The Federal Reserve Board approved an interim final rule requiring that consumers be notified when their mortgage loan has been sold or transferred. The Fed was implementing changes to Regulation Z, its rule for Truth in Lending Act disclosures, to "provide compliance guidance and greater certainty on the new requirements." The Fed is making compliance with the new Fed rule optional for 60 days to allow time for operational changes by lenders and investors. (Source: Reuters)

The European Central Bank will tighten its rating requirements for banks using asset-backed securities (ABS) as security in its lending operations. From March 1st, 2010, new ABSs will require at least two ratings for newly-issued bonds to be eligible as collateral. The ECB had previously required one rating at the AAA/Aaa level. From March 2011, all ABSs have to be backed by two AAA/Aaa ratings, including the ones issued before the new rule comes into effect. (Source: Reuters)

Microsoft's use of two Chinese fonts developed by Zhongyi Electronic was not covered by a licence agreement between the two, a Chinese Court said in a verdict, and therefore infringed Zhongyi's intellectual property rights. Once the ruling takes effect, Microsoft must stop selling all PC operating systems that use the fonts including the Chinese language editions of the second edition of Windows 98, Windows 2000, Windows XP and Windows Server 2003. (Source: Financial Times)

India has decided to free the pricing for import of technology and use of trademark. The move was aimed at expediting projects in collaboration with foreign technology providers, since companies would be able to enter into tie-ups without seeking prior government approval, including those for pricing. They would be able to make the required payments and merely inform the Ministry of Commerce and Industry. The officials, however, said the freedom in pricing would be for sectors where foreign direct investment was allowed and there was no breach of the sectoral limits. (Source: Business Standard)

China has launched a national pilot project to provide loans to companies that are eligible to put up their intellectual property rights as collateral. Six Chinese lenders, including Industrial and Commercial Bank of China and China Construction Bank, signed agreements or intent worth 1.308 billion yuan in loans with 18 enterprises. The State Intellectual Property Office had decided to launch similar projects in cities including Beijing and Shanghai. Previously, technological innovation-oriented enterprises were difficult to get financial support from banks. (Source: Xinhua)

Charitable trusts, if registered as non-profit organisations, will not only have to disclose the source of their funds, but also be scrutinised for large monetary transactions. The change has been done by an amendment to the Prevention of Money Laundering Act 2002. Earlier, the entities that fell under the ambit of the law included only chit fund companies, banking companies, financial institutions and housing finance companies. The move would affirm India's attempts towards getting membership in the Financial Action Task Force. (Source: Business Standard)

STEP has announced the launch of a new qualification. The STEP Diploma for England and Wales (Trusts and Estates): Accountants and Tax Practitioners focuses on the legal principles and practices underlying the administration of trusts and estates and on providing a broad legal understanding of the trust vehicle. Prospective applicants will need to demonstrate a minimum of seven years' post-qualification experience in the private client field with some direct exposure to trusts and/or estates work. They will also need to hold an existing, relevant, professional qualification in accountancy or tax. (Source: Tax-News.com)

A copy of the Swedes' proposed redrafting strikes out the original proposal, which would allow the European Commission to impose permanent limits on the level of leverage that managers could use. Instead, it would empower competent authorities to impose limits on leverage "where the stability and integrity of the financial system may be threatened". The proposal has deleted the passage in the original draft directive that refers to a leverage threshold that "should not be breached at any point in time". (Source: Wealth Bulletin)

China's private equity industry could grow to $1 trillion Chinese yuan over the next five years from less than $100 billion yuan now. One major policy the government has taken is to encourage PE funds by giving them tax incentives from their investments. China's PE market will be increasingly favorable to domestic players who are better positioned to fund small- and medium-sized firms in the mainland. These firms do not have sufficient capital to grow, giving a very good chance to China's local PEs. (Source: Reuters)

India has now allowed mutual funds to be traded on stock exchanges so that more investors can access them and have various categories of securities to get assured of maximum returns. Stock brokers intending to extend the transaction in mutual funds through stock exchange mechanism need to comply with the requirements for passing the certification examination. In the new system, investor grievance mechanism shall provide for investor grievance handling mechanism to the extent they relate to disputes between brokers and their client in case of mutual funds. (Source: The Times of India)

A proposed amendment is to allow Muslim converts to file for divorce in the civil courts in Malaysia. Currently, the law was only applicable to non-Muslims. The amendment also aimed to make effective the annulment of a civil marriage to three months after the conversion of a spouse to Islam. The amendment also included giving the civil courts the power to decide on matters pertaining to the division of jointly acquired matrimonial property, alimony and child custody. (Source: Bernama.com)

The Law Commission wants to change the law in England and Wales for married and unmarried couples. Currently, the intestacy rules are complicated and depend on whether there are other close relatives surviving. The Law Commission proposes that if someone dies without a will and without children, the surviving spouse should take the whole estate even where there are surviving parents or siblings. Moreover, where cohabitants have children together or have been together for at least five years the proposals propose they should be treated in the same way as a surviving spouse. (Source: BBC)

HM Revenue & Customs has launched a new charter for dealing fairly with taxpayers. It sets out principles that HMRC should follow when dealing with individuals and what HMRC expects in return. HMRC promises to treat taxpayers "even-handedly and with respect" and to keep the cost of dealing with HMRC as low as possible. It also promises clear explanations of rules and the right to have mistakes corrected quickly, as well as affirming taxpayers' right to appeal against a tax assessment. (Source: STEP)

China has issued new guidelines on the determination of the "beneficial owner" during the application of double tax treaties. Any applicant who fails to substantiate that they are a beneficial owner will be denied treaty benefits. This circular can affect property for investment held by as offshore entity and potentially also businesses whose China subsidiary entities are also held in offshore tax havens. Under the circular, a "beneficial owner" is defined as a person who owns or controls income or the rights and assets deriving from income. (Source: China Briefing)

Governments of cash-strapped countries are on the hunt for new revenue sources. As a result the indirect taxes are increasingly imposing. In Europe the average indirect tax rates rose from 19.5 to 19.8 percent this year. In Latin America indirect tax rates also rose from 15.9 to 16.2 percent. The most widely used indirect tax is VAT. This consumption tax is paid in full by the consumer. The VAT rates are lowest in Asia, with an average of 10.8 percent in 2009, down slightly from 10.9 in 2008.

Indonesia has issued tax regulations to close a loophole. Under the new regulation, the tax office will require additional information in future from bondholders who are receiving interest from bonds structured through an SPV to determine whether they should be entitled to a withholding tax rate below the full rate of 20%. The information could prove to be difficult to provide as investors in bonds are unlikely to be registered and issuers are unaware of their identity. In that case, the benefit of a reduced withholding tax would probably be unachievable. (Source: Tax-News.com)

Hong Kong has tightened regulation of complicated investment products after investors were burned by Lehman Brothers-backed derivatives last year. Under the new regulations, banks must issue risk warnings for complex products and record conversations between their sales staff and clients to prevent deception. But lawmakers said the new measures fall short, and urged the government to prosecute banks that misled investors and to ban some risky products outright. (Source: Shanghai Daily)

Iceland's central bank would begin progressively lifting capital controls put in place a year ago. The bank has taken the first step in the sequenced removal of the capital controls by permitting inflows of foreign currency for new investments and potential outflows of foreign currency that may derive from such investments in the future. Investors are authorised, without restrictions, to convert into foreign currency the sales proceeds from assets in which they invest after November 1, 2009. (Source: AFP)

More investors are seeking a multi-family office (MFO) model of wealth management. MFOs manage business, finance and life for clients with a wealth adviser at the centre of a cadre of trusted advisers. The MFO model oversees cash, stocks and bonds, and also illiquid investments such as property, businesses and alternative investments like art or classic cars. MFOs increased clients by 8.6 per cent on average while large bank wirehouses hemorrhaged business, according to a 2008 Family Wealth Alliance survey. (Source: Alternate Asset Adviser)

Taiwan signed a MOU with China's mainland allowing banks, securities and insurance firms to conduct business in each other's market for the first time. Under the MOU, the supervisory agencies of the mainland and Taiwan can dispatch officials to audit and oversee operations of financial institutions on the other side's market. Taiwan and the mainland have also agreed to exchange financial data needed for the approval of acquisitions, mergers and other activities. (Source: Shanghai Daily)

The number of millionaires with personal holdings in excess of $1 million is expected to cross 450,000 by the end of the year in China, with assets under management hitting $1.73 trillion. However, wealth in China fell by 2.3 percent to $3.41 trillion last year. The country's millionaire households represented only about 0.1 percent of all households, but held nearly half of the total wealth. With the swelling personal wealth in China, the battle for high net worth clients between foreign and local banks has intensified. (Source: China Daily)

South Korea plans to allow the use of "poison pills" to help local companies fend off hostile takeovers. The clause would give shareholders the right to buy new shares quickly at a discount when they face an unsolicited takeover bid. South Korea has made hostile mergers and acquisition attacks easy by removing a mandatory public tender and a ceiling on foreign stock investments. Foreign investors own 32 per cent of South Korea's stock market, with two of the country's best-known companies, Samsung Electronics and Posco, respectively 47 and 49 per cent foreign-owned. (Source: Financial Times)

Banks and insurers are likely to be spared big asset writedowns in tough markets in future under an accounting rule change. European Union firms won't be able to apply it straight away as the European Commission won't consider endorsement until next year. Under the rule change, it will be easier for many banks and insurers, particularly those with big portfolios of listed bonds, to value assets at amortised cost, rather than at the going rate as under the old rule. (Source: Reuters)

India provided a special dispensation to help small and medium enterprises list. Companies with a paid-up capital of up to Rs 25 crore would be able to list on the SME platform. A minimum paid-up capital of Rs 10 crore would be needed for listing on the main boards of the National Stock Exchange and the Bombay Stock Exchange. Further, companies listed on the SME platform would be exempted from the eligibility norms for initial and follow-on public offers. The minimum initial public offer application and the minimum trading lot are fixed at Rs 1 lakh. (Source: Business Standard)

The revised UAE Company Law proposes to allow single ownership of limited liability companies (LLC). Currently, at least two people – usually foreign and local partners – are required to establish an LLC. The UAE has issued a law that will remove the required minimum share capital of Dh300, 000 in Dubai and Dh150, 000 in Abu Dhabi. Foreign ownership in LLC has been restricted to 49 per cent. Under the existing Companies Law, foreigners are required to set up companies under the sponsorship of an Emirati. (Source: Emirates Business 24-7)

【Chief Editors: Cynthia & Lillian 】

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