Re-assessment of ABMI Group of Experts Report on legal and regulatory feasibility

(Draft)

April 2011

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Table of contents

1. Overview of legal and regulatory information ..................................................... 2

1.1 General ....................................................................................................... 2 1.2 Asian ICSD Model ....................................................................................... 2

1.2.1 Settlement – Overview ......................................................................... 2 1.2.2 Barriers ................................................................................................ 3

People’s Republic of China ............................................................................ 3 Hong Kong, China ......................................................................................... 4 Indonesia ....................................................................................................... 5 Japan............................................................................................................. 6 Republic of Korea .......................................................................................... 6 Malaysia ........................................................................................................ 7 Philippines ..................................................................................................... 7 Singapore ...................................................................................................... 8 Thailand ......................................................................................................... 8 Viet Nam ........................................................................................................ 9

1.3 CSD Linkage Model .................................................................................... 9 1.3.1 Pre -requisites ...................................................................................... 9 1.3.2 Barriers .............................................................................................. 10

People’s Republic of China .......................................................................... 10 Hong Kong, China ....................................................................................... 10 Indonesia ..................................................................................................... 10 Japan........................................................................................................... 10 Republic of Korea ........................................................................................ 11 Malaysia ...................................................................................................... 11 Philippines ................................................................................................... 11 Singapore .................................................................................................... 11 Thailand ....................................................................................................... 12 Viet Nam ...................................................................................................... 12

2. Target information to be checked per market ................................................... 12 People’s Republic of China .......................................................................... 13 Hong Kong, China ....................................................................................... 13 Indonesia ..................................................................................................... 13 Japan........................................................................................................... 13 Republic of Korea ........................................................................................ 14 Malaysia ...................................................................................................... 14 Philippines ................................................................................................... 14 Singapore .................................................................................................... 14 Thailand ....................................................................................................... 14 Viet Nam ...................................................................................................... 15

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1. Overview of legal and regulatory information 1.1 General

The purpose of this report is to provide a high level review of the legal and regulatory issues associated with establishing an Asian ICSD or of establishing a CSD Linkage for the ASEAN+3 markets. This report focuses on potential impediments or aspects of market mechanics that might either prevent an ICSD from providing its full range of services or make the possibility of a CSD Linkage feasible. It highlights legal barriers that have already been identified in the Group of Experts RSI report (the “original report”) issued in April 2010 and indicates changes or evolutions of regulations or laws noticed on each market. This document is intended to:

provide an overview of the legal and regulatory changes noticed in the ASEAN+3 markets and already identified in the legal feasibility study of the GoE RSI report for each market.

where possible, highlight the evolution of laws and regulations per market during the year 2010 since the compilation of the GoE RSI report.

support interpretation of the target information table. This document does not represent a legal opinion regarding any of the laws or regulations cited herein or that have been referred to implicitly. This document does not make any assumptions regarding the nature of the solution (either Asian ICSD or linkage of existing CSDs) that is envisaged. Neither does this document seek to anticipate the specific requirements that the implementation of either one of these solutions might demand. For your reference, please refer to the barriers list table in excel file for each market as attachment 1.

1.2 Asian ICSD Model

1.2.1 Settlement – Overview In the original Legal Feasibility Study, it appears that in respect of establishing a settlement link with a specific market, and to permit an Asian ICSD to provide its core function there are 2 requirements: (1) acceptance of omnibus accounts, which would enable the Asian ICSD to provide its full range of services such as internal settlement; and (2) acceptance or recognition of an intermediated or multi-tiered holding structure – which recognises the concept of nominee ownership - where the beneficial owner (the ultimate end investor) does not need to be specifically identified. This is because the ICSD does not act for its own account. Where intermediated holding are recognized, it ensures that the beneficial owners receive the full set of rights of any investor.

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1.2.2 Barriers People’s Republic of China

Neither of the ICSDs currently offer their customers access to the Chinese “A Share Market”. The “A Share” market is a major market for RMB-denominated securities issued by domestic issuers. A “B Share Market” exists to allow local issuers to emit domestic securities denominated in US dollars (USD) or Hong Kong dollars (HKD). In the original report it was highlighted that securities accounts must be segregated in name of beneficial owner1 - marked as barrier A1 (Market A, barrier number 1 in the barriers list table). Barrier A1 would prevent an Asian ICSD from providing internal settlement services and a broader range of services such as Collateral Management or Securities Lending facilities which are integral to the role of an ICSD as an “aggregator”. Article 139 and Article 166 of the Securities Law of the People’s Republic of China dated 29th April 2009 indicate upon the client’s application, a securities depository and clearing institution shall open a securities account and a securities company shall open a funds account for the client in accordance with relevant provisions. There are no new announcements or decrees published that would update this rule. Further investigation would be needed in order to check whether omnibus accounts will be permitted in the near future. However, The Chinese Government is working towards relaxing certain, specific regulations that affect the bond market. In December 2008, Chinese regulators announced that foreign banks could begin underwriting and trading corporate bonds. With regards to Articles 48 and Article 50 of Securities Depository and Clearing Rules dated 28th November 2008, as set out by the China Securities Regulatory Commission (CSRC) and the circulars of the People’s Bank of China (PBOC), the transfer of securities ownership between a clearing participant and its client shall be executed by the CSDCC. The PBoC announced in August 2010 that offshore banks engaging in RMB trade settlement, Hong Kong and Macau clearing banks and overseas central banks can open securities accounts with the depository and clearing institutions for the Chinese inter-bank bond market. Based on feedback from local authorities, with regard to the Asian ICSD, there is no specific policy on whether it would be able to become a direct account holder in either the CSDCC or CDC. Access by non-residents to the “A Share Market” remains restricted to entities that apply for and fulfil the requirements to act as Qualified Foreign Institutional Investors (QFIIs). This barrier is highlighted as barrier A3. QFIIs are allowed to invest in RMB-denominated financial products approved by CSRC within their respective investment quota. In addition, offshore banks engaging in RMB trade settlement, Hong Kong and Macau clearing banks and overseas central banks can invest into domestic inter-bank bond market. As indicated in the RSI Feasibility Study, there are aspects of the QFII mechanism that restrict the efficient operation of the activities of an ICSD organisation. Marked as barrier A4 in the table, it is mentioned in the original report that convertibility conditions of the RMB and restrictions on remittances will prevent the Asian ICSD from establishing a cash link with People’s Republic of China. The Chinese government has recently given indications that the timeframe for RMB convertibility could be accelerated; the clearest indication of this has been

1 Market Comparison Matrices (for bond) GoE Subcommittee B ( link available in the matrix)

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demonstrated in the development of the offshore RMB market via Hong Kong, China in order to facilitate the use of the RMB as a settlement currency for trade and other current account transactions. It can be supposed that the RMB will ultimately acquire an international status truly reflective of its economic weight and trade scale. In April 2009, the Chinese government announced a pilot scheme that permits cross-border trade - in Renminbi (RMB) – between selected business zones on the Mainland (Shanghai, Shenzhen, Guangzhou, Zhuhai and Dongguan) and Hong Kong, China. This scheme has subsequently been extended to cover trade and current account transactions between a total of 20 Chinese provinces and overseas markets, which collectively account for 95% of Chinese external trade. On July 19, 2010, The People’s Bank of China (PBOC), the Chinese central bank, and Hong Kong’s RMB clearing bank, Bank of China (Hong Kong) Limited (BOCHK), signed a revised Settlement Agreement on the Clearing of Renminbi Businesses in Hong Kong, China. Although this development allows the two existing ICSDs to be able to hold RMB cash balances in order to facilitate the settlement and custody of RMB-denominated instruments in Hong Kong, China, restrictions on the flow of “offshore RMB” into Mainland China remain in place. The offshore RMB markets has developed and the total volume of RMB deposits in Hong Kong, China rose to RMB279.6bn (US$42bn) by the end of November 2010, an increase of 29% on the corresponding figure for October 2010 and a 363% increase year-on-year. In August 2010, the PBoC announced that offshore RMB liquidity could be reinvested into the Chinese domestic (interbank) bond market. Following this announcement, offshore banks engaging in RMB trade settlement, Hong Kong and Macau clearing banks and overseas central banks2 can invest in the Chinese interbank bond market; in addition, purchase activity is subject to quotas. This development provides a mechanism for financial institutions to move offshore RMB funds back to the mainland Hong Kong, China No legal/regulatory issues were identified in the original report. Both European ICSDs have full links with the Central Moneymarkets Unit (CMU) operated by the Hong Kong Monetary Authority (HKMA). Omnibus accounts continue to be supported and the nominee concept is accepted. Neither the HKMA nor the Securities and Futures Commission (SFC) has published any circulars or new regulations during year 2010 and the first quarter of 2011 that would constitute a legal barrier from establishing a direct settlement link with the domestic CSD(s) in Hong Kong, China. Following the expansion of the RMB trade settlement scheme in June 2010, the HKMA and the People’s Bank of China (PBOC) signed a Supplementary Memorandum of Co-operation in July 2010 to strengthen co-operation and further promote the wider use of RMB outside Mainland China. At the same time, the PBOC and Bank of China (Hong Kong) Limited (BOCHK), the RMB Clearing Bank, signed a revised Settlement Agreement on the Clearing of RMB Businesses in Hong Kong, China. The revision of the Settlement Agreement effectively permits all corporates to open RMB bank accounts in Hong Kong, China and removes the restrictions on RMB conversion and interbank transfers between personal accounts and corporate accounts, while restrictions on individuals’ RMB conversion and cross-border

2 Currently this includes the central banks of Argentina, Belarus, Iceland, Indonesia, Malaysia, Singapore, South Korea and

Hong Kong, China.

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transfers of RMB funds into Mainland China still apply3. Under the new arrangement, ICSDs can open RMB accounts in Hong Kong, China and provide clearing and settlement services through their platforms.

Indonesia

As a clarification to the original report that states that “Clearstream Banking has recently opened a link”, it should be noted that Clearstream’s link for Indonesian equities and corporate bonds has been in place since 1996. Clearstream does not currently have published solution for government debt instruments. The original report states that from 01 September 2006, all corporate bonds and government bonds transactions must be reported to the Indonesian capital market regulator, BAPEPAM, through the stock exchange within 30 minutes of their execution. Reporting of OTC/off-exchange transactions must also be made by market participants or by an appointed market participant in the event that the parties to the transaction are not market participants. This regulation is maintained and governed by the rule X.M.3 which explains all bond transaction reporting requirements. The failure to submit necessary reports is subject to penalties imposed by BAPEPAM and are applied from the first hour following which the report is delayed. The market practice for local custodians in Indonesia in order to facilitate these reporting requirements is to maintain segregated (sub-) accounts in the name of the investor (and which are covered for tax purposes by an appropriate DGT form completed in the name of the investor). In October 2010, it was also announced by the KSEI that the Indonesian Central Securities Depository (PT Kustodian Sentral Efek Indonesia - KSEI) would introduce a unique identifier code, known as the Single Investor ID (SID), for investors who trade in securities via local brokers on the Indonesian Stock Exchange (IDX) and who, as a consequence, maintain an account in their name at the KSEI. The SID will be allocated to investors’ securities accounts at the KSEI; each KSEI account can support only one SID. The SID will be issued at registered account holder level and it is understood that from 1 April 2011 it will be mandatory to quote the SID as a reference for all exchange-based trades. Investors operating through multiple brokers will be required to maintain a single SID, which will be assigned to the multiple accounts that the investor has at the KSEI through its multiple brokerage relationships. At this stage, the SID is not required for settlement or custody purposes; however, this requires further monitoring as it could impact the responsibilities of an Asian ICSD. With regards to barrier marked C2 in the barriers list table as Attachment 1, the purchase of foreign currency against IDR below USD 100,000, or equivalent, per month must be supported by a written statement confirming that the purchase of foreign currency does not exceed USD 100,000 per month. This regulation remains the same as indicated in the original report and is still governed by Bank Indonesia Law No.10/28/PBI/2008 and Circular Letter No.10/42/DPD. In addition to the documentary requirements for entities entering into foreign currency transactions, it should be noted that non-resident cash account holders that make cash payments are required to provide “purpose codes” outlining the reason for the transaction (i.e. evidencing the underlying investment activity) and for payments that

3 Hong Kong Trade Development Council: http://www.hktdc.com/info/mi/a/ef/en/1X070B5Y/1/Economic-Forum/Hong-Kong-s-

Development-as-an-Offshore-Renminbi-Centre.htm

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exceed IDR 500 million, supporting documentation. Purpose codes are designated by the Bank of Indonesia and local custodians generally use settlement instructions received from non-resident account holders as documentary proof of an underlying transaction. An Asian ICSD would potentially be required to fulfil these requirements. Regarding tax processing issues, for non resident tax payer, the tax rate applied is 20% withholding tax, or as per Double Tax Treaty rate (as long as Certificate of Domicile or other required form is provided). Foreign investors are exempted from capital gains tax on equities listed and traded on the stock exchange (IDX). However, a sales income tax of 0.1% is applied as a flat rate on all sale transactions. Technically Capital Gains Tax on bonds is applied in Indonesia. Notwithstanding that, regulatory definition has construed the differences between the sales and purchase price as discount, hence they are taxable under the Withholding Tax regime, whereas for non resident tax payer, the tax rate applied is 20% withholding tax or as per Double Tax Treaty rate (as long as Certificate of Domicile or other required DGT form is provided). Regulation hasn’t changed on this particular point. Japan As per “Requirements for Establishing Direct Participants' Accounts and Customers' Accounts and Requirements for Approval as Indirect Participants and Foreign Indirect Participants in the JGB Book-Entry System” rule set out by the Bank of Japan (BoJ), an Asian ICSD would not be able to link directly to the JGB book-entry system. In fact, a non-resident entity applying to the BoJ to become a account holders at the BoJ would be required to satisfy the requirements for approval as a Foreign Indirect Participant (FIP) as described in the original report. Legislation was approved by the Japanese Parliament on March 28, 2001 which allowed foreign institutional investors to obtain exemption from withholding tax on interest from JGBs, provided the bonds were deposited in the BoJ's book-entry system through a specific foreign branch or agent of a Qualified Foreign Intermediary (QFI). QFIs have to be approved Foreign Indirect Participants (FIPs) of the book-entry system4. For corporate bonds held via JASDEC, as outlined in the original report, a non-resident entity is required to assume Foreign Indirect Account Management Institution (FIAMI) status in order to ensure that registration of corporate bonds can be made in the name of the FIAMI’s customer (the underlying FIP/QFI) via JASDEC in the books of the issuer. This would place an obligation on the customers of an Asian ICSD. Technically, the nominee concept is not recognised under Japanese Book Entry Law. Currently both ICSDs operate their links to Japan on an indirect basis via local sub-custodians. Republic of Korea Since the publication of the original report, the Korean government has taken the decision to revoke the tax exemption rules for capital gains and income that had been granted to the ICSDs. The ICSDs no longer provide securities safekeeping and custody services for government securities on behalf of non-resident investors in Korea through the omnibus account, due to their difficulty of accurately calculating customers’ tax amount. However, even after the revision of tax law, FX-related

4 RBC Dexia Market guide Japan

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regulations allow the ICSDs to hold omnibus accounts. Euroclear and Clearstream are still holding (“dormant”) omnibus accounts even though they no longer provide services through those accounts. Thus, if the ICSDs are actually to use omnibus accounts, they may need to modify their system so they can efficiently calculate how

much tax is imposed to which customer.

In addition, although the KRW is not subject to restrictions, foreign exchange must be conducted via either an appointed Foreign Exchange (FX) banks or a licensed broker in Korea. Licensed banks and brokers are eligible to participate in the interbank FX market. Foreign participation is not permitted.

Malaysia No legal/regulatory issues have been identified in the original report. Both Clearstream and Euroclear currently maintain active links to Malaysia. Omnibus accounts are supported. The link can be direct or indirect. There are no new amendments or revisions published on the Capital Markets and Services Act (2007) or on other regulatory laws that regulate Malaysian bond market during 2010. There is no restriction on the purchase of MYR via External Accounts (EAs) held by non-resident investors for settlement of the purchase of ringgit assets. The purchase of MYR on forward basis would require confirmation of underlying transactions, by way of declaration or documentation to the local custodian. Overdrafts in MYR are only permitted in the event of inadvertent delays due to technical errors for settlement of securities traded on Bursa Malaysia or settled through Real-Time Electronic Transfer of Funds and Securities System (RENTAS). These ringgit credit facilities are limited to two business days. Philippines Foreign investors are required to fund their account on or before Settlement Date since overdrafts are not allowed under local regulations. Prior approval is no longer required for foreign investors to repatriate excess PHP funds not used for investments. Foreign investors can repatriate excess PHP funded with inward remittances of FX. Manual of Regulations on Foreign Exchange Transactions (FX Manual) provides the general guidelines for the sale and purchase of foreign exchange. The FX Manual requires foreign investments to be registered with the BSP in order to obtain a Bangko Sentral Registration Document (BSRD) at the account level. The BSRD will be required if foreign exchange is purchased from the authorized agent banks (AABs) and/or their affiliate foreign exchange corporations (AAB-Forex corps) to service future remittances of dividends, profits and earnings and/or capital repatriation. In order to be able to offer cash services in the Philippines, a foreign corporation must first secure the necessary licenses or registrations from the appropriate government bodies. In the case of corporations or partnerships, the necessary incorporation papers from the SEC must first be obtained. For an Asian ICSD, the barriers identified in the original report are still maintained, as issuance of foreign investor documentation is still required (BSRD)5 for the purchase and sale of foreign currency against the Philippine peso. Funds converted to PHP from inward remittance must be invested in BSRD eligible instruments such as equities, government securities, money market instruments (i.e. corporate bonds),

5 Foreign Investments Act of 1991 (or Republic Act No. 7042):

http://www.lawphil.net/statutes/repacts/ra1991/ra_7042_1991.html

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and time deposits (with at least a 90 days maturity) in order for proceeds to be eligible for repatriation. Proceeds and income derived form investments may only be repatriated if the BSRD document for the original purchase of peso is available. An Asian ICSD would need to work with its cash correspondent bank to fulfil all documentary requirements related to this activity. On 5 November 2010, the BSP issued reforms to the foreign exchange regulatory framework under Circular No. 698. Under the new Circular, the sale of any foreign currency by an authorized agent bank (AAB) against the PHP for amounts in excess of US$60,000 (level increased from US$30,000) require supporting documents indicating the purpose of the foreign exchange transaction. As per BSP/Central Bank Circular 222, dated 24 December 1999, lending in pesos to non-residents are not allowed, except for certain exemptions as provided under Memorandum No. M-2007-021 dated 15 August 2007 which allow consumer lending only (auto loans, housing loans, etc.) to non-residents holding non-immigrant visas and staff and officials of diplomatic offices.

Singapore

No legal/regulatory issues were identified in the original report. European ICSDs have existing and established links to the market. Omnibus accounts and the nominee concept are still accepted. The link can be direct or indirect. The various legislative and quasi-legislative instruments applicable to the Market and its participants are set out by the Monetary Authority of Singapore (MAS) and regulated under the Securities and Futures Act. There are no circulars or new amendments of the Securities and Futures Act published during the year 2010 that would constitute a legal barrier but MAS published amendments that update the main act that regulate securities, SFA Act (Securities and Futures Act) regarding reporting requirements. Thailand Both European ICSDs have links today. No legal/regulatory issues are foreseen. With regards to cash accounts, an Asian ICSD could open a Non-Resident Baht Account for Securities Activity (NRBS) account with a correspondent bank. Purchase of THB for “same day” and “next day” value without underlying transactions can be made up to an aggregate of THB 300 million per group of non-resident per bank. The Bank of Thailand imposes a daily limit of THB 300 million outstanding at the end of the day on Thai Baht (THB) cash balances in the accounts of non-residents. This limit applies to aggregate account balances held by any non-resident entity with any Thai bank, including the total cash balance held in a Non-Resident Baht Account for Securities (NRBS) where amounts are not split according to the underlying beneficial owners. In order to comply with this limitation, market practice is for local custodians to enforce the following measures:

Their customers must keep their THB balances strictly at the lowest amount.

If this is not observed, a local custodian may be forced to perform an automatic same-day foreign exchange, without advice and charged at a

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penalty foreign exchange rate, on those underlying accounts that have the largest balances.

THB payments to the local cash account held at a local custodian must be

related to an immediate purchase of securities. However, please note that this limit would be share with the aforementioned overdraft limit. For example, if today ABC&Co. purchase THB 100 million for same day value without underlying and ABC&Co. also leave short balance at the end of the day amount THB 200 million, this still within THB 300 million limit per group of non-resident per bank. Please note that this circumstance also applies to ABC&Co’s subsidiary, branch, affiliate, etc, which considered as ABC&Co group according to the rules. On the other hand, selling THB for same day and tomorrow value without underlying securities transaction can be made for up to THB 10 million per group of non-residents and per bank. Viet Nam It is specified in the original report that convertibility of VND for securities market transaction is new. Viet Nam Dong (VND) is not freely convertible and The State Bank of Viet Nam (SBV) fixes the VND/USD on a daily basis. Pursuant to Decision 230/QD-NHNN dated on 11th Feb 2011 by State Bank of Viet Nam, the interbank market is adjusted to fluctuate within 1% per day band. VND cannot be traded offshore6. All FX trades against VND must be performed onshore with an authorized financial institution. VND can only be converted to foreign currency for repatriation purpose provided that investors have fulfilled tax obligations. Foreign investors do not require any local pre-investment approvals to invest in Viet Nam, however, prior to investing they have to obtain a securities trading code from the VSD for trading listed securities (charge USD 250), which are used, inter-alia, to monitor FOLs. These codes must be obtained at underlying investor/beneficial owner level. Pursuant to Clause 1 and 2- Article 3 of Decision No.121/2008/QD-BTC dated on 24th Dec 2008 by the Minister of Finance, all foreign investors who invest directly in Viet Nam securities market have to obtain a securities trading code from VSD and a capital contribution account in VND opened at a commercial bank is required to register with the State Bank of Viet Nam (SBV). This account can be activated only after getting approval from the SBV. With regards to barrier marked J2 on the need to handle Capital Gains Tax, foreign non-resident institutional investors are subject to a business income tax (BIT) of 0.1% on sale proceeds of securities except non-taxable bonds and 10% on interest received on taxable bonds on each coupon payment date7.

1.3 CSD Linkage Model

1.3.1 Pre -requisites This part of the document focuses on the possible individual impediments per market that may prevent CSDs from participating in such a solution from a general sense. The intended scope in the original analysis of legal feasibility of CSD Linkage solution according to ABMI targets is fixed income instruments.

6 RBC Dexia market guide

7 http://gmi.rbcdexia-is.com/rt/gss.nsf/Market+Profiles+List/Viet Nam?opendocument

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1.3.2 Barriers People’s Republic of China Regarding inbound investment, it is indicated in the original report that a review of the laws and regulations set out by the China Securities Regulatory Commission (CSRC) for the China Securities Depository and Clearing Co., Ltd (CSDCC) and the circulars of the People’s Bank of China does not indicate any law or regulation that would allow foreign CSDs or ICSDs to act directly as account holders in either CSD. There are no amendments or new law published during the year 2010 that would indicate regulation changed on this point. The restrictions regarding the convertibility of the RMB and restrictions on remittances will prevent Investor CSDs from establishing links with People’s Republic of China. Hong Kong, China It is mentioned in the original study that a positive precedent has been set by existing inbound and outbound links. Omnibus accounts are still permitted. The government of Hong Kong, China has established a Government Bond Programme that intends to develop the debt securities market in Hong Kong, China. Separately, since 2007, there has been an increasing number of RMB bonds issued in Hong Kong, China by corporates, financial institutions and the Ministry of Finance of the People’s Republic of China. The expansion of the RMB trade settlement scheme in June 2010 and the revised Settlement Agreement on the Clearing of Renminbi Businesses in July 2010 will enable Hong Kong, China to be further developed as an offshore RMB centre; there is also the possibility to clear EUR and USD (with finality) via the HKMA’s RTGS. Suitable cash correspondent services may be available. There are no restrictions on the Hong Kong Dollar, so no legal regulatory issues are foreseen.

Indonesia

There is no new publication, amendment or circular that would change or update legal barriers and/or legal requirement already mentioned in the original report and would prevent a CSD Linkage. Japan In the original report it is mentioned that a positive precedent has already been set by existing inbound and outbound links. Omnibus accounts are supported but many sub-custodians open segregate accounts for non resident investors so that they prepare documents for tax exemption. In an attempt to revitalise and internationalise the Japanese market, the Special Taxation Measures Law was amended on 1 April 2010 with effect on 1 June 2010 and, as a consequence, foreign investors may be eligible to a full exemption from withholding tax on convertible bonds. Eligible foreign investors can be foreign individuals or foreign corporations. Foreign investors with a special interest in the issuing company will not be eligible for exemption. Before a foreign investor can obtain tax exemption at source, all the intermediaries in the custody chain must have applied for, and obtained, from the Japan Securities Depository Center Inc. (JASDEC) Foreign Indirect Account Management Institution (FIAMI) status for corporate bonds.

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The financial institution with whom the foreign investor has an account must also have obtained such FIAMI status from JASDEC. In addition to this FIAMI status, the financial institution must have obtained Qualified Foreign Intermediary (QFI) status from the Commissioner of the National Tax Agency for corporate bonds. Consequently, investor CSDs will be required to comply in order to be able to offer such exemption in such cases. Republic of Korea In the case of Asian ICSD, even following the introduction of revised Tax Law in January 2011, FX-related regulations still allow the ICSDs to hold omnibus accounts. Therefore, if the ICSDs are actually to use omnibus accounts, they may need to modify their system so they can efficiently calculate how much tax is imposed to which customer. Malaysia Omnibus accounts are supported. Unlisted debt securities are deposited and settled at the SSDS (Scripless Securities Depository and Settlement) system. This system is part of the Real-Time Electronic Transfer of Funds and Securities System (RENTAS) owned by Bank Negara Malaysia and operated by Malaysian Electronic Clearing Corporation Sdn. Bhd. (MyClear). There are no investment restrictions for bonds. To open or update a securities account, a depositor must be classified as a foreigner by the depositary and must be in accordance with the Foreign Ownership Regulations.89 These regulations are still effective. Philippines Omnibus accounts are still supported for securities and cash. There are no new regulations, rules or decrees published by regulatory bodies and by the Philippines Depository & Trust Corporation (PDTC) in the year 2010 that would constitute a legal barrier. Bangko Sentral ng Philippines’s (BSP’s) FX Manual provides the general guidelines for the sale and purchase of foreign exchange. Investments, whose proceeds will be repatriated using FX sourced from the domestic banking system, must be registered with the BSP in order to obtain a Bangko Sentral Registration Document (BSRD) that will allow sale proceeds or dividends to be repatriated through the banking system. Prior approval is no longer required for foreign investors to repatriate excess PHP funds not used for investments. Foreign investors can repatriate excess PHP funded with inward remittances of FX. Exchange control regulations do not allow foreign investors to run overdrafts in PHP. The central bank imposes a minimum 90-day freeze on foreign funds placed in peso time deposits. BSRD issued for PHP time deposits will be cancelled if the deposits are pre-terminated before 90 days. In addition, buying of PHP intended for securities purchases, which are ultimately cancelled, cannot be repatriated unless the monies are re-invested10. Singapore

8 Bursa Depository Rule 25

9 Bursa Malaysia, Rules of Bursa Malaysia Depository Sdn Bhd, Part V Rules relating to Depositors Chapter 25

10 RBC Dexia Market guide

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A positive precedent has been set by the proposed link with Bursa Malaysia, which indicates that suitable cash correspondent services may be available. There are no restrictions on the Singapore dollar and no investment restrictions for bonds, so no legal or regulatory issues are foreseen. There are no holdings disclosure requirements for bonds. A review of reforms and amendments published this year does not indicate a CSD link is not feasible. Thailand It is specified in the original report that government bonds are tax exempt for all non-resident investors. However, Thailand’s Ministry of Finance announced the reintroduction of a 15 percent withholding tax on foreign investments in government debt. In fact, the Thai cabinet has endorsed the Finance Ministry’s proposal to impose a 15% withholding tax on capital gains on government bonds, state enterprise bonds and Bank of Thailand bonds. The new tax on these bonds took effect from October 13, 201011. Further clarification may need to be sought on the application of capital gains tax on free of payment transfers of government debt instruments where cash settlement occurs offshore. It should also be noted that the nominee concept is not recognised in Thailand and that generally beneficial ownership is recognized at the level of the account holder of the Thailand Securities Depository Co. Ltd (TSD) participant - although sub accounts can be opened at the level of the beneficial owner level. This should be taken into consideration as part of the analysis for a CSD linkage model. Viet Nam As mentioned in the previous section, restrictions regarding the convertibility of the Vietnamese dong (VND) may prevent Investor CSDs from establishing links with Viet Nam. The currency is not fully convertible and the VND cannot be traded offshore. Although there are no restrictions on repatriation, there is an obligation to ensure that all taxes and charges are paid before funds can be converted to hard currency and remitted offshore. As indicated in the original report, participation of the Vietnamese Securities Depository (VSD) would be via a Depository Member (DM). DMs are i) Vietnamese commercial banks, or, ii) branches of foreign banks that have obtained a depository license granted by the State Securities Commission, or, iii) securities firms that have already received a license for brokerage and dealing activities. As for the linkage between a non resident investor CSD and VSD, pursuant to Article 10 of Guideline on Membership of VSD issued with the Decision No.28/QD-VSD dated 22nd April 2010 by Chief Executive Officer of VSD, foreign CSDs are permitted to register direct account holding members at VSD. Besides, rights and obligations of foreign CSDs shall be governed by the Agreement on services provision signed between VSD and those CSDs after getting approval from the State Securities Commission.

2. Target information to be checked per market This part of the document is aimed to target properly the exact information needed in order to complete the reassessment; check the current status of legal and regulatory restrictions relevant to RSI already identified in the legal feasibility study of the GoE

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RBC Dexia Market profile (Link in target information table)

13

RSI report for each market. It will permit to make consultation to local regulators easier. The identification of institutions or authorities which can validate the opinions of the GoE will facilitate the validation process by the governments. People’s Republic of China Among legal and regulatory barriers mentioned in the report there is a need to check with Chinese Central Bank, People’s of Bank of China (PBOC), if securities accounts still must be segregated in name of beneficial owner and if there is a program in preparation that will permit omnibus accounts in a near future. With regards to Barrier marked A2 and A5, there is a need to check with China Securities Regulatory Commission (CSRC) if foreign entities are allowed to act directly as account holder in either China Securities Depository and Clearing (CSDCC) and check with PBOC and CSRC if regulation permits a foreign entity to act as direct account holder in Chinese CSDs. The QFII system (barrier A3 and A6) continue to represent a significant barrier. The opportunity should be taken to discuss further with local regulators whether there are any possible solutions for CSD linkage to take place within the restrictions and obligations that QFII imposes. Regarding barriers marked A4 and A8 with focus on RMB convertibility, PBOC and CSRC have launched the Pilot program of RMB Settlement of Cross-Border Trade Transactions. It would be useful to investigate whether the “offshore” market in Hong Kong could be used to support the (Chinese-focussed) activity of either an Asian ICSD or an Investor CSD within the framework of a CSD link. Hong Kong, China There are no circulars or new regulations published during the year 2010 and the first quarter of 2011 by the Hong Kong Monetary Authority (HKMA) or the Securities and Futures Commission (SFC) that would constitute a legal barrier from establishing a settlement link with Hong Kong, China. No legal and regulatory issues are currently foreseen. Indonesia New regulations published during the year 2010 do not update rules or barriers identified in the original report. Reporting requirements on bond transaction remain in place. Restrictions on purchase of foreign currency against Indonesian Rupiah (IDR) and reporting requirements for IDR transfers also remain. Japan The original report it is specified that the Asian ICSD cannot link directly to the JGB (government bonds), corporate bonds and municipal bonds book-entry system as a foreign entity needs to apply for the Foreign Indirect Participant (FIP) status (Barrier D1). To do so, the Asian ICSD shall satisfy the requirements for approval as a Foreign Indirect Participant. This regulation has been updated in September 2010 (see link in Target Information table) but should not change requirements on applications for FIP status. The FIP requirements would also place an obligation on the “Investor CSD” within the framework of a CSD linkage and this would require further discussion with the Bank of Japan.

14

As indicated under barrier D2, the requirements for a non-resident to fulfil under the FIAMI concept would also be onerous on an Asian ICSD and would also need to be investigated further within the context of CSD linkage. Omnibus accounts are allowed, but in practice many sub-custodians open segregated accounts for non resident investors in order to handle tax exemption and reporting. Further discussions will potentially be required with the Financial Services Authority, tax authorities and the Bank of Japan in order to streamline processes in this regard. Republic of Korea Following the recent revision in tax legislation (effective 1st January 2011) the ICSDs no longer support the operation of omnibus securities accounts at the Korean Securities Depository (KSD) and fulfil tax reporting obligations towards the local authorities on behalf of their underlying customers (and, in turn, the underlying ICSDs on behalf of their own underlying customers). Therefore, in practice, currently non-resident investors are able to hold government debt instruments (and corporate bonds) via a local custodian in a segregated securities account that is covered by an Investor registration Certificate (IRC). Further clarification from the KSD and local authorities is required in order to ascertain whether an alternative to this could be possible. Although currency convertibility and foreign exchange restrictions have largely been lifted, KRW funds must continue to be held under “segregated” cash accounts opened in the name of an IRC holder when a non-resident investor invests in corporate bonds. Malaysia No legal/regulatory issues have been identified. There are no new amendments or revisions published on the Capital Markets and Services Act (2007) or on other regulatory laws that regulate Malaysian bond market during 2010 that indicate current monetary regulation has changed. Philippines Issuance of foreign investment licenses are still required to create a peso cash link with Philippines. The purchase of foreign currency against PHP requires also the same type of documentation (BSRD). There are no new regulations, rules or decrees published by regulatory bodies and by the Philippines Depository & Trust Corporation (PDTC) in the year 2010 that would constitute a legal barrier. However it would be needed to check with Bangko Sentral ng Pilipinas whether reporting requirements remain as previously indicated. Singapore There are no circulars or new amendments of the Securities and Futures Act or any laws edited by Monetary Authority of Singapore (MAS) published during the year 2010 that would constitute a legal barrier. Thailand

15

Bank of Thailand requirements still state that the daily ending balance of an NRBS account must not exceed THB 300m. However, Thailand’s Ministry of Finance reintroduced a 15% withholding tax on foreign investments in government bonds from 13th October 2010. This new tax regulation could constitute a new legal barrier and therefore there is a need to check whether this new tax does not prevent Investor CSD to establish a link with Thailand. This information has been found in Market guides and articles. It would be needed to ask Bank of Thailand and Ministry of Finance where the original text regarding this regulation can be found. Further clarification may need to be sought on the application of capital gains tax on free of payment transfers of government debt instruments where cash settlement occurs offshore. Viet Nam It is stated in the original report that restrictions regarding the convertibility of the Vietnamese dong (VND) may prevent Investor CSDs or an Asian ICSD from establishing links with Viet Nam. The VND cannot be traded or settled offshore and is a managed currency as The State Bank of Viet Nam (SBV) fixes the VND/USD exchange rate on a daily basis. There is no new evidence to suggest that restrictions regarding the VND would be lifted completely although this could be checked with the SBV/Ministry of Finance. In addition, access for non-resident intermediaries/CSDs to the Vietnamese Securities Depository (VSD) is an important aspect to clarify for both the Asian ICSD and CSD Linkage concepts. As an additional development, the Vietnamese government has issued Decree 01/2011/ND-CP dated 5 January 2011 regarding the issuance of Government bonds, bonds underwritten by the government and municipal bonds. Essentially, this decree reclassifies into three types (treasury bills, treasury bonds and government bonds for construction of the Motherland), outlines the possibility for government bonds to be issued in freely convertible currencies for the domestic and international markets (subject to the approval of the Prime Minister and the relevant authorities) and indicates that foreign organisations and individuals may be considered as eligible purchasers of such securities. Regarding the latter, this appears to contradict Decision 211/2009/QD-TTg dated 13 February 2009 on the issuance of foreign currency denominated government bonds which appears to restrict their purchase to entities that maintain a physical presence and operations in Viet Nam. Forthcoming clarification over this apparent contradiction may also provide a greater insight into the restrictions that could affect either an Asian ICSD or a system of linkages amongst regional CSDs.

Attachment 1: Barriers List

Market optionBarrier

ReferenceNumberBarrier Information needed Impact Action Who Documents related Comments Status

A1

Securities Account must be

segregated in name of

beneficial owner

should securities accounts

still be segregated in name

of beneficial owner ?

Omnibus accounts are needed

because for the ICSD to provide its

cotre function as a securities

settlement system it needs to be

able to transfer ownership interests

in securities in book-entry or

electronic form from one account to

another account within an ICSD

(internal settlement)

Need to check regulations

published since compilation of

the Report

CSRC

Article 138 of Securities

Law of the People’s

Republic of China dated

29th April 2009

Securities accounts still

must be segregatedChecked

A2

CSRC & PBOC do not permit

foreign entities such as an

Asian ICSD to act directly as

account holder in either

CSDCC or CDC

Are foreign entities allowed

to act directly as account

holder in either CSDCC or

CDC from CSRC & PBOC ?

prevent ICSD to provide its core

function and limit action

Check wether if regulation has

not changed on this pointCSRC & PBOC

Articles 45 to 50 of

Securities Depository

and Clearing Rules

dated 28th November

2008

regulation hasn't

changedChecked

A3

QFII certification and its rules

implies to have a single (QFII

Trustee) custodian

is the QFII certification still

needed and the single

custodian rule stil up-to -

date?

means that Asian ICSD would need

to be certified as QFII or applly for

QFII status on behalf of its client

few changes have been

made,but certification would

imply further barrier, need to

check wether there is no updates

on regulations

PBOCregulation hasn't

changedChecked

A4

Convertibility of the RMB

(CYN) and restrictions on

remittances on Cash Accounts

Is the RMB fully convertible

now? What are the new

regulations regarding

convertibility of RMB ?

prevent Asian ICSD from

establishing a cash link with

People's Republic of China

check the changes that have

been made in materia of

settlement currency for trade

PBOC

check on Regulations

for Implementing the

Administrative Rules on

Pilot Program of

Renminbi Settlement of

Cross-border Trade

Transactions

Is there any new release

on the Pilot program of

RMB Settlement of

Cross-Border Trade

Transactions?

Checked

A5

Securities Accounts -

regulations set out by the

CSRC for the CSDCC do not

indicate any law that would

allow foreign CSDs or ICSDs

to act directly as account

holders in either CSD

can a foreign CSD act as

account holder for inbound

investments ?

would have an impact on service

delivery and costs

need to check if foreign CSD can

act as account holder for inbound

investment

CSRC & PBOC as above as above Checked

A6

If the Foreign CSD wants to

establish itself as Investor

CSD, it will have to become a

qualified securities company

and file QFII applications for

its clients, but the current rules

and regulations do not

indicate how or if foreign

entities could become

qualified securities company.

Can a foreign entity have a

QFII status ? And how ?

may prevent the CSD to establish a

link with the market

check if it is possible for a

foreign entity to become qualified

securities company. And find out

how ?

CSRC and PBOC

need to check with

supporting

documentation

Checked

A7

Holdings Disclosure -

Convertible bond holdings

have considerable reporting

requirements

What are the reporting

requirements on convertible

bond holdings ? Is there a

need to establish a reporting

functionality ?

may prevent Investor CSDs from

developing the capability to include

them

find the original text listing the

requirementsCSRC and PBOC

RBC Dexia Market

guidesremain the same Checked

A8

Cash Accounts-Non

Concertibility of RMB and

restrictions on remittances

as above as above as above as above as above as above Checked

Asian ICSD B1check new regulation published

since compliation of the report

Securities and

futures Commission

and

New regulations but do

not constitute barriers

CSD Linkage B2check new regulation published

since compliation of the reportHKMA To include link here

RMB cross border

transaction center

C1

All Corporate bonds and

Government bonds

transactions must be reported

to Bapepam-LK through Stock

Exchange

is information that has to be

reported the same ?

No major impact but it requires

additional time to set up a tracking

system and reporting process

Check wether reporting

requirements are the same since

compilation of the Report. Check

with new regulations published.

Bapepam-LK XM3-bapepam lk.pdf

Yes, bond transaction

reporting requirements

are the same and

governed by rule X.M.3

Checked

C2Purchase of foreign currency

against Ruppiah

is there new amendments

on Bank Indonesia

regulation No.

10/28/PBI/2008 and Circular

Letter No.10/42/DPD ?

These requirements for FX

restriction qnd documentation will

make the IDR cash link for the Asian

ICSD cumbersome and expensive,

but it would be feasible

Check whether purchase of

foreign currency against currency

is still regulated under the same

rules

Bank Indonesia

Bank Indonesia

regulation No.

10/28/PBI/2008

Circular Letter No.

10/42/DPD dated 27

November 2008

paragraph 4

regulation hasn't

changedChecked

C3 Tax processing

are the tax processing

requirements still the same

?

The Asian ICSD would need to rely

on services of a local subcustodian

bank to complete tax reclaim filings

and may need to develop complex

tax processing capabilities which

will be costly and cumbersome

check current tax processing

requirementsBank Indonesia

http://gmi.rbcdexia-

is.com/rt/gss.nsf/Market

+Profiles+List/INDONE

SIA?opendocument

regulation hasn't

changedChecked

CSD Linkage C4check new regulation published

since compliation of the reportBank Indonesia

No new regulation that

might affect CSD

Linkage

Checked

D1

The Asian ICSD cannot link

directly to the JGB

(government bonds) book-

entry system

Can the Asian ICSD link

directly to the JGB book-

entry system ?

no major impacts, just on costs and

time processing

need to check with regulator if

the information up-to date

Bank of Japan for

Government Bonds

http://www.boj.or.jp/en/t

ype/law/furiketsu/touyo0

6.htm

regulation remains the

samechecked

D2

For corporate and municipal

bonds foreign insitiutions also

cannot be direct participants

of JASDEC because Qualified

Foreign Intermediaries (QFIs)

are limited to Foreign Indirect

Account Management

Insitutions by the tax

regulations

Are QFIs still limited to

Foreign Indirect Account

Management Institutions by

the tax regulations ? Is a

direct link feasible ?

long way to complete the various

applications as FIP with the Bank of

Japan and QFI with the Nihombashi

Tax Office

check if regulation has changed

or is still up-to date?

Bank of Japan

Nihombashi Tax

Office

http://www.boj.or.jp/en/t

ype/law/furiketsu/touyo0

6.htm

regulation hasn't

changedChecked

CSD Linkage D3

Omnibus accounts are

supported but many

subcustodians open

segregate accounts for non-

resident investors so that sub-

custodians can prepare

documents for tax exemption

Do subcustodians open

segregate accounts for non-

resident investors?

prevent Investor Csds from

providing some servicescheck if the process is up-to-date

Bank of Japan

and Depositories

http://gmi.rbcdexia.com/

rt/gss.nsf/Market+Profil

es+List/JAPAN?opendo

cument

need to check if it is due

to tax regulationchecked

E1

need to complete applications

to have QFI status and

develop reporting tools to

provide to BOK, NTS and FSS

is it still needed to have QFI

status ? And reporting

requirements are still the

same ?

No major impactcheck new regulation since

compilation of the report

BOK

NTS

FSS

more work is required

to find documentationpending

E2Offshore FX is not permitted

for KRW

is offshore FX still not

permitted?limit service offering

check new regulation since

compilation of the report

more work is required

to find documentationpending

CSD Linkage E3

need for investor CSDs to

complete appication to have

QFI status, need to develop

reporting process to be

provided to BOK, NTS and

FSS

as above as above as above as abovemore work is required

to find documentationpending

Asian ICSD E4 segregated accounts

are omnibus accounts

supported for corporate

bonds ?

prevent Asian ICSD to provide

internal settlement services and a

larger range of services such as

Collateral Management or Securities

Lending facility…no cash link is

feasible

check regulations changes, new

regulation

BOK

NTS

FSS

more work is required

to find documentationpending

CSD Linkage E5

need for investor CSDs to

duplicate the use of

segregated accounts

would reduce cost and complexity

while making the internalization

process simpler at Investor CSDs,

prevent Investor CSDs from

including corporate bonds in scope

more work is required

to find documentationpending

Republic of Korea- Corp

bonds

Asian ICSD

Japan

Asian ICSD

Asian ICSD

Republic of Korea- Gov

bonds

Checked

No Barrier

No Barrier

No Barrier

Asian ICSD

People's Republic of

China

CSD Linkage

Hong Kong, China

Indonesia

Market optionBarrier

ReferenceNumberBarrier Information needed Impact Action Who Documents related Comments Status

Asian ICSD

People's Republic of

China

Asian ICSD F1 No Barriercheck new regulation published

since compliation of the reportBNM Checked

CSD Linkage F2 No Barriercheck new regulation published

since compliation of the reportBNM Checked

Asian ICSD G1

need to establish a reporting

functionality to comply with

currency control rules because

existing central bank

regulation mandate

issuance/utilization of foreign

investment license on per

trade per registered investor

.Purchase of foreign currency

against sale of Philipine peso

by non-residents/foreign

investors needs to be

supported by duly-registered

foreign investment license

with an approved underlying

investment transaction

have reporting requirements

evolved or changed since

compilation of the report ?

documentation and license required

requires time and cost.

Check if foreign investors

licenses are still required SEC

Clearstram market

guide

Issuance of foreign

investment license to

open a peso account

and to purchase foreign

currency against PHP is

still required

Checked

CSD Linkage G2 No Barriercheck new regulation published

since compliation of the reportSEC

see also RBC Dexia

Market guide

No new regulation that

might affect CSD

Linkage Model

Checked

Asian ICSD H1 No Barriercheck new regulation published

since compliation of the report

MAS and The

Central Depository

http://statutes.agc.gov.s

g/non_version/cgi-

bin/cgi_retrieve.pl?actn

o=REVED-

289&doctitle=SECURITI

ES%20AND%20FUTU

RES%20ACT%0A&date

=latest&method=part

There is no new

regulation that

constitute a legal barrier

but MAS published

amendment that update

the main act that

regulate securities, SFA

Act (Securities and

Futures Act)

Checked

CSD Linkage H2 No Barriercheck new regulation published

since compliation of the report

MAS and The

Central DepositoryChecked

Asian ICSD I1 No Barriercheck new regulation published

since compilation of the report

Securities and

Exchange

Commission

http://gmi.rbcdexia-

is.com/rt/gss.nsf/Market

+Profiles+List/THAILAN

D?opendocument

outstanding limit of

THB 300 million is up-to-

date

see rbc market profiles

(link)

Checked

CSD Linkage I2 No Barriercheck new regulation published

since compilation of the reportMinistry of Finance

http://gmi.rbcdexia-

is.com/rt/gss.nsf/Market

+Profiles+List/THAILAN

D?opendocument

reintroduction of 15%

witholding tax on

government bonds for

foreign holdings,

effective from october

2010

Checked

J1

No barrier but as the

convertibility of the VND for

securities market transactions

is new, it implies additional

time to determine wether any

special status.

is there any specific status

needed for securities market

transaction

may prevent from having the

required status and establish a link

on the market

check rules set out by local

regulators on this specific point

Ministry of Finance

and Bank State of

Vietnam

Clearstream market

guides

VND is not freely

convertibleChecked

J2

functionality might be needed

to handle the capital gains tax

and/or physical delivery of

unlisted bonds

what are the legal

requirements regarding

capital gains tax ? Do

delivery of unlisted bonds

still physical ?

takes time and cost

check wether there is no update

regarding delivery of unlisted

bonds

State Securities

Commission

RBC Dexia Market

guides

non-resident

institutional investors

are subject to a

business income tax

(BIT) of 0.1% on sale

proceeds

Checked

CSD Linkage J3 No Barriercheck new regulation published

since compilation of the reportRegulatory bodies

regultion remain the

sameChecked

Asian ICSD

Viet Nam

Malysia

Philippines

Singapore

Thailand

Regulators List

Items Indonesia Malaysia Thailand Philippines Singapore Viet Nam People's Republic of

China

Hong Kong,

China

Republic of

Korea

Japan

1Currency ISO IDR (Indonesian Rupiahs)

MYR (Malaysia

Ringgit)THB (Thai Baht)

PHP (Philippines

Pesos)

SGD (Singapore

Dollar)

VND (Vietnamese

Dong)RMB (Renminbi Yuan)

HKD (Hong Kong

Dollar)KRW (Korean Won)

JPY

(Japanese

Yen)

Securities

Commission of

Malaysia (SC)

Ministry of Finance

(MOF),

Securities and

Exchange

State Securities

CommissionChina Securities Regulatory

Securities and

FuturesFinancial Services

and Bank Negara

Malaysia (BNM)

Securities and

Exchange

Commission

(SEC)(SSC) Commission (CSRC), State

Commission of Hong

KongCommission (FSC)

Commission (SEC) Administration of Foreign (SFC)

Exchange (SAFE)

Bangko Sentral ng

PilipinasPeople’s Bank of China Hong Kong Monetary

(BSP) (PBOC) Authority (HKMA)

Indonesian Central

Securities Depository

(KSEI) for corporate

bonds.

Bursa Malaysia

Depository Sdn. Bhd

for listed corporate

bonds.

Philippine

Depository &

Trust

The Central

Depository (Pte)

Vietnam Securities

DepositoryChina Securities Depository

Hong Kong Securities

Clearing Company

Limited (HKSCC-

CCASS);

Bank of

Japan (BOJ)

for

Government

Bonds

Corporation

(PDTC), Registry

Ltd. (CDP) and

Monetary(VSD) and Clearing Corporation

BI (Bank Indonesia

Scripless Securities

Settlement System:BI-

SSSS) for Government

bonds & Certificates of BI

(SBI)

Bank Negara Malaysia

(RENTAS) for unlisted

debt securities issued

by corporate and

government

of Scripless

Securities

Authority of

SingaporeLimited (CSDCC)

Central

Moneymarkets Unit

(CMU)

Japan

Securities

Depository

Center

(JASDEC) for

corporate

bonds

(RoSS) for

government

Securities

Listed bonds: Bursa

Malaysia Securities

Clearing Sdn Bhd

The Central

Depository (Pte)

Vietnam Securities

DepositoryChina Securities Depository

Korea

Exchange(KRX) /

Korea

JGB:Japan

Government

Bond

Clearing

Corporation

(JGBCC)

Ltd. (CDP)(VSD) and designated

Clearingand Clearing Corporation

Securities

Depository

Unlisted debt

securities: None

Bank - Bank

Investment &Limited (CSDCC)

Corporate

bonds:

Development of

Vietnam (BIDV)None

CDP has an

account at

Clearstream

Bi-lateral: Euroclear,

Clearstream, New

Zealand, KSD

(Bilateral):Hong

Kong(CMU)

CDP uses NSC

omnibus account

at DTCC

JASDEC

Unilateral:

(Unilateral):

Euroclear,

Clearstream

l        CMU has an

account at

Austraclear in

Australia

l        China CDC has

an account at CMU

No

Euroclear and

Clearstream have

accounts at sub

custodians which are

RENTAS members

NoPDTC has account

at ClearstreamNo

CDC participants who have

HK CMU account can clear

through CMU and use CMU’s

international linkage

5

CCP / Clearing House

Indonesian Clearing and

Guarantee Corporation

(KPEI)

Bonds: Thailand

Securities Depository

CompanyLimited;

(Futures & options:

Thailand Clearing

House Co)

Euroclear

and

Clearstream

have account

at sub -

custodians.

Sub-

Custodian

have access

to JASDEC

and BOJ.

Securities

Clearing　Corpora

tion of

the　Philippines

(SCCP)

Hong Kong Securities

Clearing Company

Limited (HKSCC-

CCASS / Hong Kong

Interbank Clearing

Limited

6

Linkage to other CSDs

Monetary Authority

of　Singapore

(MAS)

State Bank of Vietnam

(SBV)

Bank of Korea

(BOK)

Bank of

Japan (BOJ)

4

Depositories

Thailand Securities

Depository Company

Limited (TSD)

Korea Securities

Depository

2

Market Regulator

Capital Market and Non-

Bank Financial Service

Supervisory Agency

(BAPEPAM-LK)

Monetary Authority

of　Singapore

(MAS)

Financial

Services

Agency (FSA)

3

Central Bank Bank Indonesia (BI)Bank Negara Malaysia

(BNM)Bank of Thailand (BoT)