Investor Participation
The links below provide directories of professional service providers.
Investor Protection
Bondholder Rights
In general, statutory laws governing bondholder rights are covered under insolvency codes. Bond documents (e.g., prospectus, term sheets, subscription agreements) accompanying an issuance may also contain provisions, default, and cross-default clauses specific to the bond issue. These provisions provide additional protection to bondholders.
For specific laws and provisions governing bondholder rights for each market, please refer to the individual market home pages.
The Asia-Pacific Restructuring and Insolvency Guide 2006, which is linked below, provides information on creditor rights in the Asia-Pacific countries.
The Asian Institute of International Financial Law report entitled Property Rights, Collateral and Creditor Rights is also linked below. The report reviews the legal framework for creditor rights in some jurisdictions in the region. The rating for each market’s legal framework is shown in the table below.
The World Bank developed its Doing Business indicators to measure the effectiveness and enforcement of business regulations. In terms of bondholder rights, the World Bank’s Getting Credit indicator has a Legal Rights Index that measures the degree to which collateral and bankruptcy laws facilitate lending.
Prevention of Fraud
USD-Denominated Securities
Asian issued USD-denominated bonds registered for trading in the US market fall under the purview of the US Securities and Exchange Commission (SEC). To protect the public from fraud, US regulators analyze disclosures to determine whether the offering materials contain any untrue statements of material fact, or omit any material facts, that could make the disclosures misleading.
Local Currency Securities
The International Organization of Securities Commissions (IOSCO) formed a special Chairmen's Task Force in February 2004 in response to high profile incidents of securities fraud and market abuse. The task force’s focus included bond market transparency, the role of unregulated entities and complex group structures, appropriate sanctions, and regulatory incentives to improve risk identification.
IOSCO is also trying to allow securities regulators to conduct cross-border investigations of international securities fraud, via a memorandum of understanding on regulatory cooperation and information sharing.
A summary of cross-border investment regulations for each market in the region is provided in Table 11 of the Asia Bond Monitor published in November 2005. For more specific information on these regulations, please refer to the individual market home pages.
The paper and survey results on the Study on Impediments to Cross-border Bond Investments and Issuance in Asian Countries, which was prepared for discussion at the Working Group 3 of the Asian Bond Markets Initiative (ABMI), is linked below.
Cross-border Investment Regulation table
For more specific information on local currency controls, please refer to market home pages.