increases, there is a reduction in private information production, indicated by fewer reports, fewer pages, and smaller file sizes. We then examine how pricing efficiency changes and find the lower delay of bond prices, bond prices that more closely approximate random walks, and shorter bond return drift after bond analyst reports or credit rating changes.

     

     

     
  • PRACTITIONER’S BRIEF: THE GOOD, THE BAD, AND THE MOSTLY BENIGN: RECONCILING HIGH-FREQUENCY TRADING’S MISUNDERSTOOD REPUTATION

    Source: Rich Blake, Alan Lok, CFA
    Date Submitted: 04 Sep 2018
    Views: 6895
    Downloads: 0
    This article qualifies for 0.5 CE under the guidelines of the CFA Institute Continuing Education Program. 
    We encourage CFA Institute members to login to the CE tracking tool to self-document these credits. 

    Based on the paper “Heterogeneity in How Algorithmic Traders Impact Institutional Trading Costs” by Tālis J. Putniņš and Joseph Barbara, available at https://www.arx.cfa/post/Heterogeneity-in-how-algorithmic-traders-impactinstitutional-trading-costs-4550.html

    This paper was recently recognized for excellence by the CFA Institute Asia-Pacific Research Exchange (ARX) at the 7th Annual Financial Research Network (FIRN) Conference. FIRN is a network of finance researchers and PhD students across Australia and New Zealand.

    Traversing the dense, tangled underbrush of an otherwise mostly explored section of securities terrain—the impact of automated, computerized trading—two researchers have demonstrated why it doesn’t pay to ignore the nuances of a complicated subject. Literally, it can cost billions to not heed the observations of authors Putniņš and Barbara, whose paper, “Heterogeneity in How Algorithmic Traders Impact Institutional Trading Costs,” is the subject of this ARX Practitioner’s Brief.

    The July 2017 paper is a wake-up call for institutional investors who may not be as vigilant as they think they are when it comes to getting best execution on block orders, if only because their defenses might well be focused on the wrong bad actors, that is, high-frequency traders (HFTs). HFTs, argue Putniņš (University of Technology Sydney) and Barbara (Australian Securities and Investments Commission), are unfairly stigmatized and singled out among computer-program–based or algorithmic traders (ATs) for driving up big-block trade implementation costs when in reality, according to an exhaustive study of trading data, their impact is negligible.

    In support of their argument, Putniņš and Barbara fully mapped and surveyed an algorithmic trading community comprising both HFTs, who transact a large number of orders at eye-blink speeds, and non-HFTs. In the process, they uncovered a variety of species and motives, some of which are even beneficial to institutions. On the surface, the ground the authors covered would seem cut and dried: grievances about HFTs have been voiced repeatedly, to the point where no one questions who in this narrative wears the black hat and who wears the white.

    What the authors sought to understand was whether the complaints against HFTs had merit. Was there more to the story than what generally has seeped into the mainstream media via books such as Michael Lewis’ Flash Boys?

    WHAT’S THE INVESTMENT ISSUE?
    The rise of electronic equity trading venues at the dawn of the 21st century emptied the trading floors, drove down execution costs, and opened the way for technological advancements, such as order-implementation speeds measured in milliseconds, that few could have ever imagined. By the time of the 2010 flash crash, the fundamental manner by which stocks were traded had radically changed. Although a few die-hard specialists were still clinging to their Big Board posts back on that spring day in 2010, the flash crash made it abundantly clear that algorithms had taken over. At the center of regulatory scrutiny post-flash crash was high-frequency trading, the best-known and most controversial form of algorithmic trading.

    With alpha scarce and trading venues fragmented, fund managers increasingly focused their energy on improving execution costs. For decades, the buy side railed against specialists front-running their institutional orders. Now, institutions face a new predator on their blocks: HFTs. These automated strategies account for more than half of the total volume during any given session, and some institutional investors claim they impede liquidity.

    As a result of concerns about being preyed upon, institutional investors are forced to break large orders into smaller pieces that need to be traded across multiple venues, making them more susceptible to HFTs. In turn, new liquidity pools and networks have been created to provide a safe space. Yet, as Putniņš and Barbara point out, some studies show that, at best, high-frequency trading and algorithmic trading lower spreads and improve price discovery, and at worst, represented a benign force. So are HFTs good, bad, benign, or what?

    HOW DO THE AUTHORS TACKLE THIS ISSUE?
    Putniņš and Barbara created a data cross-section reenacting trading of the largest 200 Australian equities (ASX 200 Index constituents) over a 13-month period (1 September 2014 through 30 September 2015), amounting to 273 trading days.

    Using unique trader-identified regulatory audit-trail data, they identified a subset of 187 of the most active nondirectional traders (AT/HFT) and measured their activity (roughly 25% of Australian volume on any given day) in terms of the impact on the execution costs for institutions, which control about 80% of Australian large-cap stocks. “Origin of order” identifiers, collected by the Australian Securities and Investments Commission, allowed the authors to reassemble smaller (child) orders back into larger (parent) ones.

    Upon close inspection, the AT/HFT gang of 187 proved decidedly heterogeneous. Putniņš and Barbara categorized these traders across a spectrum, ranging from those who drove costs up the highest (toxic) to those who lowered them the most (beneficial).

    WHAT ARE THE FINDINGS?
    The 12 most toxic traders increased the average order-implementation shortfall cost by 10 basis points or nearly double the cost without the harmful behavior. At the same time, the 14 most beneficial traders systematically decreased costs, effectively, in aggregate, countering the negative impact. However, this offset in aggregate would not have come as any consolation to those individual buyers and sellers specifically impacted by the toxic traders. “An investor that disproportionately interacts with harmful AT/HFT faced higher costs,” concluded the authors.

    Interestingly, HFTs were no more likely to be toxic than non-HFTs. And even those ATs/HFTs who drove up costs may have done so unintentionally, merely by trading on the most common entry and exit signals, behavior that could be described not so much as exploitative as lemming-like.

    WHAT ARE THE IMPLICATIONS FOR INVESTORS AND INVESTMENT PROFESSIONALS?
    First, for buy-side asset managers, it bears underscoring that execution matters. Potentially large cost savings can be realized from trading in a manner that avoids overexposure to toxic counterparties. Such savings could mean the difference between a fund that performs well and one that underperforms.

    Second, in terms of execution strategy, more caution should be exercised in smaller stocks, where toxic traders tend to be more active.

    Third, effort spent avoiding HFTs may be in vain because many HFTs are beneficial and can reduce institutional execution costs. At the same time, toxic non-HFTs should be avoided if one wants to minimize execution costs.

    Finally, from a regulatory perspective, the empirical measurement tools featured in this research could be used to better monitor markets and identify predatory trading behavior.

    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 

    Summarized by Rich Blake. Rich is a veteran financial journalist who has written for numerous media outlets, including Reuters, ABC News and Institutional Investor. The views expressed herein reflect those of the authors and do not represent the official views of CFA Institute or the authors’ employers.
  • Multi-Asset Strategies: The Future of Investment Management  

    Source: Larry Cao, CFA, Gregory C. Allen, Jason Hsu, Tham Chiew Kit, Darius Liu, CFA, Jeffrey Ptak, CFA, Brian Singer, CFA, Leslie Teo, CFA, Phillip Wool
    Date Submitted: 05 Mar 2018
    Views: 207
    Downloads: 0

    Despite the popularity of multi-asset strategies, especially after the global financial crisis in 2008, very few books have been written about the topic. The few books available, with their heavy use of mathematical formulas, are intended mostly for quants. There appears to be a void in terms of a multi-asset investing book for the majority of investors. This book is our attempt to fill that void.

    When we first discussed this project with Paul Smith, CFA, president and CEO of CFA Institute, Paul’s advice was that we should aim to produce the book on the subject, not just book. This is our first attempt at achieving that goal.

    We focused on three features in putting this book together: (1) concise: each chapter is short enough to be read in 15–20 minutes, (2) accessible: the book is written in plain English and is entirely formula-free, and (3) authoritative: we have engaged the help of some of the brightest minds in this area from around the world. If our readers think we have succeeded in these three endeavors, we shall be quite content.

    How Is This Book Organized?

    This book is about both concepts and practices in multi-asset investing. Part I focuses on two important concepts. Part II includes a few institutional case studies.

    Chapter 1 sets the stage for the entire book. It explains the types of products under the multi-asset umbrella, highlighting how (properly managed) multi-asset-strategy products are different from the more traditional balanced funds and funds of funds.

    In Chapter 2, Jason Hsu and Phillip Wool discuss how risk factor allocation can add value for investors who use asset classes in their asset allocation analysis. Although quants may find talking about this concept challenging without formulas, the two authors do just that. For the more quantitatively inclined, references to the more advanced papers are included.

    In Chapter 3, Brian Singer, CFA, examines the role of both dynamic asset allocation (DAA) and tactical asset allocation using his overall investment taxonomy. DAA is a challenging topic, and a significant number of investors confuse it with market timing. Brian disputes that misperception, citing authorities ranging from John Maynard Keynes to Gary Brinson.

    We dedicate Chapter 4 to risk parity, given its popularity among investors. Greg Allen analyzes both the theory and the historical performance of risk parity and provides a balanced and convincing assessment of the strategy.

    Risk factor allocation has long been the domain of academics and quants. The Morningstar Style Box is an intuitive illustration of how average investors can put the concept to use in their daily investing. In Chapter 5, Jeff Ptak looks under the hood and gives readers an overview of both the methodology and the application of this useful tool for retail investors.

    The last three chapters focus on real-life investor stories: A prominent Asian sovereign wealth manager and two veteran portfolio managers share their experiences in managing multi-asset portfolios.

    A key theme that we try to convey is that all roads lead to Rome. There is no single “best” or even “right” way to manage multi-asset strategies. And getting started does not require that you possess all the needed skills (of course, the more edge you have, the more likely you are to succeed).

    In Chapter 6, three GIC senior executives present GIC’s well-structured approach. GIC’s focus on the long term is an important feature and is appropriate given the long-term nature of its portfolio. GIC’s risk-and-return targets clearly reflect its emphasis on growing purchasing power over the long run.

    Chapter 7 consists of an interview with Dennis Stattman, CFA, a veteran portfolio manager at BlackRock. Dennis started managing global asset allocation funds as early as 1989 and is a true pioneer in the field. He goes into the details of how he manages the products as well as how he has performed over the years. We believe the conversation to be deeply rewarding and hope our readers agree.

    The book’s final chapter comprises a conversation with Ben Inker, CFA, a longtime portfolio manager at GMO who took over asset allocation products from Jeremy Grantham, the famed founder of the firm. Ben has a rather unique approach to investing, in general, and multi-asset strategies, in particular, that is rooted in both economic analysis and fundamental analysis and is implemented with a quantitative flair.

  • Webinar: China Property-The Significance of the Property Sector to China's Economy

    Source: Cheong Yin Chin, CFA, Luther Chai
    Date Submitted: 25 Feb 2018
    Views: 232
    Downloads: 0
    Residential home prices in China have been kept steady by an onslaught of tightening policy measures across the country since September 2016. With cities such as Lanzhou relaxing some of its restrictive measures at the start of this year, could we be on the cusp of an easing cycle?

    This on-demand 15-minute webcast explains the importance of the Chinese real estate sector and delivers a summary overview of our recent research reports. 
  • Impact of Market-Wide Circuit-Breaker on Trading Activity and Volatility: Empirical Evidence from Indian Markets

    Source: Latha S Chari , Pradiptarathi Panda, Sunder Ram Korivi
    Date Submitted: 17 Feb 2018
    Views: 1879
    Downloads: 14
    To protect market integrity, regulators across the globe have applied trading constraining mechanisms like market-wide circuit-breakers, price limits, stock-based trading halts and the like. In June 2001, Securities Exchange Board of India (SEBI) introduced the market-wide circuit-breaker mechanism for Indian markets in a similar manner to other markets. Till date the Indian market has applied these marketwide circuit-breakers six times. This study attempts to examine the impact of market-wide circuit-breakers on trading activity and volatility. We consider data of Nifty closing price, turnover and number of shares traded for six different windows with event day, event plus 1-3 days, and 10 days average. The study estimates intraday return, overnight return high low volatility and day time volatility followed by T-test to measure the significance difference between average turnover, number of shares traded, high low and daily volatility with event day. The study finds that the effect of market-wide circuit-breaker continues up to three post-event days.
  • MANIPULATION IN SINGAPORE EQUITIES AROUND COMPANY ANNOUNCEMENTS

    Source: Mr. Chan Fook Leong, CFA, Mr. Guruprasad Jambunathan, FRM
    Date Submitted: 06 Feb 2018
    Views: 32288
    Downloads: 123
    New research by CFA Singapore uncovers no evidence of broad-based market manipulation around company announcements on SGX. 
    • Analysis of announcements data from 2011-2016 suggests any potential instances of manipulation to be isolated incidents, not part of a broader phenomenon 
    • Research report recommends areas in which regulators may wish to strengthen oversight​​
     

    MANIPULATION IN SINGAPORE EQUITIES

     

    AROUND COMPANY ANNOUNCEMENTS​
     


     

    WHAT IS MARKET MANIPULATION?

    • Market Manipulation is defined as the deliberate creation of a false market in publicly traded securities with the aim of profiteering

    • The study did not segregate types of manipulation; it is all-encompassing including illicit activities such as insider trading and ‘front-running’​

    REPORT FINDINGS

    • No evidence of broad-based manipulation around company announcements on Singapore Exchange (SGX) between Jan 2011 and Dec 2016

    • Observed potential instances of manipulation around company announcements on SGX are standalone events and not part of a broader phenomenon

    • Demonstrates that regulatory measures have been effective in preventing broad-based market manipulation

    • Recommend certain announcement categories and sectors in which regulators may wish to strengthen oversight​

    METHODOLOGY
    • CFA Singapore and CRISIL analyzed publicly available data to determine the presence of market manipulation
    • Conducted at the overall market level by looking at announcement categories and sectors, specific subset levels such as market capitalization, listing board and domicile
    (S-Chips or non S-Chips) groups
    • Announcements were custom-categorized for more granular analysis: 4 SGX categories and 60 sub-categories re-grouped under 15 custom categories and 106 sub-categories. The study was done across three forms of returns and for multiple cumulative holding periods, pre- and post-announcement.
    • Visual inspection of price and volume performance around announcements used to identify the right methodology and key parameters to be adopted for a more formal study
    • Hypothesis testing, a validation study, and robustness checks (stress tests) were conducted to ensure the stability of findings
  • Sex, drugs, and bitcoin: How much illegal activity is financed through cryptocurrencies?  

    Source: Sean Foley, Jonathan R. Karlsen, Talis J. Putnins
    Date Submitted: 02 Feb 2018
    Views: 310
    Downloads: 0
    Cryptocurrencies have grown rapidly in price, popularity, and mainstream adoption. The total market capitalization of bitcoin alone exceeds $250 billion as at January 2018, with a further $400 billion in over 1,000 other cryptocurrencies. Over 170 “cryptofunds” have emerged, attracting around $2.3 billion in assets under management. What was once a fringe asset is quickly maturing.
     
    The rapid growth in cryptocurrencies and the anonymity that they provide users has created considerable regulatory challenges, including the use of cryptocurrencies in illegal trade (drugs, hacks and thefts, illegal pornography, even murder-for-hire), potential to fund terrorism, launder money, and avoid capital controls. There is little doubt that by providing a digital and anonymous payment mechanism, cryptocurrencies have facilitated the growth of “darknet” marketplaces that trade illegal goods and services.
     
    In a recent research paper, we quantify the amount of illegal activity that involves the largest cryptocurrency, bitcoin. As a starting point, we exploit several recent seizures of bitcoin by law enforcement agencies to construct a sample of known illegal activity. We also identify the bitcoin addresses of major illegal darknet marketplaces. The public nature of the blockchain allows us to work backwards from the law enforcement agency bitcoin seizures and the darknet marketplaces through the network of transactions to identify those bitcoin users that were involved in buying and selling illegal goods and services online. We then apply two econometric methods to the sample of known illegal activity to estimate the full scale of illegal activity.
     
    We find that illegal activity accounts for a substantial proportion of the users and trading activity in bitcoin. For example, approximately one-quarter of all users (25%) and close to one-half of bitcoin transactions (44%) are associated with illegal activity. The estimated 24 million bitcoin market participants that use bitcoin primarily for illegal purposes (as at April 2017) annually conduct around 36 million transactions, with a value of around $72 billion, and collectively hold around $8 billion worth of bitcoin.
     
    To give these numbers some context, the total market for illegal drugs in the US and Europe is estimated to be around $100 billion and €24 billion annually. Such comparisons provide a sense that the scale of the illegal activity involving bitcoin is not only meaningful as a proportion of bitcoin activity, but also in absolute dollar terms. The scale of illegal activity suggests that cryptocurrencies are transforming the way black markets operate by enabling “black market e-commerce”. In effect, cryptocurrencies are transforming the black market much like PayPal and other online payment mechanisms revolutionized the retail industry through online shopping.
     
    In recent years (since 2015), the proportion of bitcoin activity associated with illegal trade has declined. There are two reasons for this trend. The first is an increase in mainstream and speculative interest in bitcoin (growth in the number of legal users), causing the proportion of illegal bitcoin activity to decline, despite the fact that the absolute amount of such activity has continued to increase. The second factor is the emergence of alternative cryptocurrencies that are better at concealing a user’s activity (e.g., Dash, Monero, and ZCash). Despite these factors and numerous darknet marketplace seizures by law enforcement agencies, the amount of illegal activity involving bitcoin remains close to its all-time high.
     
    In shedding light on the dark side of cryptocurrencies, we hope this research will reduce some of the regulatory uncertainty about the negative consequences of cryptocurrencies. Hopefully, more informed policy decisions that assess the costs and benefits will contribute to these technologies reaching their potential. Our paper also helps understand the intrinsic value of bitcoin, highlighting that a significant component of its value as a payment system comes from its use in illegal trade. This has ethical implications for bitcoin as an investment. Third, the techniques developed in this paper can be used in cryptocurrency surveillance in a number of ways, including monitoring trends in illegal activity, its response to regulatory interventions, how its characteristics change through time, and identifying key bitcoin users, such as “hubs” in the illegal trade network.
     
    For more information, download the paper at https://ssrn.com/abstract=3102645.
  • Are We Really Putting Investors First?

    Source: Andrew Stotz, Ph.D., CFA
    Date Submitted: 04 Feb 2018
    Views: 13043
    Downloads: 0



    Are we really putting investors first? This is a story about ethics which highlights what I have learned from CFA Institute Code of Ethics and Standards of Practice.

    The world of finance is filled with scams, dishonesty, and outright criminal activity. Demanding that financial professionals apply the same standard of behavior to their clients that we would for our family members is the first step to building a future based on ethical principles. "Care for clients as you would your mother."
  • 金融周期下的政策选择

    Source: 施东辉博士,上海证券交易所资本市场研究所所长
    Date Submitted: 08 Jan 2018
    Views: 506
    Downloads: 7
    2017年12月17日,由CFA中国上海主办的2017年度上海金融分析师年会暨CFA资格认证授证仪式成功举办。近700位来自国内外知名金融机构的金融专业人士、政府官员和学界人士汇聚一堂,在为2017年度新晋CFA资格认证持证人举杯欢庆的同时,也对金融投资行业热点趋势和职业发展规划进行分享。

    会议中,CFA中国上海很荣幸地邀请到了来自上海证券交易所资本市场研究所的所长施东辉博士与在座来宾分享了“金融周期下的政策选择”。
  • Heterogeneity in how algorithmic traders impact institutional trading costs

    Source: Joseph Barbara
    Date Submitted: 10 Dec 2017
    Views: 282
    Downloads: 0
    Technology has fundamentally transformed how trading occurs on financial markets, but not everyone agrees that it is for the better.  Few changes in how securities are traded have ever generated as much debate and disagreement as algorithmic and high-frequency trading (AT and HFT).  On one hand, many academic and regulatory studies find that AT/HFT in aggregate is beneficial (e.g., lowering spreads and improving price discovery) or at worst benign. Yet, at odds with this view, many institutional investors claim that finding liquidity for large orders has become more difficult and their trading costs in contemporary markets are worse than before the technological advancements. 
     
    We reconcile these conflicting views using unique regulatory data for the Australian equities market. We show that behind the aggregate effects of algorithmic and high-frequency trading (AT/HFT) lies rich heterogeneity in the effects of individual traders/algorithms.  We find that the most harmful traders double the costs of executing institutional parent orders.  Beneficial traders offset much of this increase.  HFTs are no more likely to increase institutional trading costs than non-HFTs. We identify other characteristics that distinguish harmful and beneficial traders.  The paper explains why AT/HFT appear detrimental to some investors despite being beneficial or benign in aggregate.

    The paper can be obtained here: https://papers.ssrn.com/sol3/Papers.cfm?abstract_id=2813870

     
  • SGX Consultation Paper on Enhancements to Continuous Disclosures

    Source:
    Date Submitted: 08 Dec 2017
    Views: 1514
    Downloads: 0
    Singapore Exchange (SGX) has proposed to recalibrate disclosure requirements under the Listing Rules for areas of concern to both the market and the exchange.
     
    These changes cover the following areas:
    1. Secondary fund-raising
    ◾Additional upfront and prominent disclosure of the discount, ratio and other principal terms for rights issues.
    ◾A directors’ statement on why the rights issue is in the best interest of the issuer and their basis for forming such a view including justification for any discount.
    ◾Additional disclosure of the use of proceeds and intended use of unutilized amount if a rights issue takes place within a year of another fund-raising.
    ◾To announce specific usage of funds when disbursed if they were earmarked for “general working capital purposes” during the fund-raising exercise.
     
    2. Interested Person Transactions
    ◾Interested Person Transactions below S$100,000 are no longer exempted from announcements or shareholder vote.
    ◾Additional disclosure on the nature of the relationship with the interested person.
    ◾Identify the relevant director, CEO or controlling shareholder of the issuer who will be covered by the IPT mandate.
     
    3. Significant transactions and loans
    ◾Additional disclosures for loans that are not part of the issuer’s ordinary course of business.
    ◾Explanation on why no valuation was done for an acquisition or disposal of assets that is a major transaction except if the transaction involved shares.
    ◾Appointment of a competent and independent valuer for significant asset disposals.
     
    Detailed information can be found on the below official hyperlinks:
         
    We would appreciate if interested members could leave your comments on ARX or email me by 06th January 2018. CFA Singapore will submit a collective response to SGX if there are substantive comments. If you would like your identity to be kept confidential, please let us know in your response to us.
     
    Thank you.
  • AFM – The Loud Silence of Suppressed Short-Sale Demand

    Source: Jinjuan Ren, Yinghui Yu
    Date Submitted: 07 Dec 2017
    Views: 42
    Downloads: 2
    Utilizing the special institutional setting in the Chinese securities market, we innovatively propose suppressed short-sale demand as a new measure of short-sale constraint. We employ the revealed short-sale volume of shortable stocks and use a hedonic model to estimate the suppressed short-sale demand for non-shortable stocks. A higher short-sale demand being suppressed indicates a more binding short-sale constraint. Consistent with Miller (1977)’s overvaluation theory, we find that suppressed short-sale demand negatively predicts future returns, and such relation concentrates among firms with poor information environment. Consistent with Diamond and Verrecchia (1987)’s reduced-pricing-efficiency theory, we find that a higher suppressed short-sale demand is associated with a greater price delay and a stronger post-earnings-announcement-drift.
  • MAS Consultation Paper on Execution of Customers' Orders

    Source:
    Date Submitted: 06 Dec 2017
    Views: 1093
    Downloads: 0
    The Monetary Authority of Singapore (MAS) is proposing to: 
    - formalize expectations for holders of a capital markets services (CMS) licenses, banks, merchant banks and finance companies to have in place policies and procedures to place and/or execute customers’ orders on the best available terms to support fair outcomes for customers; and
    - enhance the existing business conduct requirements, applicable to CMS licensees, banks, merchant banks and finance companies, relating to handling of customers’ orders. 

    Specific Questions:
    1.    MAS seeks comments on the Best Execution requirements in the draft Notice and the draft guidelines to the Notice, set out in Annex 1 and 2.
    2.    MAS also seeks comments on the handling of comparable customers’ orders requirement set out in the draft notice. 

    Both Annex 1 and 2 are to be found on the below official hyperlink:
    http://www.mas.gov.sg/News-and-Publications/Consultation-Paper/2017/Consultation-Paper-on-Execution-of-Customers-Orders.aspx

    We would appreciate if interested members could leave your comments on ARX or email to me by 13th December 2017. If you would like your identity to be kept confidential, please let us know in your response to us. Thank you.
  • Who Should Regulate Investment Advisers?

    Source: Dr Ben Charoenwong, Dr Alan Kwan, Dr Tarik Umar
    Date Submitted: 04 Dec 2017
    Views: 3723
    Downloads: 25
    We study the change in a jurisdiction of state and federal investment adviser regulators on investment adviser misconduct in the United States. Compared with advisers who did not experience the re-jurisdiction, we find evidence suggesting that misconduct increased after mid-sized investment advisers were required to switch from SEC to state regulation.
  • CFA Societies Australia: Submission to the Australian Investment Securities Commission on the National Financial Literacy Strategy

    Source: Susan Morey
    Date Submitted: 11 Dec 2017
    Views: 12615
    Downloads: 27
    CFA Societies Australia: Submission to the Australian Investment Securities Commission on the National Financial Literacy Strategy
     
  • Explaining Downward-rigid CEO Compensation: An Information Asymmetry Perspective

    Source: Yiqing Lu
    Date Submitted: 28 Nov 2017
    Views: 14
    Downloads: 0
    CEO compensation rarely gets cut, and almost every component of it increased in early 2000. I consider a two-period contracting problem in which a board privately knows its CEO's matching quality with the firm that changes over time. The board faces a trade-off: Revealing good information makes the CEO work harder, but it is costly. To save the information revelation cost, the board commits to a back-loaded compensation plan that features only upward adjustments in fixed and performance-based pay. This paper also considers extensions in which CEOs have transferable skills and sheds light on bonus caps and compensation disclosure policies.
  • Asset pricing implications of your mutual fund manager's constraints

    Source: Pratish Patel, Brian Ayash, Ziemowit Bednarek
    Date Submitted: 26 Nov 2017
    Views: 165
    Downloads: 3
    By the end of 2015, U.S. mutual funds managed $15 trillion in assets. These funds control about 25% of the equity and 40% of the commercial paper market. As a result, regulations affecting these funds have asset pricing implications. In this paper, we analyze the liquidity management constraint imposed on these funds by the Investment Company Act of 1940. Due to the Act, some funds do not trade illiquid stocks. The non-tradability of these stocks leads to sub-optimal risk sharing. In a competitive equilibrium, we show that this constraint generates the ``betting against beta'' phenomenon. Moreover, because of this constraint, alpha is non-zero in general. Adding factors to eliminate alpha is therefore a futile exercise. Lastly, we empirically corroborate the theory by offering an alternate explanation of the distress risk anomaly. 
  • Japanese Banks: BOJ's Take on Financial Stability

    Source: David Marshall
    Date Submitted: 30 Oct 2017
    Views: 404
    Downloads: 0
    • In its latest financial stability report the BOJ highlights the unusually low profitability of Japanese banks and expresses concerns about the soundness of some lenders and risks to the efficiency of credit allocation
    • Too many lenders are fighting for a shrinking market as the population and the number of firms declines
    • Nevertheless, domestic lending has been growing at around 3%, more strongly at the regional banks than the majors, led by real estate lending to SMEs
    • Overseas funding costs have risen which has led Japanese banks to slow their growth in overseas lending and securities investment to focus more on risk and returns
    • Domestically the banks have shed yen bonds as the BOJ has bought JGBs but holdings by the major banks have picked up recently and all the banks have increased holdings of investment trusts in pursuit of higher returns  
    • As domestic loan growth has exceeded GDP growth, Japan's credit/GDP ratio has been rising, but this comes after a declining trend that has lasted more than 20 years. Before its bubble burst, Japan's ratio peaked at something close to the level that China's corporate debt/GDP is now reaching
    • The BOJ sees Japan's banking system as basically stable, but facing profitability challenges from a shrinking customer base, low lending rates, inefficiency and limited income diversification.
  • Amending the Bank Secrecy Laws

    Source:
    Date Submitted: 16 Oct 2017
    Views: 33
    Downloads: 1
    The increasing pressure put upon by the Financial Action Task Force to fight money laundering has led to the increasing trend toward greater financial transparency. This is among the reasons why at present there are only three jurisdictions --- the Philippines, Lebanon, and Switzerland, wherein bank secrecy laws can be said to be too restrictive in the sense that these provide for secrecy as far as tax evasion cases are concerned1 . In the case of the Philippines, this is made worse as foreign currency (FCDU) deposits still have absolute confidentiality. 
  • White Knights or Machiavellians? Understanding the motivation for reverse takeovers in Singapore and Thailand.

    Source: Pantisa Pavabutr
    Date Submitted: 16 Oct 2017
    Views: 1042
    Downloads: 13
    We analyze the characteristics, return, and financial performance of 47 RTO sample firms in Singapore and Thailand between 2007-2015.  Given the existing regulatory screens imposed by Singapore and Thai exchanges, we cannot find evidence that firms choosing to list via RTOs signals a separating equilibrium of low type firms seeking a listing short-cut.  We argue that RTOs should not be evaluated as a choice of listing per se, but as part of the parcel of long-term corporate strategy.  Analysis in this paper yields important in sights on reverse takeovers from both investor and regulator perspectives.
  • Strengthening Business Ethics to Boost SMEs

    Source:
    Date Submitted: 16 Oct 2017
    Views: 775
    Downloads: 4
    SMEs fuel the growth of the Philippine economy. However, despite their wide-spread presence across all industries, the segment’s growth has been hindered by unethical practices which cause barriers to finance, trade, internationalization and harmonized relationship with all stakeholders. This paper aims to explore the specifics of these business impediments, and introduce the existing initiatives by the government, highlighting the promotion of good ethical standards to boost the growth of SMEs’ business operations. 
  • Lifting Suspension of Usury Laws in the Philippines

    Source:
    Date Submitted: 15 Oct 2017
    Views: 44
    Downloads: 3
    This paper is about the possibility of lifting Centranl Bank Circular 905, series of 1982 which suspended the application of Usury Laws in the Philippines.
  • Inclusive Business in the Philippines

    Source:
    Date Submitted: 15 Oct 2017
    Views: 225
    Downloads: 6

    This paper tackles the role inclusive businesses play in our economic growth. We shall also be tackling specific companies and their programs geared towards inclusive business and poverty alleviation. Lastly, we shall seek means on promoting this business model so that more would participate in this initiative. 

  • FinTech in the Modern Philippines: A Financial Regulation Adequacy Analysis

    Source: Abigael Espejo
    Date Submitted: 13 Oct 2017
    Views: 158
    Downloads: 12
    The global trend of the financial markets towards the use of FinTech has already caught up in the Philippines. The activities of FinTech start-ups in the nation’s emerging market have already reached a significant transaction volume that raises different types of risks. Cyber threat and data privacy issues are the major concerns in this internet-reliant industry, especially since the government has experienced major cyber-threats within the past year. These issues, among others, demand a regulatory framework from the government financial arms for risk mitigation and at the same time, promotion of the FinTech trade. The Bangko Sentral ng Pilipinas has issued two circulars in relation to FinTech early this year as a respond to this demand. Additionally, laws such as the E-commerce Act, Data Privacy Act and Cybercrime Protection Act have pushed the country towards accepting the modernization brought about by technology in regulatory terms. This policy paper also presents a comparison between the domestic regulations against the FinTech policies of other countries, and identifies the regulatory lapses in the Philippine’s current framework.
  • Morningstar Global Fund Investor Experience Study 2017

    Source: Anthony Serhan, CFA
    Date Submitted: 11 Oct 2017
    Views: 3445
    Downloads: 23
    First published in 2009, the Morningstar Global Fund Investor Experience study has promoted a
    dialogue about global best practices for mutual funds from the perspective of fund investors. This
    biennial report measures the experiences of mutual fund investors in 25 countries across North
    America, Europe, Asia, and Africa. Morningstar researchers evaluated countries in four categories—
    Regulation and Taxation, Disclosure, Fees and Expenses, and Sales. The grading scale was changed
    in the 2017 study to better express where a country sits relative to global peers.
  • Ethical considerations in the policy development and implementation of the Philippine National Identification System

    Source: Jan Michael Saniel
    Date Submitted: 10 Oct 2017
    Views: 2872
    Downloads: 5
    Ethical considerations in the policy development and implementation of the Philippine National Identification System
  • Rulings on Philippines Online Gambling Industry

    Source: Ru Li
    Date Submitted: 09 Oct 2017
    Views: 170
    Downloads: 1
    This paper focuses on discussing the regulation gaps between the Philippines and China in the online gaming industry, the hazards of allowing a robust growth of this sector, and the challenges for the local regulators in ruling the market practices, with consideration on ethical manners which need to be held in doing business for the sake of pursuing a common good for the whole society rather than purely aiming at a higher economic growth for the country.    
     
  • Estimating Tenure Choice and Housing Demand in the Philippines

    Source: Nicole Danika Bondad, Queennie Mindanao
    Date Submitted: 07 Oct 2017
    Views: 196
    Downloads: 2
    The study estimates housing demand and the probability of homeownership in the Philippines. Through an empirical analysis of household-level data in 2009, the research examines the price and income elasticities of both homeowners and renter-households in the country. Addressing the difficulty of measuring housing prices accurately, the researchers apply a two-equation model comprised of tenure choice and housing demand functions with price, income, and family size as the main explanatory variables.
     
    Further, the paper evaluates the effectiveness of housing subsidy programs in the Philippines.
  • Central Bank Balance Sheet Policies and Spillovers to Emerging Markets 

    Source: HAOBIN WANG, MANMOHAN SINGH
    Date Submitted: 29 Sep 2017
    Views: 743
    Downloads: 18

    We develop a theoretical model that shows that in the near future, the monetary policies of some key central banks in advanced economies (AEs) will have two dimensionschanges in short-term policy rates and balance sheet adjustments. This will affect emerging market economies (EMs), especially those with a pegged exchange rate, as these EMs primarily use a single monetary policy tool, i.e., the short-term policy rate. We show that changes in policy rates and balance sheet adjustments in AEs may differ in their respective financial spillovers to pegged EMs. Thus, it will be difficult for EMs to mitigate different types of spillovers with a single monetary policy tool. In that context, we use the model to show how EMs might use additional toolscapital controls and/or macro-prudential policyto complement their monetary policy and financial stability toolkit. We also discuss how balance sheet adjustments that affect long-term interest rates may percolate to influence short-term interest rates via financial plumbing. 

  • Family Affair? - Insider Trading and Family Firms: Evidence from Thailand  

    Source: Rapeepat Ingkasit, Professor Arnat Leemakdej, DBA
    Date Submitted: 18 Sep 2017
    Views: 990
    Downloads: 30
    Thai insiders can earn significant abnormal returns from trading shares of their firms. The effect is more pronounced when trades occurred prior to earnings announcement. The results provide reasoning for regulation that prohibits the insiders to trade prior to earnings announcement. Both family ownership and control structure affects the magnitude of market reaction. The findings support the entrenchment effect in family firms. The presence of specific categories of blockholder has monitoring effect while some types of blockholder seem to enhance insiders’ signal and strengthen the market reaction. Significant reduction in abnormal returns earned by insiders in the firm with voluntary blackout policy suggest that the policy effectively forbid the insiders to trade when they possess valuable information that is not available to the public.
  • Practitioner’s Brief: Investor Trading During China Split-Share Reform

    Source: Jingyu Cui
    Date Submitted: 15 Sep 2017
    Views: 873
    Downloads: 0
    This In practice piece gives a practitioner’s perspective on the article “Institutional Investors and Equity Prices: Information, Behavioral Bias and Arbitrage” by Bing Han and Dongmin Kong, working paper. Available at SSRN: https://ssrn.com/abstract=2926401.


    What’s the Investment Issue?
    Since the 1980s, Chinese government has started to restructure state-owned enterprises. Upon the initial public offering, the parent firm receives legal person (LP) shares in return for the assets it inserted. LP shares make up about one-third of the total capital stock of the listing firm. Another one-third are state shares held by local governments and central government. These two third of shares are called non-tradable shares since they are restricted from selling to individual investors and trading on stock exchanges. The remaining one-third is publicly issued and traded by individuals and institutions. Owing to the split–share structure, various levels of government entities controlled the listed companies and had power over the appointment of key managers, making the managers of the listed companies responsible not for the public investors but for the bureaucratic power, putting public investors in an inferior position and leading to greater price inefficiency and volatility.
     
    Owing to the drawback of the split-share structure, Chinese government was committed to a reform. The plan was to align the interest of various types of shareholders including non-tradable shareholders and tradable shareholders. The main reform structure was carried out in 2005. It invites non-tradable and tradable shareholders to negotiate the conditions under which non-tradable shares (NTS) can be converted into tradable shares (TS). The reform process would cause more shares (the past NTS) to float in market and make individuals’ shares be diluted. To compensate individual investors’ loss, corporation founders provide certain amount of compensation to public investors in return for the right to trade their NTS in the secondary market. After the negotiation two parties agree to a compensation ratio and then NTS would be allowed to trade publicly. Taking advantage of this unique natural experiment, the authors try to answer these four questions:
    Do institutions have private information and trade on it?
    Does institutions’ trading move stock price?
    Do institutions act as arbitrageurs and exploit stock mispricing?
    Do institutions make abnormal profit from trading?
     
    How Does the Author Tackle This Issue?
    Sample period from January 1, 2005 to December 31, 2008 was chosen to encompass the split–share reform (from mid-2005 to 2007). Final sample includes 1,215 firms listed in Chinese stock markets (SSE) and Shenzhen Stock Exchange (SZSE). Several key dates are presents as following: T0: The company first announces the reform. T1: Shares of the reform companies resume trading. T2: Shareholder registration date. T3: Trading resumes after the reform plan is approved. Then the authors study investors in four types: individual investors, active domestic institutions, passive domestic institutions and qualified foreign institutional investors (QFIIs). They analyze the trading behavior of these investor types in different windows.
     
    What Are the Findings?
    The empirical evidence shows that passive institutions possess and then trade based on private information about company-specific compensation ratio. The timing of the reform and company-specific compensation ratio are vital during the process of the reform and are private since these information are not open to public. Compensation ratio determines the wealth transfer from NTS to TS holders.
     
    Their evidence shows that passive institutions buy an abnormal amounts of tradable shares that end up with high compensation ratio prior to the announcement date and sell abnormal amounts of tradable shares that end up with low compensation ratio. However, passive institutions do not make abnormal profits because they are subject to disposition effect: they tend to sell their winners too soon after trading resumes (T1) – the company announces the split–share structure reform, leaving large future gains ungarnered. The average cumulative abnormal return (CAR) of passive institutions from the ten trading days prior to T0 is 2.22%, while the CAR on T1 is −2.53%. Thus, the informed passive institutions do not make abnormal profit through their information advantage. Individual investors also exhibit disposition effect; they sell an abnormally large amount of stocks with high unrealized gains after the reform is announced (T1). The disposition effect exhibited by passive institutions and individual investors leads to underpricing in stocks with high compensation ratios.
     
    However, QFIIs and active institutions who have no information advantage turn out to be significantly buyers of the most underpriced stocks. The stocks intensely bought by active institutions and QFIIs outperform the stocks intensely sold by them by approximately 3.5% and 0.05% over the period [T0 − 10, T0-1 ]. The CAR of the reform companies from T1 to T3 is positive and significant (5.33%), although CAR on T1 is significantly negative (−2.53%). This result means that if the price on T1 is affected by the disposition effect of individual investors and passive institutions, some types of investors can take advantage of the mispricing by buying on T1. Those results show that qualified foreign institutions and active institutions make abnormal returns by arbitraging this mispricing and helping improve market efficiency.
     
    What Are the Implications for Investors and Investment Professionals?
    This paper provides new insights into the role of institutional investors in asset pricing through
    a unique split–share structure natural experiment and the rich dataset with all daily trades of various types of investors. Some institutional investors make abnormal returns, despite of information disadvantage, by arbitraging mispricing created by investors who have information advantage. Thus, investors who have private information may not able to make abnormal return and even suffer a loss if they do not trade in the right way, such as subject to disposition effect. Thus, both institutional and individual investors may be subject to cognitive errors, such as disposition effect, which leads to asset price predictability.
     
     *Danling Jiang is the Associate Professor of Finance at SUNY at Stony Brook and the Chang Jiang Scholar Visiting Professor at Southwest Jiaotong University. Jingyu Cui is a Master of Science in Finance student at SUNY at Stony Brook.
     
  • Stable Asset Building by Japanese Household and Customer-Oriented Business Conduct (Fiduciary Duty)

    Source: Junichi Nakajima
    Date Submitted: 03 Sep 2017
    Views: 1266
    Downloads: 23
    This is an English translation of Speech made at CFA Japan Special Symposium: Fiduciary Duty Reform “Future of Finance” Initiative. 
    Provided by: 
    Mr. Junichi Nakajima, Deputy Director General The Planning and Coordination Bureau Financial Services Agency (“FSA”).

    Financial Services Agency (the FSA) in Japan is now making an all-out effort throughout our agency to achieve a stable environment for asset building by Japanese households. At the end of March of
    2017, the FSA made public the principles concerning the Customer-Oriented Business Conduct
    (fiduciary duty), together with measures for stable asset building. He Explains the specific measures taken by the FSA.
  • Mergers and acquisitions: how do you view their underlying substance?

    Source: Hong Kong Institute of Certified Public Accountants
    Date Submitted: 30 Aug 2017
    Views: 2852
    Downloads: 77
    Are you a shareholder or analyst with an interest in mergers and acquisitions? 
    The accounting standard-setters need your expertise. 

    We are aware that M&As are common and can take the form of group restructurings or third party acquisitions. There is usually no question that there is underlying substance to acquisitions with third parties - the transaction price typically represents the fair market value of the acquired business. But M&As within a group might arguably be different.

    The findings of this M&A survey will be published and will help us consider whether all M&As should be accounted and reported in the same way. 

    To participate, click on this link: http://survey.hkicpa.org.hk/index.php?sid=57118&lang=en, or download and email us the attached survey: outreachhk@hkicpa.org.hk
  • Asian Link

    Source: Dr Raymond Madden, FRSA, Neil Smith
    Date Submitted: 20 Aug 2017
    Views: 563
    Downloads: 0
    "Ethical issues in the financial services industry affect everyone, as almost all of society are consumers of its products and services.  Given the vital role that financial institutions play, moral hazards may be more acute and it is therefore unsurprising that the industry should be subject to the highest ethical standards.  Ethical dimensions create an environment based on trust and make economic transactions more predictable for producers and consumers".
  • Who can get money? Evidence from the Chinese peer-to-peer lending platform

    Source: Qizhi Tao, Ziming Lin, Yizhe Dong
    Date Submitted: 17 Aug 2017
    Views: 103
    Downloads: 8
    This paper explores how borrowers’ financial and personal information, loan characteristics and lending models affect peer-to-peer (P2P) loan funding outcomes. Using a large sample of listings from one of the largest Chinese online P2P lending platforms, we find that those borrowers earning a higher income or who own a car are more likely to receive a loan, pay lower interest rates, and are less likely to default. The credit grade assigned by the lending platform may not represent the creditworthiness of potential borrowers. We also find that the unique offline process in the Chinese P2P online lending platform exerts significant influence on the lending decision. We discuss the implications of our results for the design of big data-based lending markets.
  • HKSFA's Comment on HKEX's Concept Paper on Weighted Voting Rights

    Source: HKSFA
    Date Submitted: 16 Aug 2017
    Views: 526
    Downloads: 12
    HKSFA express its views on whether, in concept, governance structures that give certain persons voting power or other related rights disproportionate to their shareholding (weighted voting right structures or “WVR structures”) should be permissible for companies currently listed or seeking to list on the Exchange.
  • Australia's Venture Capital Limited Partnership program: Has it met its objectives?

    Source: Winnie Wong
    Date Submitted: 26 Jul 2017
    Views: 240
    Downloads: 14
    The aim of the paper is to critically analyse the Venture Capital Limited Partnership program in Australia, and make suggestions as to how the program could be reformed to better meet its aims and objectives.
  • Are the New Auditor's Report Insightful?

    Source: Hong Kong Institute of Certified Public Accountants, Standard Setting Department
    Date Submitted: 26 Jul 2017
    Views: 1696
    Downloads: 0
    The Standard Setting Department of the Hong Kong Institute of Certified Public Accountants is conducting a survey on the new auditor's report of listed entities. Feedback from users of financial statements is important for us to know whether the new requirement serves users' needs, and if not what could be improved. http://survey.hkicpa.org.hk/index.php?sid=55433&lang=en
     
    The survey is open until the end of August. For enquiries: outreachhk@hkicpa.org.hk>


    Background of the new auditor's report
    From financial year ends 15 December 2016 onwards, auditor's reports of listed entities are required to describe key audit matters (KAMs) to provide greater transparency about the audit that was performed. Communicating KAMs assists intended users of financial statements in understanding matters that were of most significance in the auditor's professional judgement; and understanding the entity and areas of significant management judgement.
  • RMBI Newsletter Issue 13 (Financial Crime Risk: Anti-Money Laundering and The Rise of Text Mining in Financial Markets)

    Source: Tsang Chiu Yu, Derek, Wong Ching Ip, Venice, Chiu Hok He, Angus, Li Chin Wa, Chin
    Date Submitted: 26 Jul 2017
    Views: 711
    Downloads: 0
    In the latest issue (Issue 13 – August 2017), it covers the stories of:
     
    Financial Crime Risk : Anti-Money Laundering Practices in Banking
    To understand anti-money laundering, we have to understand what money laundering is. Money Laundering is the process of converting illegal funds into seemingly legitimate assets with the purpose of concealing the ownership or original source of these funds. This makes it difficult for the authorities to trace the origins of the funds. To counter this, the banking sector has established a set of internal regulations and system known as anti-money laundering. These are legal controls taken by financial institutions to investigate suspicious transactions to help prevent money laundering activities within the banking sector.
     
    The Rise of Text Mining in Financial Markets
    The world is awash in data. Financial markets are awash in data. We are generating around 2.5 quintillion (2.5×1018) bytes of information every day, and there is an average of 4,000 brokerage reports a day comprising around 36,000 pages in 53 languages. As market participants try to maximize their competitive edge from the growing mountain of information, the nancial world increasingly feels there is a need to harness the power of big data and it has been shaping the way they acquire, analyze and utilize data. The recent development is the rapid expansion of text mining. Hence, this article will focus on the development of Text Mining technology as well as Text Mining technique.
  • Corporate Governance for Asian Publicly Listed Family-Controlled Firms - Executive Summary

    Source: Tony Tan, DBA, CFA, Fianna Jurdant
    Date Submitted: 18 Jul 2017
    Views: 3659
    Downloads: 0
    EXECUTIVE SUMMARY
    Good corporate governance is increasingly considered one of the prime drivers of business success. Through transparency, equitable treatment of all shareholders, and a robust system of sound practices and procedures, good corporate governance can enhance performance and growth, both in the individual firm and at the national level.

    A solid corporate governance framework is particularly important for family firms, which face unique challenges as they balance the advantages and disadvantages of family involvement in the business.

    Based on an analysis of 56 family-controlled listed companies in 14 jurisdictions,* the CFA Institute report, Corporate Governance for Asian Publicly Listed Family-Controlled Firms, identifies opportunities to enhance corporate governance structures for family firms in the region. The report reveals how effective corporate governance can help these companies—and the regions in which they operate—continue to achieve economic success.

    FAMILY FIRMS AS THE DRIVERS OF ASIA’S FUTURE GROWTH
    Over the last few decades, Asian family firms have played a pivotal role in fueling the region’s economic growth, and their influence will continue to rise. By 2025, the number of firms in Asia with revenue exceeding USD1 billion is expected to be nearly equivalent to that in developed economies globally. Family firms will represent 75% to 80% of those entities.
    However, the growth of Asian economies in recent decades has been largely propelled by low labor and production costs. As the performance of Asian economies begins to mirror that of developed economies, their future capacity for growth will not be sustainable if they are competing on cost alone. To remain competitive, Asian family firms must innovate, expand outside of traditional markets, and professionalize, which will necessitate the tapping of global talent and capital. This will put pressure on these firms to have a corporate governance structure in place that can meet international standards and investor expectations.

    CHALLENGES FOR ASIA’S FAMILY FIRMS
    Challenges of Internationalization
    Between 2000 and 2010, the total market capitalization of Asian family firms grew significantly. A major driving force behind this was an entrepreneurial desire among Asian family firms to use capital market funding to expand in new markets, with the number of listed family firms increasing 62%. As more family firms use capital markets to fund their internationalization plans, they will face the challenge of developing sound corporate governance frameworks that meet the needs of the heightened regulatory environment and the scrutiny that comes with being listed.

    Challenges of Professionalization
    Although Asian family firms prefer to pursue family-management succession plans, many recognize the need to capitalize on external talent to meet future business pressures. Efforts to professionalize a family firm, however, may be double-edged.

    On the one hand, professionalization might boost a firm’s effectiveness. On the other hand, professionalization might give rise to additional agency costs, such as the need to offer incentives to align the interests of professional management with those of family members. If a family firm is to realize the benefits of bringing in external talent, then that incoming management will need the freedom to do the job for which they were hired. Defining an optimal equilibrium between family culture and external professionalism is therefore imperative to facilitate future value creation without incurring greater expenses.

    Challenges of Dispersed Ownership
    The average percentage of family ownership of large-size family firms in Asia is substantially lower than that seen in their European and North American counterparts. This implies increased ownership diversity, which can result in two major issues. First, with a widely dispersed minority ownership structure, the entity is potentially exposed to greater majority/minority owner conflicts. Second, Asian family owners who wish to expand their businesses while still retaining control may rely more on creditors than on further equity dilution. This could potentially lead to greater shareholder/creditor conflicts. Family firms should develop corporate governance policies to address these concerns.

    WHERE CORPORATE GOVERNANCE CAN PLAY ITS PART
    Research is inconclusive on whether the family-firm construct enhances or diminishes corporate governance practices. In theory, the long-term horizon and closer alignment of principal-agency interest in family firms should improve corporate governance. However, those same features could prove problematic by increasing risk, whether as a result of a lack of transparency, entrenchment, or wealth expropriation from minority owners.

    A solid corporate governance framework is essential for family firms to effectively balance the advantages and disadvantages of family involvement in the business. Combining governance, management, and ownership in the hands of family can bring benefits, but this centralized decision-making structure inevitably brings risks. Sound corporate governance practices can help family firms include different perspectives on their boards, which can mitigate risks. Moreover, such practices can help family firms balance the interest of different stakeholders, a task essential to the long-term sustainability of these entities. As well, sound corporate governance practices can help family firms reduce their cost of capital and reduce capital waste, making them more attractive investment targets and more competitive entities.

    THE WAY FORWARD
    The complex challenges facing publicly listed family firms in Asia are influencing the underlying corporate governance frameworks of those firms. Through a holistic understanding of corporate governance features supporting firm performance and value across the region, these firms will be better able to address the difficulties they face and to thrive in the future. The development of policy recommendations that assist in enhancing the corporate governance practices of Asian publicly listed family firms will also increase protection for minority owners from wealth expropriation by the majority, controlling family owners.

    Learn more about how corporate governance can impact family firm value and success at www.cfapubs.org/toc/ccb/2017/2017/1.
     
  • Interest in ESG Investing Poised to Grow Further in Asia Pacific

    Source: Chan Fook Leong, CFA
    Date Submitted: 10 Jul 2017
    Views: 2347
    Downloads: 0
    • CFA Institute further extends ARX ESG Investing Series to Singapore to discuss motivations for ESG integration in the region.
    • Panelists from S&P Dow Jones Indices, City Developments Ltd., ADL Infra Capital Myanmar, and ESGuru spoke to a full house of CFA Institute members and local practitioners on developments in green finance.
    • Participants concluded that despite challenges, green finance would continue to attract investor interest; supply of green instruments needs to catch-up.
    • Social and governance considerations still in their infancy in the region.
    • The question of alpha potential inconclusive.
    Dr. Tony Tan, CFA, head, global society advocacy engagement at CFA Institute kicked off the May 11, 2017 lunch-time talk entitled ‘Is green finance a fad? Or does it possess alpha potential?’ The event, organized by CFA Institute and CFA Society Singapore follows the first of the ARX ESG Investing Series, hosted in Hong Kong. This series has been developed in response to demand for ESG-related research on research platform, Asia-Pacific Research Exchange (www.arx.cfa).
     
  • MSCI Corporate Governance Country Report - India

    Source: Alan Brett, Head of Corporate Governanace Ratings, MSCI
    Date Submitted: 04 Jul 2017
    Views: 2747
    Downloads: 35

    MSCI ESG Research's latest Corporate Governance Country Report focuses on Corporate Governance in India. Our research finds concentrated ownership, related party transactions & succession planning represent key governance risks in India.

    MSCI ESG Research products and services are provided by MSCI ESG Research LLC, and are designed to provide in-depth research, ratings and analysis of environmental, social and governance-related business practices to companies worldwide. ESG ratings, data and analysis from MSCI ESG Research LLC are also used in the construction of the MSCI ESG Indexes. MSCI ESG Research LLC is a Registered Investment Adviser under the Investment Advisers Act of 1940 and a subsidiary of MSCI Inc. 

  • Joint Feasibility Study on China-Georgia Free Trade Agreement

    Source: PMC Research Center, University of International Business and Economics (UIBE)
    Date Submitted: 27 Jun 2017
    Views: 530
    Downloads: 5
    China and Georgia are friendly countries. In 1991, China recognized the independence of Georgia -- among the first countries to recognize the independence of Georgia and established diplomatic relations. In 1992, China established diplomatic relations with Georgia. After twenty years of close interactions of leaders and people, fruitful cooperation in various fields is achieved.

    In 1993, relevant government departments of China and Georgia signed several agreements, such as economic and trade agreement, agreement on encouragement and mutual protection of investments, scientific and technical cooperation agreement, agreement on cultural cooperation, health and medical science cooperation agreement, cooperation agreements in agriculture and food industry, tourism cooperation agreements, customs mutual assistance agreement, inter-bank cooperation agreement, and the development of railway transport cooperation agreement and maritime cooperation agreements. In 1994, the two countries signed the "mutual exemption of visas for official travel and group travel visa-free mutual agreement", "China agreement to provide 30 million yuan commodity loans to Georgia." In 1999, the two countries agreeed in Tbilisi Georgia to establish a Commission on Economic and Trade Cooperation, and held the first meeting. China is always a friend of Georgia. In September 2013, during a visit to Kazakhstan, President Xi Jinping proposed the "Silk Road economic belt" strategic vision, enthusiasticly responded by many countries including Georgia. On March 9, 2015, the Chinese Ministry of Commerce and the Ministry of Sustainable Development of Georgia agreed to establish a joint working group on trade to study feasibility of China-Georgia Free Trade Agreement. The two sides also signed a memorandum on strengthening "Silk Road economic belt" to jointly promote economic and trade cooperation, and to enhance trade, investment, economic and technical cooperation and infrastructure interconnection level. To start a free trade agreement feasibility study for the two sides, serves as an important initiative to strengthen "Silk Road economic belt", which will reinvigorate bilateral economic and trade relations for the two countries.

    Georgia and China intend to intensify the trade and economic relations through creating free trade agreement. The goal of the report is to evaluate the potential, ex-ante effects of free trade agreement on existing trade flows and identify the specific areas of interest for further cooperation. The Research component of the report include the methodology and discuss some effects of differences in methodologies used by Georgian and Chinese experts, data description, detailed results of simulations and sensitivity analysis of parameters and discuss the specific sectors for potential augmentation of cooperation.

    This report seeks to analyze the potential benefits and challedges of a potential China-Georgia free trade agreement. It involves the study of foreign economic situation between the two countries, in particular, through analyzing foreign economic policies and bilateral economic and trade relations, investigating issues related to trade in goods, trade in services and investments. Based on that, solid scientific suggestions will be given to guide the potential free trade agreement negotiations.

    The objectives of the study are:
    - To provide background information to commence negotiations on CGFTA.
    - Identify specific products sectors for expansion and diversification of trade between the parties.
    - Identify the benefits and challenges that may derive from the proposed FTA.
    - To make conclusions and recommendations on options for future action including scope, framework and architecture and FTA for furthering bilateral trade investment and economic cooperation to expand and enhance the benefits in these areas.
  • 2016: A Quantum Leap for Indian Corporate Bond Market

    Source: Shagun Thukral, CFA
    Date Submitted: 20 Jun 2017
    Views: 3312
    Downloads: 52
    This paper was published in the Research Bulletin, The Institute of Cost Accountants of India, Vol. 43, No.I, April 2017 issue.  The paper seeks to establish 2016 as a turning point in the development of the corporate bond market in India while identifying the factors, using the RBI's 7i Framework, that have contributed to this push and where there remains room for further improvement.
  • Leviathan Inc. and Corporate Environmental Engagement (Video Presentation)

    Source: Tom Berry
    Date Submitted: 25 Jul 2018
    Views: 5421
    Downloads: 0
    State-owned enterprises (SOEs) have been criticized for poor governance and questionable efficiency. In a recent paper titled ‘Leviathan Inc. and Corporate Environmental Engagement,’ Dr. Pedro Matos from the Darden School of Business, University of Virginia, and his colleagues from the University of Hong Kong and Singapore Management University conducted an international study of the impact of state ownership on a firm’s engagement in environmental, social, and governance (ESG) issues. 

    There has been significant debate on the effects of ESG issues on shareholder value. In this paper, it was found that SOEs are, in fact, more engaged in environmental issues and, more importantly, this engagement does not come at the expense of shareholder value. Furthermore, SOEs are also more engaged in social issues, but they do not reveal better corporate governance performance.


    This is a recording of the presentation hosted by CFA Institute, HKSFA, ACCA, FSDC, HKIRA, and HKU SPACE Executive Academy on June 6, 2017 at HKU SPACE Po Leung Kuk Stanley Ho Community College in Hong Kong.
     
  • Fintech - Transforming Finance

    Source: Jimmy Greer
    Date Submitted: 20 Jun 2017
    Views: 763
    Downloads: 0

    Financial Technology (FinTech) is here – sweeping through finance and, if some are to be believed, threatening traditional edifices that have stood for centuries.

    This great surge is being fronted by a host of new start-ups taking their lead from the big tech innovators. Their maverick approach is helping to push the FinTech industry into new territory across the financial services landscape, raising billions of dollars and worrying the incumbents.

    So what are the main trends and driving forces shaping FinTech today? Fintech – transforming finance explores the features of this new landscape, highlighting the many ways in which this revolution is taking place.

    For professional accountants, this new terrain will provide many opportunities as it permeates deeper and deeper into the fabric of society. From the promise of blockchain, to the demands of valuation in a digital era, finance more than ever needs an experienced, knowledgeable guide to make the most of the opportunities ahead.

  • Two insightful reports on Fintech and Distributed Ledger Technology (DLT) by Financial Services Development Council (FSDC)

    Source: Financial Services Development Council (FSDC)
    Date Submitted: 13 Jun 2017
    Views: 1807
    Downloads: 0
    Given most of the FinTech innovations, in particular the DLT, are developed for providing services directly to consumers, FinTech has initially been regarded as disruptive to the established financial institutions. However, a more recent development is that increasingly FinTech innovations are developed by, and in collaboration with, the well established incumbents in the financial sector. There are two very insightful reports on FinTech and DLT published by the FSDC in May 2017; which covers extensively the following areas including cybersecurity, payment and securities settlement, digital ID and KYC utility, WealthTech and InsurTech (including data analytics, automation and artificial intelligence), RegTech as well as Distributed Ledger Technology.  

    Attached are the two links to these two reports by FSDC.  

    http://www.fsdc.org.hk/sites/default/files/FSDC%20Paper_FinTech_E.pdf

    http://www.fsdc.org.hk/sites/default/files/FSDC%20Paper_DLT_E.pdf
     
  • Indonesian Capital Market Development and Challenges

    Source: Kahlil Rowter
    Date Submitted: 04 Jun 2017
    Views: 281
    Downloads: 15
    This article elucidates development in the Indonesian capital market until recently. Included are developments in the equity and bond markets, why they are still at a nascent stage in comparison with other South East Asian countries.
  • 洪灝:新监管下的风险重新定价

    Source: Hao Hong, CFA
    Date Submitted: 01 Jun 2017
    Views: 449
    Downloads: 4
    This research appears on WenXin's blog "洪灝的中国市场策略" on 24 May 2017.
  • Re-pricing Risks under New Regulations

    Source: Hao Hong, CFA
    Date Submitted: 01 Jun 2017
    Views: 169
    Downloads: 9
    This research appears on WenXin's blog "Hong Hao China Strategy" on 24 May 2017.
     
  • Oil Price Shocks on the Industry Level Production Using Vector Auto Regression: Empirical Evidence from Pakistan

    Source: Farhan Ahmed, Osama Daudpota, Muhammad Kashif
    Date Submitted: 31 May 2017
    Views: 357
    Downloads: 5
    Industrial production is one of the leading indicators of gross domestic product and economic growth of the country which reflects the overall economic performance of a country. In other words decreases or increases in industrial production point out a contracting or expanding economy. Therefore, changes in prices of oil are the crucial inputs to the overall industrial production. This study examines the effects of oil prices shocks on the industrial production in Pakistan during the period July 2000-June 2015 by using VAR model. This research has shown that oil price shocks had a negative impact on industrial production in Pakistan to some extent. It is recommended to forecast oil prices for future that can help take precautionary steps to be flexible enough to control the impact on industrial production level. 
  • Beauties of the Emperor: Investigation of an Opaque Stock Market Bailout   

    Source: Yeguang Chi, Xiaoming Li
    Date Submitted: 26 May 2017
    Views: 609
    Downloads: 9

    During the 2015 stock market crash, the Chinese government conducted an opaque bailout by injecting over ¥1.25 trillion ($200 billion) into the stock market. Sixty-three out of 1,406 government-purchased companies actively announced their bailout status in August 2015. The other government-purchased companies passively disclosed their bailout status through earnings reports in October 2015. We find a significantly positive market response to the first wave of active announcements of government bailout. Following the second wave of passive disclosure, the positive response deteriorated and eventually disappeared. Finally, retail investors reacted slowly and eventually overreacted to the bailout news, whereas institutional investors reacted promptly to profit from the opportunity. 

  • Practitioner's Brief (video): ​The Power of Private Information

    Source: Research Gate
    Date Submitted: 25 May 2017
    Views: 1400
    Downloads: 0
    Despite a recent crackdown on insider trading in China an assumption persists regarding the relative information inefficiency and asymmetry of less developed markets. Researcher Chi asks: How much is private information exploited in a less developed financial market like China?
    As it turns out, quite a lot.
  • Risk management–control system interplay: case studies of two banks

    Source: Alexander Rad
    Date Submitted: 11 May 2017
    Views: 347
    Downloads: 0
    This paper aims to explore the interplay between risk management and control systems in banks, specifically investigating the managerial intentions underlying the design of management control systems. This study is based on 31 interviews with personnel of two banks in a European country. The main finding is that belief systems drive the interplay between risk management and control systems in the studied banks. In several instances, belief systems and boundary systems were operating complementarily. Cross-case analyses of the two banks demonstrate that risk management (i.e. the Basel II Accord) replaced established operating procedures for loan origination and portfolio monitoring at the first bank, whereas senior managers suppressed Basel II to maintain established loan origination and portfolio monitoring procedures at the second one.
    This is one of very few studies investigating the interplay between risk management and control systems in banks.
  • Valuation Insights - India Edition, May 2017

    Source: Varun Gupta
    Date Submitted: 09 May 2017
    Views: 2398
    Downloads: 0

    Valuation Insights is a quarterly e-newsletter that provides you with the latest news from Duff & Phelps and the trends and changes in valuation and accounting that could affect your business transactions in Asia.

    In this edition, our top stories cover the Financial Accounting Standards Board issuing an Accounting Standards Update, robust fair value measurement, the International Valuation Standards Council releasing the 2017 edition of its International Valuation Standards, and a recent Duff & Phelps study about fairness opinions.

    We will also look at important Duff & Phelps reports and articles, including a recorded forum presentation by Professor Damodaran and the Duff & Phelps Global Regulatory Outlook 2017.

  • China In Transition - What Next In Financial Regulation

    Source: Anthony Neoh, SC
    Date Submitted: 10 Apr 2017
    Views: 313
    Downloads: 13
    This is the presentation powerpoint presented by Anthony Neoh, SC on 20 August 2016
  • Practitioner’s Brief: Expect the Unexpected - Why Tightened Trading Rules Created a More Efficient Index Futures Market

    Source: Hai Lin, You Wang
    Date Submitted: 06 Apr 2017
    Views: 3625
    Downloads: 0
    WHAT’S THE INVESTMENT ISSUE?
    In the summer of 2015, Chinese regulators aggressively tightened fairly lax trading rules in the country’s stock index futures market in the midst of a chaotic crash. The move, an effort to tamp down rampant speculation and manipulation, was widely criticized as an overreach. With margin barriers thrown up higher and position sizes significantly capped for nonhedgers, speculators all but vanished (a desired outcome); however, so too did volume, which decreased nearly 100%—not exactly a best-case scenario. “China has killed the world’s biggest stock index futures market,” Bloomberg wrote in September 2015. Illiquidity in the market for futures tied to the China Security Index 300 “was causing problems,” the Financial Times said. In hindsight, it’s worth asking: Were these regulations, while apparently necessary, nevertheless ill-advised? No, assert the authors, who do not gloss over the fact that liquidity was severely impacted. What they do emphasize is a rather counterintuitive finding: A market in which liquidity has ground to a halt does have an upside.

    HOW DO THE AUTHORS TACKLE THIS ISSUE?
    Eugene Fama’s efficient market hypothesis (EMH) holds that stock prices immediately and inherently reflect all available information such that there’s no predictive power to be gleaned, i.e., it’s all randomness at play. EMH has been endlessly tested and re-tested since it first emerged in the 1970s at a time when low-cost passive management was coming on the scene as a disruptor to active management. Several testing methods were used to batter/gut-check EMH. Prominent among them was the variance ratio (VR) test, put to use, alongside other tests, by authors Lin and Wang. They set out to measure the efficiency levels of the Chinese stock index futures between July 2015 and September 2015. During this period, a slew of rule changes were implemented, making it harder to trade index futures, a prevalent means of speculating, hedging, arbitraging, and as it turned out, carrying out manipulative schemes, e.g., pump-and-dumps or coordinated bear attacks. The futures market plays a major role in price discovery in the broader spot Chinese stock market. Prior to the change, rules for stock index futures trading were indeed loose and transaction costs were low. Leverage was plentiful and dangerously easy to access. When all of these conditions were curbed via tighter rules, something interesting happened. Yes, volume collapsed. But what happened to the market’s efficiency?

    WHAT ARE THE FINDINGS?
    The results of VR tests (and Granger causality tests) were puzzling. Although the authors thought they would find that regulatory tightening had a detrimental impact on market efficiency and price discovery, just as it had on volume and liquidity, it did not prove to be the case. To the contrary, the VR testing found that absolute VR levels of Chinese index futures’ five-minute returns went from roughly 2.70 before the rule change to around 1.0 after—a decrease of more than 50%. In other words, markets became more efficient in the post-tightening study period. With volume and liquidity in such a freefall, why would that happen? It is possible, explained the authors, that in low liquidity environments trading mainly occurs among the most knowledgeable institutional investors. Speculators and manipulators fall away. So we’re talking about very light trading—but among very well-informed participants free from the distractive din of the less informed. This hypothesis requires testing. If additional data was available, it would be an interesting topic for further research, according to the authors.

    WHAT ARE THE IMPLICATIONS FOR INVESTORS AND INVESTMENT PROFESSIONALS? “Regulators can be helpful in a bad market state,” the authors said, noting that at the time the rules were imposed the stock futures market had been overrun by unchecked manipulators who were abetted by low barriers to leverage and the ability to upsize. The regulatory goal of squeezing nonhedgers out of the market was met. Authorities drastically reduced excessive manipulation—without unintentionally creating a less efficient market. Co-author Hai Lin explained in an email: “While extreme regulations do not happen often, that doesn’t mean that their potential can be ignored.” Regulations can tighten in stressful environments—or in other words, right when investors might be most inclined to employ hedging strategies. In developing risk management strategies, investors need to view regulatory conditions as a factor that can vary over time. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    Summarized by Rich Blake. Rich is a veteran financial journalist who has written for numerous media outlets, including Reuters, ABC News and Institutional Investor. The views expressed herein reflect those of the authors and do not represent the official views of CFA Institute or the authors’ employers.
  • Practitioner's Brief: Short-Sale Restrictions Imply Higher Returns

    Source: Danling Jiang, Xiao- Ming Li
    Date Submitted: 02 Apr 2017
    Views: 2317
    Downloads: 0
    WHAT’S THE INVESTMENT ISSUE?
    Short-sale restriction is an important form of limits to arbitrage. In markets with partial shortsale restrictions, some stocks can be sold short (shortable stocks) whereas others cannot (no-short stocks). The latter are more subject to mispricing because of greater limits to arbitrage. Mispricing can be a source of risk, because investors may lose money if mispricing persists in the near term while they are betting against mispricing. Accordingly, finance theories predict that stocks more subject to mispricing—in this case, the no-short stocks—should on average earn a return premium as compensation for mispricing risk. Despite extensive research on short-sale constraints, few studies have directly tested the no-short return premium. Investment practitioners in markets with partial short-sale restrictions may want to exploit the no-short return premium induced by such regulations. To do so, they would ask two questions: Do the real-world data support the claim that no-short stocks on average earn higher returns? If so, how can they determine investment strategies based on the no-short return premium? The authors thus set out to reveal the superior expected excess and abnormal returns on no-short stocks over those on shortable stocks, as well as to demonstrate the strong return predictive power of the loadings on various long–short portfolios constructed using shortable and noshort stocks.

    HOW DO THE AUTHORS TACKLE THIS ISSUE?
    The authors test their prediction about the no-short return premium using the Hong Kong stock market’s unique regulatory setting. In the Stock Exchange of Hong Kong (SEHK), stocks are periodically added to or deleted from the list of shortable stocks. This list is selected from the pool of stocks satisfying criteria based on market capitalization, liquidity, and so on. Stocks on the list are “shortable,” and stocks excluded from the list are “no-short”. The authors form a portfolio consisting only of no-short stocks (denoted as N) and a portfolio of only shortable stocks (denoted as S). They then create a long–short portfolio (denoted as NMS, for “no-short minus shortable”) as the return spread between N and S. They consider four different NMS portfolios, using the SEHK size and liquidity criteria to decide which stocks should be added to, can remain on, or should be removed from the official short-sale list. Further, the authors use Fama–MacBeth two-pass regressions to investigate how well the loadings of the test assets (portfolios and stocks) on each of the four NMS portfolios can predict the cross-section of future asset returns.

    WHAT ARE THE FINDINGS?
    The authors find that from 1997 through 2014, the NMS portfolio earns a monthly return of 2% to 3%, or an abnormal monthly return of about 1.3%, after accounting for its correlations with a set of standard common factors (market, size, value, liquidity, etc.). Thus, on average, no-short stocks indeed earn a return premium over shortable stocks. Moreover, the authors discover that no-short and shortable stocks tend to co-move negatively: When no-short stocks do better, shortable stocks tend to do worse. Mostly importantly, the factor loadings on the four NMS portfolios are strong positive predictors of future portfolio and stock returns in the cross-section. For example, the regression estimates imply that moving from the lowest 20% to the highest 20% NMS loading stocks increases the expected return next month by 1.5% to 2.0%. Moving from the lowest five shortable to the highest five no-short size and book-to-market portfolios increases the future average return by more than 4% per month. The loadings on the other three NMS portfolios, formed by considering the size and liquidity criteria for the official shorting list, exhibit similar or somewhat stronger forecast power.

    WHAT ARE THE IMPLICATIONS FOR INVESTORS AND INVESTMENT PROFESSIONALS?
    The findings will help to improve portfolio performance for institutional and individual investors who trade in securities markets with partial short-sale restrictions. Investors may consider gaining exposure to the NMS factor beyond their exposures to other standard factors. A refined strategy would require extracting stocks with the most extreme loadings on the NMS factor, as well as forming a portfolio that is long the highest NMS loading stocks and short the lowest NMS loading stocks. Furthermore, the refined trading strategy can be combined with strategies based on other style characteristics. Popular wisdom is that investors should pay more attention to the information revealed by short selling and take advantage of this information through observed short positions. The findings in this article direct investor attention to another side of the market, however: the stocks that cannot be sold short. These no-short stocks actually earn higher average returns because many investors may shy away from trading these more likely mispriced stocks. As a result, investors who are willing to invest in these stocks are paid to do so. For firms, however, regulation is bad news: Short-sale restrictions imply higher cost of equity. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    Summarized by Danling Jiang and Xiao-Ming Li. Danling Jiang is an associate professor of finance at SUNY at Stony Brook and the Chang Jiang Scholar Visiting Professor at Southwest Jiaotong University. Xiao-Ming Li is a professor of financial economics at the School of Economics and Finance (Albany), Massey University. The views expressed herein reflect those of the authors and do not represent the official views of CFA Institute or the authors’ employers.
  • Practitioner’s Brief: Behind Closed Doors - How Private In-House Meetings Move Public Markets

    Source: Robert Bowen, Shantanu Dutta, Songlian Tang, Pengcheng (Phil) Zhu
    Date Submitted: 02 Apr 2017
    Views: 1000
    Downloads: 0
    WHAT’S THE INVESTMENT ISSUE?
    In this brief, we provide an investor’s-eye view of a piece of research that shines a floodlight on an inherently opaque subject—private meetings between senior management and investors. Both camps are presumed to know better than to share or receive anything that could be considered material non public information (MNPI). Nonetheless, the authors of this study point to some dubious trends associated with these sit-downs. The question of whether a falling tree makes noise in a forest devoid of hearing-enabled life forms has long held its own as a rudimentary philosophical riddle. But as a practical matter for debate, it’s not much of one, i.e., we’re pretty sure that in all likelihood, a tree crashing to the ground does make a sound. Now ponder this: If a private meeting between senior management and a fund manager takes place—and no one else is there to hear what’s said—are there consequences in the stock market? In other words, what is the point of these cozy sit-downs? Do the parties stand to benefit? Such meetings, of course, are routine and perfectly legal, provided the executives at the publicly traded company steer clear of disclosing any MNPI. The authors set out to ascertain, among other information, to what extent corporate insiders—who control the timing and content of meetings—trade on those meetings. “Overall, our results suggest that companies disclose material non-public information during these meetings and some participants trade on the information,” the authors state.

    HOW DO THE AUTHORS TACKLE THIS ISSUE?
    The question of whether the meetings lead to some competitively advantageous information being leaked, maybe inadvertently, under the camouflage of crafty syntax, or even brazenly, might have remained one of mankind’s eternal mysteries had it not been for the Shenzhen Stock Exchange (SZSE). In 2009, the SZSE became the first exchange to require listed companies to report dates of private meetings with investors. Since August 2012, the SZSE has also required summary notes of what was said during those meetings, creating a dataset of some 17,000 meeting reports that the quartet of authors mined to startling effect. The authors found highly suspicious trading patterns among company insiders timing transactions ahead of and in the wake of private meetings. Although only 20% of private meetings can be connected with disclosed insider-trading activities, it is worth underscoring that the trades, some USD12 billion over a 28-month sample period (August 2012–December 2014), represent nearly two-thirds of the value of all insider trading among SZSE-listed companies during that time. Interestingly, nearly three-fourths of listed companies held at least one private meeting per year; the average was around five meetings per year. Most meetings were hosted in the companies’ headquarters.

    WHAT ARE THE FINDINGS?
    The research shows a clear trend of abnormally positive stock returns starting approximately 22 days prior to the private meeting dates. In fact, the average stock price run-up translates into RMB73.1 million (or about USD11 million) per average firm in the sample. Call it the “meeting anticipation effect” whereby investors/insiders trade on the not-irrational belief that in-house meetings generally reveal positive information. Some insiders appear to be selling into what they anticipate to be herd buying, using the increased volatility to mask their offloads.

    WHAT ARE THE IMPLICATIONS FOR INVESTORS AND INVESTMENT PROFESSIONALS?
    Many large institutional investors will undoubtedly scoff at the implication that they are gaming the system—or being gamed—by participating in face-to face conversations with the leaders of the companies in which they are investing large sums. These fund managers will also point to proprietary research processes that emphasize sophisticated models and, using the authors’ term, a “mosaic” of skillfully assembled information. Companies that hold meetings, likewise, could just as easily frame these interactions as transparent corporate citizenry, as evidenced by the high “information quality” scores enjoyed by the majority of the companies that report private meetings. The pieces are thus firmly in place for the facilitation of reinforced feedback loops: Companies that hold meetings have more analysts covering them, and these analysts represent large funds whose trades are closely watched. Insiders, who have seen this movie before, are not blind to the ripple effects of a few well-placed dollops of promising insinuations or even flat-out MNPI utterances. That there is an opportunity, thanks to the SZSE and the authors, for a sophisticated fund manager to write an algorithm scouring the mere record that meetings took place in an effort to catch some window of upside could be seen as one logical outcropping of the findings here, although we can think of another. Regulators in a developed market such as the United States might also find it useful to require some record of private meetings. Fund managers in the United States spend USD1.4 billion a year for face time with executives. The investment pays off well for those fund managers who are invited to these meetings and who make profitable trades around the meeting dates. According to the authors, the information gained from private in-house meetings provides these fund managers, and their investors, with an additional competitive edge. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    Summarized by Rich Blake. Rich is a veteran financial journalist who has written for numerous media outlets, including Reuters, ABC News and Institutional Investor. The views expressed herein reflect those of the authors and do not represent the official views of CFA Institute or the authors’ employers.
  • What Does Earnings Guidance Tell Us? – Listen When Management Announces Good News

    Source: Li Ma, CFA, Temi Oyeniyi, CFA, Simon Chen, Kevin Lu, ?Anil Kumar Thuta
    Date Submitted: 28 Mar 2017
    Views: 412
    Downloads: 7
    This is a Quantamental Research published by S&P Global Market Intelligence in January 2016.
  • ESG Indices are Bringing Environmental, Social and Governance Data to the Fore

    Source: Bloomberg L.P.
    Date Submitted: 23 Mar 2017
    Views: 473
    Downloads: 0
    This infographic powered by Bloomberg's proprietary Environmental, Social and Governance (ESG) data, looks into the rise of ESG indices and transparency in the region.
  • Australian Investors Push Reluctant Companies on ESG

    Source: Bloomberg L.P.
    Date Submitted: 23 Mar 2017
    Views: 3965
    Downloads: 0
    This article by Bloomberg Intelligence investigates the drivers pushing for improved ESG performance within Australian companies. Bloomberg Intelligence is Bloomberg's research arm providing in-depth analysis and data sets on industries, companies and credit, government, economic and litigation factors that impact decision-making.
  • Asia Set to Turn Tables on Lagging ESG Transparency

    Source: Bloomberg L.P.
    Date Submitted: 23 Mar 2017
    Views: 602
    Downloads: 0
    This article by Bloomberg Intelligence looks into the current state of ESG transparency in Asia. Bloomberg Intelligence is Bloomberg's research arm providing in-depth analysis and data sets on industries, companies and credit, government, economic and litigation factors that impact decision-making.
  • ESG Reporting on the Rise in Asia

    Source: Bloomberg L.P.
    Date Submitted: 23 Mar 2017
    Views: 2677
    Downloads: 0
    This infographic powered by Bloomberg's proprietary Environmental, Social and Governance (ESG) data, looks into the rise of ESG reporting in Asia.
  • Accounting for Natural Capital Costs Associated with Chinese Financial Institutions

    Source: Derek Hon Yan Ip, Lokesh Raikwar, Miriam Tarin, Lydia Harvey, Kaboo Leung
    Date Submitted: 21 Mar 2017
    Views: 365
    Downloads: 6
    This is a Banking Sector Case Study published in April 2016.
  • The No-Short Return Premium

    Source: Danling Jiang, Xiao-Ming Li
    Date Submitted: 05 Mar 2017
    Views: 274
    Downloads: 7
    This report is published on January 2017.
  • Regional Financial Regulation in Asia

    Source: Kawai, Masahiro, Morgan, Peter J.
    Date Submitted: 27 Feb 2017
    Views: 2524
    Downloads: 19
    Kawai, Masahiro; Morgan, Peter J. | February 2014
  • Overview of LIBOR-based Loans: Sovereign and Sovereign-Guaranteed Borrower

    Source: Asian Development Bank
    Date Submitted: 27 Feb 2017
    Views: 86
    Downloads: 1
    Asian Development Bank | June 2014
  • Financial Monitoring in the New Asean-5 Countries

    Source: Reyes, Noel G., Lim, Se Hee
    Date Submitted: 27 Feb 2017
    Views: 443
    Downloads: 6
    Lim, Se Hee; Reyes, Noel G. | May 2014
  • CSR Practice and Sustainable Business Performance: Evidence from the Global Financial Centre of China

    Source: Tai Min Wut, Artie Ng
    Date Submitted: 17 Feb 2017
    Views: 913
    Downloads: 7
    The Hong Kong Special Administrative Region of China (Hong Kong) has long been positioned not only as an international capital market but also as the global financial centre for China. To position themselves for overseas expansions, major enterprises in China are now listed with the Stock Exchange of Hong Kong and adopt internationally accepted corporate practices. In particular, there have been emphases by multinationals on Corporate Social Responsibility (CSR) practices for the potential benefits of enhanced business performance as demonstrated in prior studies. The aim of this paper is to explore the relationship between business performance and CSR practices among listed companies in Hong Kong. We have investigated and made comparisons between two groups of listed companies in Hong Kong -- those included in the Hang Seng Corporate Sustainability index and the other major ones in Hong Kong not included in the Index. It is found that there is a significant difference between the two groups in the sample. A direct association between adoption of CSR practice and sustainable business performance in financial aspects is observed over an extended period of time. However, we argue that there is not yet sufficient disclosure in relation to the quality of their overall CSR and sustainability performance.
  • Impact of elections on stock price graph: a case of US elections

    Source: Shreya Sethi, Shreya Sethi
    Date Submitted: 09 Feb 2017
    Views: 213
    Downloads: 5
    This paper focuses on the impact of US presidential elections on stock market. Thus, this paper aims to analyse the impact of the US presidential elections that have taken place from 1980 to 2010, on the stock market performance for eight different industries. The paper puts special emphasis on studying the abnormality of return related to stock prices and evaluating the uncertainty between the firm’s tax policy and stock market, around the time of upcoming presidential elections. This is a comparative study wherein the effects of pre- and post-election have been assessed. The empirical analysis undertaken relies on secondary data collected from various online sources. The results of the papers highlight; industry return data churn out ambiguous results when compared for winning election party. Also, the rate of reaction tends to differ grossly with respect to different industries. Democratic victory impacts the stock return negatively but in case of Republican victory the result is insignificant. A positive correlation exists between abnormal stock price and firms’ marginal tax rate around the day of the election. The paper proves there is a transitional effect of election, felt in the stock market irrespective of the anticipated outcome of the election.
  • Chinese Investment in the Carbon Risky Canadian Oil and Gas Industry

    Source: Jonathan Hammond
    Date Submitted: 09 Feb 2017
    Views: 1484
    Downloads: 10
    Chinese investor Tri-Win International Investment Group Inc. (Tri-Win) acquired Calgary, Canada based oil and gas producer Hyperion Exploration Corporation (Hyperion) on January 9th 2015 for CAD$31.9 million taking the previously listed Toronto Venture Exchange traded company private. In the developing climate sensitive landscape of Canada, increasing importance is being placed on combatting climate change and putting a price on carbon dioxide emissions. Due to the carbon intensive production of unconventional Canadian oil and gas products, current and future Chinese investors within this industry must adequately quantify their financial exposure to carbon risk in their valuation models. This thesis seeks to critically analyze whether Chinese investor Tri-Win used a methodology for quantifying and valuing carbon risk with the acquisition of Canadian oil and gas producer Hyperion and if it was sufficient or not. The implications from this thesis for Chinese investors stem from a unique methodology for quantifying carbon risk in oil and gas investments within the country of Canada. Through this analysis, it will be shown that Tri-Win did not accurately quantify their exposure to carbon risk leading to significant future carbon risk exposure. This lack of accurate valuing of carbon risk exposed them to substantial impending financial liabilities with regards to an encumbering stricter landscape for carbon emitters.
  • The Pragmatic Governance of Chinese P2P Chaos: Improvement in Supervision Philosophy and Legal Arrangement

    Source: Fan Zhang
    Date Submitted: 06 Feb 2017
    Views: 110
    Downloads: 7
    As developments in Internet finance coupled with deregulation and the growth of the financial media have tended to reduce transaction costs and informational asymmetries, the significance and exclusivity of China’s traditional financial institutions as financial intermediaries have been identified as factors in the country’s rapid economic development. In this context, peer-to-peer lending (P2P) has emerged as a type of Internet financing that creates a direct linkage between borrowers and investors via online platforms that is replacing traditional financial intermediaries and effectively bridging the gap between formal and informal finance. Although the Chinese P2P industry provides financial services, it also brings disorder and chaos, particularly in the context of the “dualistic model” of the Chinese financial system. In this context, this article reviews the history, development and advantages/disadvantages of three P2P modes and then recommends changes to the regulatory philosophy and legal arrangements for the P2P industry by constructing internal risk controls and strong regulations in the external environment.
  • Managing Elevated Risk Global Liquidity, Capital Flows, and Macroprudential policy—An Asian Perspective

    Source: Azis, Iwan J., Shin, Hyun Song
    Date Submitted: 06 Feb 2017
    Views: 119
    Downloads: 0
    Azis, Iwan J.; Shin, Hyun Song | January 2015
  • Asia SME Finance Monitor 2014

    Source: Asian Development Bank
    Date Submitted: 04 Feb 2017
    Views: 174
    Downloads: 3
    Asian Development Bank | September 2015
  • Assessing Mandated Credit Programs: Case Study of the Magna Carta in the Philippines

    Source: Khor, Niny, Jacildo, Ryan, Tacneng, Ruth
    Date Submitted: 04 Feb 2017
    Views: 234
    Downloads: 1
    Khor, Niny; Jacildo, Ryan; Tacneng, Ruth | November 2015
  • Enhancing Bank Supervision in Asia: Lessons Learned from the Financial Crisis

    Source: Zamorski, Michael J., Lee, Minsoo
    Date Submitted: 03 Feb 2017
    Views: 265
    Downloads: 2
    Zamorski, Michael J.; Lee, Minsoo | August 2015
  • Financial Inclusion, Financial Regulation, and Financial Education in Thailand

    Source: Tambunlertchai, Kanittha
    Date Submitted: 03 Feb 2017
    Views: 518
    Downloads: 4
    Tambunlertchai, Kanittha | July 2015
  • Housing Markets and Housing Policies in India

    Source: Tiwari, Piyush, Rao, Jyoti
    Date Submitted: 03 Feb 2017
    Views: 700
    Downloads: 15
    Tiwari, Piyush; Rao, Jyoti | April 2016
  • Improving Taxation Environment: Attracting Foreign Direct Investment

    Source: Singh, R. R.
    Date Submitted: 03 Feb 2017
    Views: 262
    Downloads: 3
    Singh, R. R. | June 2016
  • Imposition of MAT on SEZs: Concerns and the Way Forward

    Source: Mukherjee, Arpita, Bhardwaj, Bhavook
    Date Submitted: 03 Feb 2017
    Views: 350
    Downloads: 4
    Mukherjee, Arpita; Bhardwaj, Bhavook | February 2016
  • Housing Policies in Hong Kong, China and the People’s Republic of China

    Source: Li, Victor Jing
    Date Submitted: 03 Feb 2017
    Views: 622
    Downloads: 8
    Li, Victor Jing | April 2016
  • Housing Policy in the Republic of Korea

    Source: Kim, Kyung-Hwan, Park, Miseon
    Date Submitted: 02 Feb 2017
    Views: 392
    Downloads: 2
    Kim, Kyung-Hwan; Park, Miseon | April 2016
  • Optimizing PhilHealth’s case-based payment scheme to achieve greater financial protection

    Source: Dalmacion, Godofreda V., Juban, Noel R., Zordilla, Zenith
    Date Submitted: 02 Feb 2017
    Views: 119
    Downloads: 0
    Dalmacion, Godofreda V.; Juban, Noel R.; Zordilla, Zenith | February 2016
  • Financial Sector Legislative Reforms Commission (FSLRC) & Financial Sector Regulation in India

    Source: Bhagwati, Jaimini, Khan, M. Shuheb, Bogathi, Ramakrishna Reddy
    Date Submitted: 02 Feb 2017
    Views: 1807
    Downloads: 6
    Bhagwati, Jaimini; Khan, M. Shuheb; Bogathi, Ramakrishna Reddy | June 2016
  • Digital Financial Services in the Pacific: Experiences and Regulatory Issues

    Source: Asian Development Bank
    Date Submitted: 01 Feb 2017
    Views: 112
    Downloads: 0
    Asian Development Bank | June 2016
  • NZFC-Are Tightened Trading Rules Always Bad? Evidence from the Chinese Index Futures Market

    Source: Hai Lin, You Wang
    Date Submitted: 19 Jan 2017
    Views: 1713
    Downloads: 56
    Are Tightened Trading Rules Always Bad? Evidence from the Chinese Index Futures Market
  • Deregulation, Derivatives And The Threat Of Mass Destruction

    Source: Richard Duncan
    Date Submitted: 27 Dec 2016
    Views: 302
    Downloads: 0
    Eight years after the global financial system came very close to being destroyed by out of control speculation in the unregulated derivatives market, there is still nearly Half A Quadrillion Dollars worth of derivatives trading in opaque Over The Counter (OTC) markets. Next week I will upload a new Macro Watch video describing what has been done since the crisis to bring these “financial instruments of mass destruction” under control. Some progress has been made, but it has been incredibly slow. The vast majority of all derivatives still do not trade through exchanges. Consequently, the continuing lack of transparency means there is still a real risk that derivatives are being used to illegally manipulate interest rates, currencies and commodities. Moreover, margin requirements are still not in force. Margins provide a buffer that reduces counterparty risks. The lack of margins increases the danger that the failure of one counterparty could spread contagion and result in systemic collapse, as the near-failure of AIG came close to doing in 2008. My second book, The Corruption of Capitalism (2009), contained a chapter called Deregulation, Derivatives And The Threat Of Mass Destruction. It describes how derivatives were deregulated and points a finger at those most responsible. Alan Greenspan is heavily criticized for his role in the fiasco. This chapter serves as a good introduction to next week’s video. It’s a truly incredible story. I hope you will read it.
  • Changes in Financial Regulation in the Time of Trump: Financial Choice Act

    Source: Jim Allen, CFA
    Date Submitted: 22 Dec 2016
    Views: 361
    Downloads: 2
    This is a blog article from CFA Institute Market Insight Blog, posted on 18 November 2016.
  • 我国民营银行试点现状、面临问题 与政策建议

    Source: 王刚
    Date Submitted: 18 Dec 2016
    Views: 507
    Downloads: 9
    国务院发展研究中心招标课题 《我国新型民营银行稳健发展与有效监管研究》课题组 课题负责人:王刚 课题组成员:王刚、陈宁、薄岩、张伟 王刚、陈宁、薄岩 执笔
  • AFM -- Market Transparency and Pricing Efficiency: Evidence from Corporate Bond Market

    Source: Jia Chen, Ruichang Lu
    Date Submitted: 08 Dec 2016
    Views: 292
    Downloads: 10
    This paper investigates how mandatory post-trade market transparency affects pricing efficiency in the corporate bond market. Using the phase implementation of TRACE and a differences-in-differences research design, we find that when market transparency is greater, bond prices incorporate information quicker but contain less amount of bond-specific information. Specifically, greater market transparency leads to a shorter return drift and a lower price delay. These effects are similar for different liquidity, trading activity, and maturity subgroups. In contrast, greater market transparency leads to fewer bond analyst reports and higher co-movement between individual bond returns and market returns. These results highlight that market transparency has opposite impact on two dimensions of pricing efficiency, speed of information incorporation and amount of information incorporated in prices.
  • 日本法制下のイスラーム金融取引

    Source: 田原 一彦
    Date Submitted: 06 Dec 2016
    Views: 449
    Downloads: 7
    イスラーム世界研究 第2巻2号(2009 年3月)188-197 頁 Kyoto Bulletin of Islamic Area Studies, 2-2 (March 2009), pp. 188-197
  • China in Transition: What Next in Financial Regulations?

    Source: Anthony Neoh, SC
    Date Submitted: 04 Dec 2016
    Views: 240
    Downloads: 13
    This is one of the presentation powerpoint in CFA China Conference on 20 August 2016.
  • AFM_Intra-Day Revelation of Counterparty Identity in the World’s Best-Lit Market

    Source: Thu Phuong Pham, Peter Swan, Joakim Westerholm
    Date Submitted: 24 Nov 2016
    Views: 407
    Downloads: 3
    We study the impact of post-trade disclosure of broker IDs on market efficiency, trading volume and bid-ask spreads in a unique South Korean experiment. We find that simply revealing the ex-post order flow of the major brokers to the entire market improves market efficiency to the level of a random walk and increases trade volume by facilitating the rapid removal of asymmetric information. The least volatile and largest stocks experience a remarkable 59% rise in volume during the afternoon session. Realized spreads fall, indicating greater competition between liquidity suppliers, whereas market impact increases because of more rapid price discovery.
  • AFM - Inside the “black box” of Private In-house Meetings: Implications for Fair Disclosure and Insider Trading Regulation

    Source: Robert Bowen, Shantanu Dutta, Songlian Tang, Pengcheng Zhu
    Date Submitted: 19 Nov 2016
    Views: 639
    Downloads: 38
    While corporate private in-house meetings between investors and management are common across the world, there are generally no detailed reporting requirements for these meetings. The Shenzhen Stock Exchange in China is an exception and thus provides a unique opportunity to look inside the ‘black box’ to examine the structure and consequences of private in-house meetings. We develop a unique large-scale hand-collected dataset by accessing over 17,000 private meeting reports over 2012-2014 and use reported meeting details to examine the consequences of private in-house meetings. We find that, on average: (i) the stock market anticipates positive news in these private meetings as there is a significant stock price run-up starting about 30 days before the meeting date, (ii) the market reacts strongly and positively around these meeting dates, and (iii) the market reacts again around the subsequent public disclosure of the meeting notes. Further, we find that company insiders engage in significant trading activities around these meeting dates, selling over $12 billion USD of their shares – almost 62% of the total value of all insider trades for Shenzhen-listed firms in our sample period. Most importantly, it appears that company insiders are able to time their transactions: they tend to sell more shares before negative news disclosures but hold off selling when there is positive news to be disclosed in the meeting. Overall, our results suggest that firms disclose material non-public information during these private meetings, and that at least some meeting participants and company insiders trade on this information before it is publicly available. Finally, it appears that disclosure of private meeting details can be beneficial for market participants who are unable to attend such meetings. We discuss implications of these findings for disclosure requirements in the other countries.
  • AFBC - Do banks differently set their liquidity ratios based on their network characteristics?

    Source: Amine TARAZI, Isabelle DISTINGUIN, Aref MAHDAVI-ARDEKANI
    Date Submitted: 17 Nov 2016
    Views: 197
    Downloads: 4
    This paper investigates the impact of interbank network topology on bank liquidity ratios. Whereas more emphasis has been put on liquidity requirements by regulators since the global financial crisis of 2007-2008, how differently shaped interbank networks impact individual bank liquidity behavior remains an open issue. We look at how bank interconnectedness within interbank loan and deposit networks affects their decision to hold more or less liquidity during normal times and distress times and depending on the overall size of the banking sector. Our sample consists of commercial, investment, real estate and mortgage banks established in 28 European countries. We conduct instrumental variable estimations to examine the relationship between interbank network topology and bank liquidity. Our results show that taking into account the way that banks are linked to each other within a network adds value to traditional liquidity models. Our findings have critical implications with regards to the implementation of Basel III liquidity requirements and bank supervision more generally.
  • AFBC Share purchase plans and bank risk

    Source: Xiping Li, Chirs Malone
    Date Submitted: 16 Nov 2016
    Views: 184
    Downloads: 0
    This study examines how capital raising (CR) initiatives in the form of conjoint IPP/SPPs by the four major banks in Australia impacted on their collective market based risk. It is seen that the banks were successful in implementing the CR programmes with relatively minor negative impacts in terms of immediate announcement wealth effects, but they were followed by a period of significantly elevated risk and uncertainty.
  • HKUST Risk Management and Business Intellegence (RMBI) Newsletter Issue 7

    Source: Chow Miu Lam, Hui Sin Hang, Tsang Wing Wah, Lee Kwok Ho, Tam Kiu Fai
    Date Submitted: 07 Nov 2016
    Views: 389
    Downloads: 0
    Risk Management in the Medical Sector. Risk Management can bring a better decision making and reduce the number of errors, so as to ensure a high quality and effective service being provided. In the past 20 years, the hongkong Hospital Authority (HA) showed great support to develop large scale computer-based systems to manage and reduce the risk within the healthcare sector. To have a deeper understadning on how the systems work, we have invited Dr. CP Wong, Chairman of Society of Medical Informatics Ltd to share with us the success and benefits in risk managment in Hong Kong public hospitals. Safety and Risk Managemnt in the Railway Industry. As an industry with over 15,000 employees, the railway industry is inevitably at risk for human mistakes, leading to a need for risk management measures to reduce operational errors in order to achieve its customer pledge. Let's examine this under serveral issues: benmarking, drivers' training and selection, and risk management and risk identification.
  • HKUST Risk Management and Business Intellegence (RMBI) Newsletter Issue 8

    Source: Wong Yuen Man, Wong Cheuk Fun
    Date Submitted: 07 Nov 2016
    Views: 440
    Downloads: 0
    Humans always learn from history and our students should also learn from the past. This is the first time a case study is used as the main topic in the RMBI Newsletter series.London Whale Risk in 2012 is chosen as the topic of this chapter. This issue mainly focuses on the risks involved, including operational risks, analysis of VAR modeling aswell asthe influence of the Basel regulatory stan­ dard.
  • Do Franking Credits Matter? Exploring the Financial Implications of Dividend Imputation

    Source: Andrew Ainsworth, Graham Partington, Geoff Warren
    Date Submitted: 07 Nov 2016
    Views: 571
    Downloads: 3
    Examines the implications of dividend imputation for stock prices and returns, cost of capital, project evaluation, capital structure, payout policy and investor portfolios. it is argued that its removal would be detrimental.
  • MySuper: A New Landscape for Default Superannuation Funds

    Source: Warren Chant, Mano Mohankumar, Geoff Warren
    Date Submitted: 07 Nov 2016
    Views: 389
    Downloads: 1
    This report examines the Australian superannuation default fund landscape following the introduction of MySuper at the beginning of 2014.
  • MySuper vs. KiwiSaver: Retirement Saving for the Less Engaged

    Source: Geoff Warren
    Date Submitted: 07 Nov 2016
    Views: 640
    Downloads: 5
    Comparison of New Zealand's KiwSaver with Australia's MySuper default pension funds.
  • Delegation, trust and defaulting in retirement savings: Perspectives from plan executives and members

    Source: Adam Butt, Scott Donald, Doug Foster, Susan Thorp, Geoff Warren
    Date Submitted: 07 Nov 2016
    Views: 559
    Downloads: 3
    Australian superannuation fund members are surveyed to gauge motivations behind defaulting, as well as their wants and needs from their pension fund. Comparison is made with findings from interviews of fund executives.
  • MySuper: A Stage in an Evolutionary Process

    Source: Adam Butt, Scott Donald, Doug Foster, Susan Thorp, Geoff Warren
    Date Submitted: 07 Nov 2016
    Views: 205
    Downloads: 0
    Reports on interview with Australian superannuation fund executives about how their organisations responded to the MySuper regulatory framework for default retirement savings funds that was put in place at the beginning of 2014.
  • CIFR Project SUP002 on Default Superannuation Funds: Summary of Main Findings and Implications

    Source: Adam Butt, Scott Donald, Doug Foster, Susan Thorp, Geoff Warren
    Date Submitted: 07 Nov 2016
    Views: 300
    Downloads: 0
    Summary of CIFR project examining the ‘MySuper’ default superannuation fund regime. Outputs includes 5 working papers plus multiple journal articles; and includes industry analysis, interviews with executives and a member survey.
  • Crises and Central Banks

    Source: Ishwar Chidambaram
    Date Submitted: 02 Nov 2016
    Views: 3568
    Downloads: 288
    A post-crisis look at the increasingly fragmented monetary policies of global Central Banks and the implications for Main Street
  • AFBC - The Effect of Monetary Policy on Bank Wholesale Funding

    Source: Hyun-Soo Choi, Dong Beom Choi
    Date Submitted: 20 Oct 2016
    Views: 515
    Downloads: 6
    AFBC-The Effect of Monetary Policy on Bank Wholesale Funding
  • Making The Whole Greater Than The Sum Of Its Parts

    Source: Eddie Chan
    Date Submitted: 14 Oct 2016
    Views: 980
    Downloads: 10
    The investigative work of Professional Conduct has always been associated with words like secretive, mysterious, or private. That is only part of our story in Professional Conduct. Read on to find out more about our work in Professional Conduct and volunteering opportunities to help make a meaningful difference -- the CFA brand is important to protect, so is market integrity and ethical standards.
  • Analyst Report - Starhub (Oct 15)

    Source: Sylvester Yeo, Cheng Jun Song, Kenny Tay, Lim You Jie, Sarah Leong,
    Date Submitted: 11 Oct 2016
    Views: 512
    Downloads: 16
    Research report on Starhub dated October 2015 with a sell call
  • AFBC - Differences in the Reliability of Fair Value Hierarchy Measurements: A Cross-Country Study

    Source: Kevin Ow Yong,Chu Yeong Lim,Jeffrey Ng,Gary Pan
    Date Submitted: 25 Sep 2016
    Views: 491
    Downloads: 12
    Submission of conference paper to the 29th Australasian Finance and Banking Conference (AFBC) to be considered for the CFA Institute Research Awards available to papers presented at the conference.
  • AFBC - The Value Relevance of Regulatory Capital Components

    Source: Martien Lubberink, Roger Willett
    Date Submitted: 21 Sep 2016
    Views: 511
    Downloads: 12
    Our paper examines how investors value regulatory bank capital components, e,g. Tier 1 Hybrids, deduction of Goodwill, etc.
  • AFBC-Asset diversification and efficiency: Evidence from the Chinese banking sector

    Source: Kai Du, Andrew C. Worthington, Valentin Zelenyuk
    Date Submitted: 20 Sep 2016
    Views: 553
    Downloads: 12
    This paper investigates the impact of earning asset diversification on Chinese bank efficiency from 2006 to 2011. To do so, we adapt the Simar and Wilson (2007) (Journal of Econometrics) approach to panel data context so that approach allows for technology change over time. Regression results reveal that increasing the asset share of other earning assets (including securities and derivatives) is positively associated with bank efficiency. Decreasing the share of nonearning assets in total assets or increasing total equity has a similar impact. Our results also suggest that financial reforms currently being undertaken in China, including removing the regulatory requirement concerning the ratio of loans to deposits (a new draft amendment to the existing commercial banking law) and interest rate liberalization (a proposed draft amendment), are likely to induce a significant positive effect on bank efficiency in China.
  • AFBC – The Complementary Roles of Board Incentives and Market Monitoring: Theory and Evidence

    Source: Peter L. Swan
    Date Submitted: 18 Sep 2016
    Views: 563
    Downloads: 8
    Australasian Finance and Banking Conference Submission
  • Fintech Survey Report PPT 2016

    Source: Alan Lok, CFA
    Date Submitted: 29 Jul 2016
    Views: 1073
    Downloads: 121
    Fintech Survey PPT 2016
  • Fintech Survey Report 2016

    Source: CFA Institute
    Date Submitted: 29 Jul 2016
    Views: 691
    Downloads: 20
    Global Fintech Survey Report executed on April 2016.
  • Tokyo as an International Financial Centre

    Source: Laurel Teo, CFA
    Date Submitted: 18 Jul 2016
    Views: 653
    Downloads: 17
    PPT presentation pertaining to the official launch of the research paper by the Japan CFA Society on the 15th of July 2016.
  • 東京は国際金融センターになれるか?

    Source: 原田 武嗣, CFA, 瀬尾 周一, CFA
    Date Submitted: 18 Jul 2016
    Views: 654
    Downloads: 15
    Research paper by the Japan CFA Society publicly released on the 15th of July 2016.
  • Tokyo as an International Financial Centre

    Source: Taketsugu Harada, CFA,Shuichi Seo, CFA
    Date Submitted: 18 Jul 2016
    Views: 722
    Downloads: 15
    Research paper by the Japan CFA Society publicly released on the 15th of July 2016.
  • 暗池中的规则交易

    Source: Sherree DeCovny
    Date Submitted: 13 Jul 2016
    Views: 293
    Downloads: 3
    This article appears on CFA Institute Hedge Fund Journal 2016 issue, season 1.
  • 公平的证券交易所

    Source: Sherree Decovny
    Date Submitted: 16 Jun 2016
    Views: 298
    Downloads: 0
    This article appears on CFA Institute hedge fund journal 2015 issue, season 1.
  • 管理利益冲突

    Source: Christian Takushi, Christina Rulfs, CFA
    Date Submitted: 16 Jun 2016
    Views: 267
    Downloads: 2
    This article appears on CFA Institute hedge fund journal 2015 issue, season 1.
  • 显微镜下的微秒

    Source: Sherree DeCovny
    Date Submitted: 16 Jun 2016
    Views: 294
    Downloads: 0
    This article appears on CFA Institute hedge fund journal 2015 issue, season 1. The original article appeared on CFA Institute Magazine, July/August 2014, Volume 25 Issue 4.
  • 投资行业的第二次机会

    Source: Robert Jenkins, CFA
    Date Submitted: 16 Jun 2016
    Views: 275
    Downloads: 0
    This article appears on CFA Institute hedge fund journal 2015 issue, season 1.
  • 对冲基金尽职调查与法务考量

    Source: Joseph H. Nesler
    Date Submitted: 16 Jun 2016
    Views: 418
    Downloads: 2
    This article appears on CFA Institute hedge fund journal 2014 issue, season 2.
  • 更严格的合规标准只是虚张声势吗?

    Source: Maha Khan Phillips
    Date Submitted: 15 Jun 2016
    Views: 284
    Downloads: 3
    This article appears on CFA Institute hedge fund journal 2014 issue, season 2.
  • 高频交易的应对之道

    Source: Larry Harris, CFA
    Date Submitted: 15 Jun 2016
    Views: 290
    Downloads: 2
    This article appears on CFA Institute hedge fund journal 2014 issue, season 2.
  • GIPS标准帮你赢得客户

    Source: 卢嘉怡,CFA, CIPM, CAIA
    Date Submitted: 14 Jun 2016
    Views: 398
    Downloads: 3
    This article appears on CFA Institute hedge fund journal 2013 issue, season 1.
  • Trade Management Guidelines

    Source: CFA Institute
    Date Submitted: 13 Jun 2016
    Views: 644
    Downloads: 4
    This guideline appeared on CFA Institute's website in November 2004.
  • Research Objectivity Standards

    Source: CFA Institute
    Date Submitted: 13 Jun 2016
    Views: 553
    Downloads: 2
    This appeared on CFA Institute's website in October 2004.
  • CFA Institute Soft Dollar Standards (corrected October 2011)

    Source: CFA Institute
    Date Submitted: 13 Jun 2016
    Views: 274
    Downloads: 1
    This appeared on CFA Institute's website in November 2004.
  • Investment Management Code of Conduct for Endowments, Foundations, and Charitable Organizations

    Source: Kurt Schacht, JD, CFA, Jonathan J. Stokes, JD, Glenn Doggett, CFA
    Date Submitted: 13 Jun 2016
    Views: 566
    Downloads: 3
    This paper appeared on CFA Institute's website in September 2010.
  • Code of Ethics and Standards of Professional Conduct (effective 1 July 2014)

    Source: CFA Institute
    Date Submitted: 13 Jun 2016
    Views: 279
    Downloads: 1
    This appeared on CFA Institute's website in June 2014.
  • Standards of Practice Handbook, Ninth Edition (effective through 30 June 2010)

    Source: CFA Institute
    Date Submitted: 13 Jun 2016
    Views: 634
    Downloads: 1
    This handbook appeared on CFA Institute's website in June 2005. It is effective from 1 July 2005 to 30 June 2010.
  • Standards of Practice Handbook, Tenth Edition (effective 1 July 2010 through 30 June 2014)

    Source: CFA Institute
    Date Submitted: 13 Jun 2016
    Views: 251
    Downloads: 1
    This handbook appeared on CFA Institute's website in June 2010. It is effective from 1 July 2010 to 30 June 2014.
  • Standards of Practice Handbook, Eleventh Edition (effective 1 July 2014)

    Source: CFA Institute
    Date Submitted: 13 Jun 2016
    Views: 552
    Downloads: 3
    This handbook appeared on CFA Institute's website in June 2014. It is effective from 1 July 2014.
  • Global Investment Performance Standards (2005 edition)

    Source: CFA Institute
    Date Submitted: 13 Jun 2016
    Views: 261
    Downloads: 1
    This appeared on CFA Institute's website in February 2005.
  • Global Investment Performance Standards (GIPS®): As Adopted by the GIPS Executive Committee on 29 January 2010

    Source: CFA Institute
    Date Submitted: 13 Jun 2016
    Views: 267
    Downloads: 1
    This paper appeared on CFA Institute's website in January 2010.
  • Global Investment Performance Standards Handbook (3rd edition)

    Source: CFA Institute
    Date Submitted: 13 Jun 2016
    Views: 506
    Downloads: 6
    This appeared on CFA Institute's website in November 2012.
  • Code of Conduct for Members of a Pension Scheme Governing Body

    Source: CFA Institute
    Date Submitted: 12 Jun 2016
    Views: 599
    Downloads: 2
    It is available in English, Dutch and German.
  • Asset Manager Code of Professional Conduct

    Source: Kurt N. Schacht, JD, CFA, Jonathan J. Stokes, JD, Glenn Doggett, CFA
    Date Submitted: 12 Jun 2016
    Views: 718
    Downloads: 13
    Asset Manager Code of Professional Conduct is currently available in 13 languages. They are Arabic, Chinese, English, French, German, Indonesia, Italian, Japanese, Korean, Portuguese, Russian, Spanish and Thai.
  • Self-Regulation in Today’s Securities Markets: Outdated System or Work in Progress?

    Source: CFA Institute
    Date Submitted: 12 Jun 2016
    Views: 574
    Downloads: 3
    This paper appeared on CFA Institute's website in September 2007.
  • Self-Regulation in the Securities Markets: Transitions and New Possibilities

    Source: Linda Rittenhouse
    Date Submitted: 12 Jun 2016
    Views: 548
    Downloads: 4
    This paper appeared on CFA Institute's website in August 2013.
  • Shadow Banking: Policy Frameworks and Investor Perspectives on Markets-Based Finance

    Source: Rhodri G. Preece, CFA
    Date Submitted: 12 Jun 2016
    Views: 520
    Downloads: 2
    This paper appeared on CFA Institute in April 2015.
  • Packaged Retail Investment Products: Investor Disclosure Considerations for a Key Information Document

    Source: Rhodri Preece, CFA
    Date Submitted: 12 Jun 2016
    Views: 549
    Downloads: 1
    This paper appeared on CFA Institute's website in September 2013.
  • Restricting Sales Inducements: Perspectives on the Availability and Quality of Financial Advice for Individual Investors

    Source: Claire Fargeot, Matt Orsagh, CFA, CIPM
    Date Submitted: 12 Jun 2016
    Views: 525
    Downloads: 1
    This paper appeared on CFA Institute's website in December 2013.
  • Creating Value through Governance - Towards a New Accountability - A consultation

    Source: Moxey, P., Berendt, A.
    Date Submitted: 10 Jun 2016
    Views: 664
    Downloads: 6
    This consultation paper forms part of ACCA’s investigation to examine whether existing governance and risk management frameworks are ‘fit for purpose’. It asks whether corporate governance in practice, is helping business to create value or whether something has gone wrong. This paper argues that corporate governance is about creating value and that governance codes should be evaluated on how well they facilitate the creation of value. It sets out how a framework of ‘performing, informing and holding to account’ can work.
  • Ending Late Payment: Part 3 - Reflection on the evidence

    Source: Schizas, M.
    Date Submitted: 10 Jun 2016
    Views: 616
    Downloads: 3
    This is the third of a series of three reports on the problem of late payment and how businesses and governments can work together to alleviate it. It summarises the ACCA’s findings on this important issue and is a call to action for governments, financial services firms, large corporates and small businesses.
  • Non-Preemptive Share Issues in Asia: Role of Regulation in Investor Protection

    Source: Padma Venkat, CFA, Kurt N. Schacht, JD, CFA, Robert W. Dannhauser, CFA, Tony Tan, DBA, CFA
    Date Submitted: 09 Jun 2016
    Views: 342
    Downloads: 2
    Section 1 of this report2 defines preemption. Section 2 draws a comparison between regulations in different jurisdictions in Asia (i.e., Hong Kong, Malaysia, Singapore, and Thailand) and the United Kingdom. Section 3 analyses Hong Kong placings data over four years (January 2009 – December 2012) and highlights the trend and implications of multiple and continuous private placements completed through general mandates in Hong Kong. Section 4 summarises the rights, roles, and responsibilities of various stakeholders—management; boards; controlling shareowners; and minority, or noncontrolling, shareowners—within organisations and the role of regulators in the corporate governance ecosystem. This final section also recommends policy changes to improve minority shareowner rights in any organisation.
  • Natural capital and the accountancy profession: applying traditional skills to new thinking and practice

    Source: Jackson, R., Wilson, G., Herbertson, P., Adams, C., Gould, S.
    Date Submitted: 09 Jun 2016
    Views: 296
    Downloads: 4
    This paper focuses on the role that accountants are playing in the development of thinking, practice and frameworks for accounting for and reporting on natural capital by businesses.
  • Corporate Governance in Japan — Plenty of Room for Improvement

    Source: Matt Orsagh, CFA, CIPM
    Date Submitted: 08 Jun 2016
    Views: 282
    Downloads: 1
    This is a blog posted on CFA Institute's website on 4 November 2011.
  • Short Selling Restrictions and Market Completeness: The Malaysian Experience

    Source: Asjeet S. Lamba, Mohamed Ariff
    Date Submitted: 07 Jun 2016
    Views: 734
    Downloads: 0
    We examine the market's reaction around a series of events on the Kuala Lumpur Stock Exchange (KLSE) where the Malaysian government removed short selling restrictions on selected stocks and then subsequently reimposed these restrictions. These events provide a unique opportunity to analyse the effects of short selling restrictions on the price formation process in an emerging market. It has been argued that the impact on prices from incorporating negative information via short sales should lead to a correction of the upward bias in prices prevalent under short selling restrictions. This should result in lower prices and observed returns around the announcement of the removal of short selling restrictions. Conversely, it can be argued that the removal of these restrictions helps complete markets, permitting full price discovery. This is particularly important in a market like Malaysia where stock options are not traded. Here the immediate impact of a removal of short selling restrictions would be an upward revision in security prices resulting in positive observed returns. The opposite revaluation effects should hold in the situation when short selling restrictions are reimposed. We find evidence consistent with the explanation that the removal of short selling restrictions results in more complete markets and is valued by market participants, particularly for actively traded stocks.
  • Comparing Share Buybacks in Highly Regulated and Less Regulated Market Environments

    Source: Asjeet S. Lamba, Ian Ramsay
    Date Submitted: 07 Jun 2016
    Views: 520
    Downloads: 0
    Do changes in the legal and regulatory environment of a country affect companies' financing/investment decisions? In this paper, we address this question by examining the market's reaction to announcements of share buybacks in Australia. Before 1989, Australian companies were prohibited from repurchasing their shares and, until 1995, they were heavily regulated with few companies repurchasing their shares. In December 1995, the regulations governing share buybacks were simplified making it considerably easier for companies to repurchase their shares. The changing Australian legal regulation of share repurchases provides a unique opportunity to test the effects of legal regulation on companies' financing/investment decisions. We find that, unlike in the United States, the market reacts most positively to on-market buybacks (equivalent to open-market repurchases), while the reaction to other types of share buybacks is positive but not statistically significant. We also find that the abnormal returns earned by resource sector companies announcing share buybacks are higher than the abnormal returns earned by share buybacks announced by companies in the industrial and financial services sectors. An examination of matched companies announcing share buybacks before and after the regulatory changes in December 1995 shows that the market attaches a substantially higher value to the removal of stringent regulations governing share buybacks. This evidence is consistent with the expectation that the stringent regulation of share buybacks during 1989-1995 made them less effective as a credible signaling mechanism.
  • The Valuation Effects of Prime Rate Revisions: Is There an Advantage of Being First?

    Source: Asjeet S. Lamba, Mohamed Ariff
    Date Submitted: 07 Jun 2016
    Views: 572
    Downloads: 0
    US banks making prime rate revisions are known to suffer stock price declines, which is consistent with the Stiglitz-Weiss adverse selection theory, given the relative stickiness of interest rates. If banks suffer price declines, then why are some banks consistent leaders when revising prime rates? This research question is the focus of our paper and is examined in the relatively concentrated banking system of Singapore. Lead banks in Singapore initiating a large number of rate increases earned an average abnormal return of 5.2%, while non-lead banks also experienced positive abnormal returns of 3.9%, a result not in agreement with US-specific evidence. We argue that the rate increases (decreases) resulting in a significant stock price increase (decrease) for lead banks are consistent with a valuation effect in a concentrated banking system. Our results could be explained as a valuation effect from anticipated higher profits or as reward for being first. The first mover advantage may thus also have signaling value on quality.
  • Ethics Wake-up Call: Change Behavior before It’s Too Late

    Source: Tony Tan, DBA, CFA
    Date Submitted: 07 Jun 2016
    Views: 385
    Downloads: 0
    This is a blog posted on CFA Institute's website on 22 January 2013
  • The Role of Financial Advisers: What Should Clients Expect?

    Source: Tony Tan, DBA, CFA
    Date Submitted: 07 Jun 2016
    Views: 620
    Downloads: 1
    This is a blog posted on CFA Institute's website on 6 May 2013.
  • Turning Tide: Hong Kong Court Order Forces Insider Trader to Pay Victims

    Source: Tony Tan, DBA, CFA
    Date Submitted: 07 Jun 2016
    Views: 447
    Downloads: 0
    This is a blog posted on CFA Institute's website on 17 December 2013.
  • What Early Results on Australian and Canadian Trade-at Rules Mean for Regulation

    Source: Sviatoslav Rosov, PhD, CFA
    Date Submitted: 07 Jun 2016
    Views: 258
    Downloads: 0
    This is a blog posted on CFA Institute's website on 7 January 2015.
  • Australian Review: HFT and Dark Trading Don’t Merit Further Regulation

    Source: Sviatoslav Rosov, PhD, CFA
    Date Submitted: 07 Jun 2016
    Views: 285
    Downloads: 1
    This is a blog posted on CFA Institute's website on 16 November 2015.
  • 高频交易之乱局—市场激励机制的扭曲导致部分高频交易策略误入歧途

    Source: Dennis Dick, CFA
    Date Submitted: 07 Jun 2016
    Views: 301
    Downloads: 6
    This article appears on CFA Institute hedge fund journal 2014 issue, season 1. The original article appears on CFA Magazine, January/February 2013 | Vol. 24 | No. 1 | 2 pages
  • Can Asia Push Back the Tide of International Financial Regulations?

    Source: Paul Smith, CFA
    Date Submitted: 07 Jun 2016
    Views: 270
    Downloads: 0
    This is a blog posted on CFA Institute's website on 9 January 2013.
  • Give Hong Kong’s New Financial Services Development Council a Chance

    Source: Paul Smith, CFA
    Date Submitted: 07 Jun 2016
    Views: 422
    Downloads: 1
    This is a blog posted on CFA Institute's website on 24 February 2013.
  • From Bust to Boom: Southeast Asia’s Capital Markets Getting It Right This Time

    Source: Paul Smith, CFA
    Date Submitted: 07 Jun 2016
    Views: 443
    Downloads: 2
    This is a blog posted on CFA Institute's website on 16 April 2013.
  • Alibaba IPO: What It Says about Shareholder Rights in Asia

    Source: Paul Smith, CFA
    Date Submitted: 07 Jun 2016
    Views: 434
    Downloads: 2
    This is a blog posted on CFA Institute's website on 21 October 2013.
  • 浅谈中国对冲基金的过去,现在和未来

    Source: 费飞
    Date Submitted: 07 Jun 2016
    Views: 479
    Downloads: 2
    This article appears on CFA Institute hedge fund journal 2014 issue, season 1.
  • Blurry Images: Investors, Regulators, Auditors Missed Olympus Warning Signs

    Source: Padma Venkat, CFA
    Date Submitted: 07 Jun 2016
    Views: 268
    Downloads: 0
    This is a blog posted on CFA Institute's website on 22 November 2011.
  • Déjà vu: South Korean Banking Crisis Hits Again

    Source: Padma Venkat, CFA
    Date Submitted: 07 Jun 2016
    Views: 299
    Downloads: 0
    This is a blog posted on CFA Institute's website on 28 June 2012.
  • Asian Corporate Boards: Increase Lens Power to See Unknown Risks

    Source: Padma Venkat, CFA
    Date Submitted: 07 Jun 2016
    Views: 266
    Downloads: 0
    This is a blog posted on CFA Institute's website on 25 July 2012.
  • “Front-Running” in India Challenges Regulators

    Source: Padma Venkat, CFA
    Date Submitted: 07 Jun 2016
    Views: 266
    Downloads: 0
    This is a blog posted on CFA Institute's website on 21 December 2012.
  • India and Singapore Regulators Fill Ethics Void with Strict Financial Rules

    Source: Padma Venkat, CFA
    Date Submitted: 07 Jun 2016
    Views: 403
    Downloads: 2
    This is a blog posted on CFA Institute's website on 5 February 2013.
  • Mis-selling and Investor Protection in Asia Pacific (Video)

    Source: Padma Venkat, CFA
    Date Submitted: 07 Jun 2016
    Views: 266
    Downloads: 0
    This is a blog posted on CFA Institute's website on 23 April 2013. Video can be played in the Reference UFL below.
  • Hong Kong Tiger Asia Case: Are Insider Traders Losing Their Stripes?

    Source: Padma Venkat, CFA
    Date Submitted: 07 Jun 2016
    Views: 427
    Downloads: 1
    This is a blog posted on CFA Institute's website on 9 May 2013.
  • Mis-selling of Financial Products: How Are Investors Protected in Today’s Marketplace?

    Source: Padma Venkat, CFA
    Date Submitted: 07 Jun 2016
    Views: 343
    Downloads: 0
    This is a blog posted on CFA Institute's website on 10 February 2014.
  • Non-Preemptive Share Issues in Asia: Reforming Rules to Protect Investors

    Source: Padma Venkat, CFA
    Date Submitted: 07 Jun 2016
    Views: 315
    Downloads: 0
    This is a blog posted on CFA Institute's website on 2 March 2014.
  • Institutional Investors: What Is Their Role as Owners of Public Companies?

    Source: Padma Venkat, CFA
    Date Submitted: 07 Jun 2016
    Views: 608
    Downloads: 1
    This is a blog posted on CFA Institute's website on 15 April 2014.
  • Corporate Governance Reform in India: Gauging Impact on Investors

    Source: Padma Venkat, CFA
    Date Submitted: 07 Jun 2016
    Views: 596
    Downloads: 1
    This is a blog posted on CFA Institute's website on 8 May 2014
  • Toshiba Accounting Scandal: A Corporate Culture Problem

    Source: Mohini Singh, ACA
    Date Submitted: 07 Jun 2016
    Views: 753
    Downloads: 18
    This is a blog posted on CFA Institute's website on 30 October 2015.
  • Toshiba Accounting Scandal: Should Auditor Ernst & Young ShinNihon Get a Mulligan?

    Source: Matt Waldron
    Date Submitted: 07 Jun 2016
    Views: 749
    Downloads: 5
    This is a blog posted on CFA Institute's website on 28 July 2015.
  • Toshiba Scandal: Should Outgoing CFO Have Chaired the Audit Committee?

    Source: Matt Waldron
    Date Submitted: 07 Jun 2016
    Views: 278
    Downloads: 0
    This is a blog posted on CFA Institute's website on 13 August 2015.
  • Dark Pools in Asia Pacific — Watch This Space

    Source: Lee Kha Loon
    Date Submitted: 06 Jun 2016
    Views: 276
    Downloads: 2
    This is a blog posted on CFA Institute's website on 22 August 2011.
  • Asian REIT Market — Growing Pains for Investors

    Source: Lee Kha Loon
    Date Submitted: 06 Jun 2016
    Views: 473
    Downloads: 2
    This is a blog posted on CFA Institute's website on 21 November 2011.
  • REIT Governance: from Father to Son but at What Price?

    Source: Lee Kha Loon
    Date Submitted: 06 Jun 2016
    Views: 658
    Downloads: 3
    This is a blog posted on CFA Institute's website on 29 November 2011.
  • OTC Derivatives Reform — Asia Takes up the Challenge

    Source: Lee Kha Loon
    Date Submitted: 06 Jun 2016
    Views: 554
    Downloads: 1
    This is a blog posted on CFA Institute's website on 13 December 2011.
  • Peering Through the Labyrinth: Asian ETFs Need More Transparency

    Source: Lee Kha Loon
    Date Submitted: 06 Jun 2016
    Views: 497
    Downloads: 0
    This is a blog posted on CFA Institute's website on 15 March 2012.
  • Retail Investment Funds Performance in Asia Pacific: What Every Investor Should Know

    Source: Lee Kha Loon
    Date Submitted: 06 Jun 2016
    Views: 259
    Downloads: 0
    This is a blog posted on CFA Institute's website on 30 May 2012.
  • Treasury China Trust: Governance Clouds Value

    Source: Lee Kha Loon
    Date Submitted: 06 Jun 2016
    Views: 272
    Downloads: 1
    This is a blog posted on CFA Institute's website on 3 October 2012.
  • Bumi PLC: Corporate Governance Concerns Give Investors “Coal” Feet

    Source: Lee Kha Loon
    Date Submitted: 06 Jun 2016
    Views: 390
    Downloads: 3
    This is a blog posted on CFA Institute's website on 25 October 2012.
  • CFA Institute Study: Harmonize Standards for Mutual Fund Fee and Performance Reporting Across Asia

    Source: Lee Kha Loon
    Date Submitted: 06 Jun 2016
    Views: 294
    Downloads: 0
    This is a blog posted on CFA Institute's website on 16 January 2013.
  • Portfolio Holdings: Would More Disclosure in Mutual Funds Periodic Reporting Help?

    Source: Lee Kha Loon
    Date Submitted: 06 Jun 2016
    Views: 258
    Downloads: 1
    This is a blog posted on CFA Institute's website on 17 February 2013.
  • 2014 Market Outlook for Asia Pacific: When Diversity Strengthens Advocacy

    Source: Laurel Teo
    Date Submitted: 06 Jun 2016
    Views: 274
    Downloads: 0
    This is a blog posted on CFA Institute's website on 18 December 2013.
  • AIJ Investment Advisors: Made (off) in Japan

    Source: John Rogers
    Date Submitted: 06 Jun 2016
    Views: 273
    Downloads: 1
    This is a blog posted on CFA Institute's website on 27 February 2012
  • The REIT Way: Asia Pacific Markets Need Better Governance Practices

    Source: Angela Pica
    Date Submitted: 06 Jun 2016
    Views: 309
    Downloads: 1
    This is a blog posted on CFA Institute's website on 24 February 2011
  • Asia Pacific: Mis-selling Declines in Singapore, but Caution Still Warranted

    Source: Alexander Flatscher
    Date Submitted: 06 Jun 2016
    Views: 396
    Downloads: 0
    This is a blog posted on CFA Institute's website on 23 December 2011.
  • Happy Chinese New Year! Asia Makes Strides in Investor Protection

    Source: Alexander Flatscher
    Date Submitted: 06 Jun 2016
    Views: 602
    Downloads: 0
    This is a blog posted on CFA Institute's website on 2 February 2012.
  • Investors Gain As India Tightens Reins on Asset Managers and Financial Advisers

    Source: Alexander Flatscher
    Date Submitted: 06 Jun 2016
    Views: 261
    Downloads: 0
    This is a blog posted on CFA Institute's website on 2 March 2012.
  • AIJ Fallout Casts Harsh Spotlight on Japan’s Pension Fund Managers

    Source: Alexander Flatscher
    Date Submitted: 06 Jun 2016
    Views: 278
    Downloads: 0
    This is a blog posted on CFA Institute's website on 7 March 2012.
  • Hontex IPO: How Did It Happen and Who’s to Blame?

    Source: Alexander Flatscher
    Date Submitted: 06 Jun 2016
    Views: 436
    Downloads: 2
    This is a blog posted on CFA Institute's website on 29 June 2012.
  • Corporate Governance in Asia: Regulatory Landscape Urges Better Shareowner Communications

    Source: Alexander Flatscher
    Date Submitted: 06 Jun 2016
    Views: 615
    Downloads: 2
    This is a blog posted on CFA Institute's website on 9 August 2012.
  • Financial Sector Regulation Heats up in India amid Sahara Case

    Source: Alexander Flatscher
    Date Submitted: 06 Jun 2016
    Views: 346
    Downloads: 1
    This is a blog posted on CFA Institute's website on 12 September 2012.
  • CFA Institute: Market Fraud, Mis-selling Concerns Cloud Asia-Pacific Outlook

    Source: Alexander Flatscher
    Date Submitted: 06 Jun 2016
    Views: 267
    Downloads: 0
    This is a blog posted on CFA Institute's website on 12 December 2012.
  • Insider Trading: Does It Make You an Outsider?

    Source: Alexander Flatscher
    Date Submitted: 06 Jun 2016
    Views: 590
    Downloads: 0
    This is a blog posted on CFA Institute's website on 30 January 2013.
  • Mis-selling: An Ethical Issue Facing Asia-Pacific Markets

    Source: Alexander Flatscher
    Date Submitted: 06 Jun 2016
    Views: 362
    Downloads: 0
    This is a blog posted on CFA Institute's website on 2 April 2013.
  • MRI International Scandal: Another Reason Ethical Behavior is Needed in the Marketplace

    Source: Alexander Flatscher
    Date Submitted: 06 Jun 2016
    Views: 448
    Downloads: 3
    This is a blog posted on CFA Institute's website on 2 May 2013.
  • Asia-Pacific Asset Managers: No Compliance with CFA Institute Asset Manager Code Is Red Flag

    Source: Alexander Flatscher
    Date Submitted: 06 Jun 2016
    Views: 261
    Downloads: 0
    This is a blog posted on CFA Institute's website on 30 May 2013.
  • Asset Manager Code of Professional Conduct: Benefits for Investment Professionals

    Source: Alexander Flatscher
    Date Submitted: 06 Jun 2016
    Views: 418
    Downloads: 1
    This is a blog posted on CFA Institute's website on 19 August 2013.
  • Interpreting Client Entertainment as Part of the Pension Trustee Code

    Source: Alexander Flatscher
    Date Submitted: 06 Jun 2016
    Views: 390
    Downloads: 0
    This is a blog posted on CFA Institute's website on 23 October 2013.
  • The Role of Ethics in Shaping the Future of Hong Kong’s Investment Industry

    Source: Alexander Flatscher
    Date Submitted: 06 Jun 2016
    Views: 386
    Downloads: 0
    This is a blog posted on CFA Institute's website on 26 January 2014.
  • Share Placement and Rights Issues: What is the Role of Investor Education?

    Source: Alan Lok
    Date Submitted: 06 Jun 2016
    Views: 367
    Downloads: 1
    This is a blog posted on CFA Institute's website on 21 May 2014.
  • Buyer Beware: the Common Traits of Investment Product Scams

    Source: Alan Lok
    Date Submitted: 06 Jun 2016
    Views: 684
    Downloads: 2
    This is a blog posted on CFA Institute's website on 5 August 2014.
  • End the Silent Treatment: Why Regulators Should Promote Market-Fraud Prevention Efforts

    Source: Alan Lok
    Date Submitted: 06 Jun 2016
    Views: 538
    Downloads: 2
    This is a blog posted on CFA Institute's website on 14 August 2014.
  • Chinese Shadow Banking: Risks and Rewards

    Source: Alan Lok
    Date Submitted: 05 Jun 2016
    Views: 572
    Downloads: 5
    This is a blog posted on CFA Institute's website on 23 December 2014.
  • Are Tencent, Alibaba Innovators or a New Cog in the Chinese Regime?

    Source: Alan Lok
    Date Submitted: 05 Jun 2016
    Views: 398
    Downloads: 5
    This is a blog posted on CFA Institute's website on 12 February 2015.
  • Insider Trading: Is China Serious about Cleaning Up Its Capital Market?

    Source: Alan Lok
    Date Submitted: 05 Jun 2016
    Views: 287
    Downloads: 1
    This is a blog posted on CFA Institute's website on 25 February 2015.
  • To Reform Chinese Capital Market, Is Government ‘Cooking a Frog in Warm Water’?

    Source: Alan Lok
    Date Submitted: 05 Jun 2016
    Views: 306
    Downloads: 2
    This is a blog posted on CFA Institute's website on 14 May 2015.
  • Portfolio Pumping in Singapore — What the Numbers Tell Us

    Source: Alan Lok
    Date Submitted: 05 Jun 2016
    Views: 636
    Downloads: 3
    This is a blog posted on CFA Institute's website on 27 December 2015.
  • Dual Class Shares - Is India Ready for it?

    Source: Aditya Jadhav CFA
    Date Submitted: 27 May 2016
    Views: 3418
    Downloads: 64
    This research article intends to create awareness about DVRs/Dual class shares in India, to study the international as well as domestic experience and tries to examine the various factors that affect DVR share prices. This is an Accepted Manuscript of an article published by Taylor & Francis in Macroeconomics and Finance in Emerging Market Economies on 01 March 2012, available online: http://www.tandfonline.com/doi/abs/10.1080/17520843.2011.643539
  • China’s Circuit Breaker: Boon or Bane?

    Source: Alan Lok
    Date Submitted: 20 May 2016
    Views: 660
    Downloads: 10
    This is a blog posted on CFA Institute's website on 14 January 2016.
  • From Stocks and Bonds to Crowdfunding, China’s Capital Markets Regulatory Scene

    Source: Alan Lok
    Date Submitted: 20 May 2016
    Views: 578
    Downloads: 4
    This is a blog posted on CFA Institute's website on 3 February 2016.
  • China’s Money Market Reforms Aim to Stem Risk, Allow Funds to Thrive in Fintech Era

    Source: Alan Lok
    Date Submitted: 20 May 2016
    Views: 755
    Downloads: 12
    This is a blog posted on CFA Institute's website on 13 April 2016.
  • The Disaster of Dick Smith explained in detail

    Source: Angelo Aspris
    Date Submitted: 10 May 2016
    Views: 5066
    Downloads: 243
    This is a presentation that provides a detailed analysis of the Dick Smith collapse chronicling the acquisition by Anchorage from Woolworths in September 2012 through to its passing into voluntary administration in early 2016. This presentation addresses the role of Anchorage and senior management in this collapse. It also provides some commentary around PE listings and the role of auditors and investigative accountants. Questions and comments are welcome.
  • Asia-Pacific REITs—Building Trust through Better REIT Governance

    Source: Angela Pica
    Date Submitted: 09 May 2016
    Views: 561
    Downloads: 12
    Real estate investment trusts can provide many benefits to investors; however, these benefits often are clouded by poor governance that can weaken unitholders’ rights. Regulators and industry participants in prospective and existing REIT markets must establish robust governance structures to minimize risk of expropriation by insiders and strengthen unitholders’ rights.
  • Quantitative characteristics of misstated financial reports in the Stock Exchange of Thailand

    Source:
    Date Submitted: 21 Apr 2016
    Views: 465
    Downloads: 17
    Financial statement fraud signals in the Stock Exchange of Thailand.
  • The Importance of Culture

    Source: John Fraser
    Date Submitted: 23 Mar 2016
    Views: 731
    Downloads: 0
    This is a lunchtime address at the ASIC annual forum 2016 by John Fraser, Secretary to the Treasury on the topic: "The Importance of Culture" In his closing remarks, he said this: "All of us involved in the financial sector have to realise that if community expectations are not being met, the result may well be more prescriptive rules, which may over time not be a good outcome for industry or the general public. As I said at the outset, the world in which we find ourselves in is one in which the cultivation and maintenance of a robust institutional culture will be a key determinant of success. Rules and regulations will adapt to these circumstances but one thing should be a constant – ethical and honest behaviour flowing from the right culture in all parts of the economy."
  • Identifying the Key Catalysts of the Indian Research Environment

    Source:
    Date Submitted: 20 Mar 2016
    Views: 533
    Downloads: 12
    The findings of academic research carried out in developed markets such as India and published in scholarly journals are perceived to be remotely related to the real world of practitioners and moreover. Investment managers who apply scientific theory proven in developed market environment seldom get what they desire in developing markets. In a real world where investment practitioners look for actionable solution, academic scholars are perceived to complexify issues in their attempt to theorize real world problem by considering all possible manifestations and contingencies.
  • An Empirical Analysis of Credit Card Delinquency among BPO Employees (Philippines)

    Source: Abelardo Dulay, Abigail Diente, Laline Tabuzo, Alvia Lejano, Wilma Valenzuela
    Date Submitted: 16 Mar 2016
    Views: 621
    Downloads: 8
    An Empirical Analysis of Credit Card Delinquency among BPO Employees (Philippines)
  • Literature review on Insider Trading and Insider Trading Regulation - Presentation Material

    Source: Tony Tan, CFA
    Date Submitted: 09 Mar 2016
    Views: 575
    Downloads: 19
    Presentation of the 'Literature review on Insider Trading and Insider Trading Regulation' to various stakeholders at a roundtable event in India.
  • Literature review on Insider Trading and Insider Trading Regulation

    Source: Tony Tan, CFA
    Date Submitted: 09 Mar 2016
    Views: 582
    Downloads: 12
    Literature review on Insider Trading and Insider Trading Regulation
  • The Case for Financial Sector Liberalization in China

    Source: Tony Tan, CFA
    Date Submitted: 09 Mar 2016
    Views: 453
    Downloads: 0
    This article appeared in the Nov/Dec edition of CFA Institute Magazine.
  • Whither Hong Kong? Recent Protests Raise Key Questions about the City's Future

    Source: Tony Tan
    Date Submitted: 09 Mar 2016
    Views: 782
    Downloads: 0
    This article appeared in the Jan/Feb 2015 edition of CFA Institute Magazine
  • Portfolio Pumping in Singapore: Myth or Reality? Thought Leadership Project Findings

    Source: Tony Tan, CFA, Alan Lok, CFA
    Date Submitted: 09 Mar 2016
    Views: 647
    Downloads: 43
    This is a presentation used to explain the project findings
  • Portfolio Pumping in Singapore: Myth or Reality?

    Source: Tony Tan, CFA, Alan Lok, CFA
    Date Submitted: 09 Mar 2016
    Views: 541
    Downloads: 18
    Using tick-by-tick data on the FTSE ST indexes, which yielded more than 12 billion data points spanning the period from 2003 to 2013, we examine the existence of portfolio pumping activities on the Singapore Exchange. The findings indicate that pumping does not seem to exist at the market level. But heightened activities and abnormal security price increases were evident, particularly at year-ends. Exploring at a segmental and stock level, we derive additional insights on possible groups of stocks that could be pumped. In regard to the impact of enforcement activities, referenced with a landmark case related to portfolio pumping activities in Singapore, our analysis suggests that the combination of effective judicial process and market microstructure reforms have contributed to a reduction of such potential misdeeds.
  • The Role of Financial Advisers: What Should Clients Expect?

    Source:
    Date Submitted: 01 Mar 2016
    Views: 588
    Downloads: 0
    This blog was posted on CFA INstitute's website on 6 May 2013
  • Asia’s Growing Pains: The “Crowding-Out” Effect of Financial Regulation

    Source: Tony Tan
    Date Submitted: 01 Mar 2016
    Views: 622
    Downloads: 0
    This blog was posted on CFA INstitute's website on 19 February 2013.
  • Turning Tide: Hong Kong Court Order Forces Insider Trader to Pay Victims

    Source:
    Date Submitted: 01 Mar 2016
    Views: 416
    Downloads: 0
    This blog was posted on CFA Institute's website on 17 December 2013
  • Light-handed Regulation in New Zealand Banking and Financial Services: Has it worked?

    Source: David Tripe
    Date Submitted: 22 Feb 2016
    Views: 357
    Downloads: 2
    This article has been published in Applied Finance Letters, Volume 2(2), 2013, pp. 20-28.