Collective Investment Scheme Transactions in ASEAN+3: Benchmark Product and Market Infrastructure Design
This report explores how the central securities depository and real-time gross settlement (CSD-RTGS) linkage model could be applied to collective investment scheme (CIS) passporting frameworks in Asia to enhance post-trade efficiency. In Asia, there are a number of multilateral CIS passporting frameworks, but little attention has been given to how delivery versus payment settlements can be facilitated under such frameworks. The report finds that the CSD-RTGS linkage model has considerable potential to be applied in Asia as a settlement engine for other cross-border financial instruments. It outlines how this can be achieved by interlinking the region’s CIS central platforms and delivery versus payment settlements infrastructure under the CSD-RTGS model.
Local Currency Collateral for Cross-Border Financial Transactions: Policy Recommendations from the Cross-Broder Settlement Infrastructure Forum
This report looks at how the use of local currency-denominated bonds for cross-border collateral transactions can be promoted in ASEAN+3 to develop regional bond markets. Active use of local currency-denominated bonds for cross-border collateral transactions can help by mitigating risks, reducing the credit costs of financial institutions, and expanding market liquidity. The report identifies the challenges faced by regional collateral markets and proposes seven policy recommendations for promoting the cross-border use of local currency bonds as collateral in the Association of Southeast Asian Nations plus the People’s Republic of China, Japan, and the Republic of Korea—known collectively as ASEAN+3.
Recent Technological Advances in Financial Market Infrastructure in ASEAN+3: Cross-Border Settlement Infrastructure Forum
This report identifies and examines six key technologies that are transforming fundamental financial market infrastructure and will serve as a springboard for the technological advancement of financial market infrastructure in the region. The report ascertains the most current status of technology adoption by Cross-Border Settlement Infrastructure Forum member organizations. They include central securities depositories and central banks in the Association of Southeast Asian Nations (ASEAN) plus the People’s Republic of China, Japan, and the Republic of Korea (collectively known as ASEAN+3) region.
Next Steps for ASEAN+3 Central Securities Depository and Real-Time Gross Settlement Linkages: A Progress Report of the Cross-Border Settlement Infrastructure Forum
This report provides an update on progress toward the establishment of a regional settlement intermediary to support investment and more integrated bond markets among ASEAN+3 economies. The proposed intermediary is to be based on bilateral links between national central securities depositories and central banks’ real-time gross settlement systems. This model can realize cross-border delivery versus payment settlement to enable safe and efficient cross-border financial transactions. The report also highlights emerging trends and challenges in cross-border financial transactions and sets out the next steps in establishing a regional settlement intermediary.
Common Understanding on International Standards and Gateways for Central Securities Depository and Real-Time Gross Settlement (CSD–RTGS) Linkages
This publication provides an overview of central securities depository and real-time gross settlement linkages in the ASEAN+3 region. It was prepared for the Cross-Border Settlement Infrastructure Forum (CSIF) to support its efforts to establish central securities depository and real-time gross settlement linkages. It aims to build a common understanding among CSIF members about international standards and gateways for these linkages, including user requirements and technical specifications. The publication reflects the collaborative efforts currently underway to further harmonize and integrate bond markets among the ASEAN+3 economies.
Common Understanding on Cross-Border Business Continuity Planning and Cybersecurity
The Cross-Border Settlement Infrastructure Forum (CSIF), a forum under Task Force 4 of the Asian Bond Markets Initiative published the Common Understanding on Cross-Border Business Continuity Planning (BCP) and Cybersecurity during the 21st ASEAN+31Finance Ministers and Central Bank Governors meeting in Manila, the Philippines. The objective of the publication is to create basic common understandings among CSIF members. The finance ministers and central bank governors were pleased with the publication and noted that the issues of BCP and cybersecurity are essential for creating safe linkages among Central Securities Depository–Real Time Gross Settlement (CSD-RTGS) systems to ensure the resilience of increasingly interconnected financial systems.
Progress Report on Establishing a Regional Settlement Intermediary and Next Steps: Implementing Central Securities Depository–Real-Time Gross Settlement Linkages in ASEAN+3
The progress report is an important step for the establishment of Central Securities Depository–Real-Time Gross Settlement (CSD–RTGS) Linkages as a regional settlement intermediary in the region. Developed by the Cross-Border Settlement Infrastructure Forum (CSIF), composed of the central banks and central securities depositories in the Association of Southeast Asian Nations (ASEAN) and the People’s Republic of China, Japan, and the Republic of Korea—collectively known as ASEAN+3—the report shows the desktop study results between the Bank of Japan and the Hong Kong Monetary Authority aiming to create a common model for the linkages. The report also sets out the implementation road map for the establishment of CSD–RTGS Linkages. As secretariat of the CSIF, the Asian Development Bank supports this initiative.
Basic Principles on Establishing a Regional Settlement Intermediary and Next Steps Forward: Cross-Border Settlement Infrastructure Forum
This report summarizes the discussions among ASEAN+3 central bank and central securities depository officers at the Cross-border Settlement Infrastructure Forum held in Delhi in May 2013. The ASEAN+3 finance ministers and central bank governors endorsed the establishment of the CSIF under the Asian Bond Markets Initiative to facilitate discussions on the improvement of cross-border bond and cash settlement infrastructures in the region, including the possibility of establishing a regional settlement intermediary. This report shows the three regional settlement intermediary models analyzed by the CSIF members and suggests the next steps moving forward.
Asian Bond Markets Initiative Group of Experts (GoE) Report for Task Force 4
The Group of Experts on Cross-border Bond Transactions and Settlement Issues (GoE) was established in 2008 by the Asian Bond Markets Initiative (ABMI). This report put forward for consideration three options for a regional settlement intermediary (RSI) and suggested organizing a group of market experts for further investigation of these options. The final results of the GoE work are presented in this report. PART I contains the result of the estimation of cross-border transaction costs in ASEAN+3. PART II discusses the results of the feasibility study of the RSI options and presents recommendations for the next step. Finally, PART III presents the list of major barriers to cross-border bond transactions and settlement and a set of recommendations to address them. Although the three parts are interrelated, each covers a topic independent enough to be discussed separately. Thus, each part carries its own introduction and summary. Also policy recommendations are formulated separately for the RSI and the barrier study and contained in PART II and PART III.
General Principles for participation of non-ASEAN+3 country in ASEAN+3 Bond Market Forum
ASEAN+3 agreed on accepting interested non-ASEAN+3 countries in ASEAN+3 Bond Market Forum (ABMF) as part of the Asian Bond Markets Initiative (ABMI). ABMF is a forum participated by both policymakers and market participants to identify impediments to market development and integration and address them together. To guide and govern the acceptance process, ASEAN+3 developed these General Principles. Interested non-ASEAN+3 countries can send a Letter of Interest to Co-chairs of ABMI Task Force 3, Ministry of Finance of Japan, Ministry of Finance of Malaysia, and the Securities Commission of Malaysia, in accordance with the General Principles.
Promoting Green Local Currency Bonds for Infrastructure Development in ASEAN+3
The Asian Development Bank and the Association of Southeast Asian Nations and the People’s Republic of China, Japan, and the Republic of Korea (ASEAN+3) are looking to explore options to promote green local currency-denominated bonds to meet the region’s infrastructure development needs. Green bonds—supported within the ASEAN+3 framework—would help meet the long-term financing of the region especially in its transition to a low-carbon region. This publication highlights an assessment study of green bond markets in ASEAN+3, identifies the barriers to green bond market development, and proposes recommendations to scale up green bond markets for infrastructure development in ASEAN+3.
Good Practices in Developing Bond Market: with a focus on government bond market
ASEAN+3 and Asian Development Bank (ADB) together issued a paper, "Good Practices in Developing Bond Market," which discusses key building blocks of bond markets, particularly government bond markets, and successful efforts of selected countries in developing them.
ABMI: Policy Maker Achievements and Challenges
This paper presents a comprehensive review of what ASEAN+3 policy makers have achieved under the Asian Bond Markets Initiative (ABMI) and what they are planning to do next over the medium-term. It also provides recommendations for policy makers’ consideration in addressing new sources of market volatility and other challenges within and outside the framework of ABMI.
Facilitating Foreign Exchange Risk Management for Bond Investments in ASEAN+3
Bond investors typically have a long position in local currency bond markets. To manage their foreign exchange (FX) risk, they may want to hedge that exposure for a period of time. They also want to be sure they can easily convert the local currency to dollars upon the sale of a bond. This study reviews the FX and FX hedging markets in ASEAN+3 as they relate to cross-border investments in local currency bonds, and makes recommendations to facilitate the development of the markets and FX risk management.
Local Currency Bonds and Infrastructure Finance in ASEAN+3
The need for infrastructure investment among ASEAN+3 members is well documented, with estimates for needed investment through 2020 reaching as high as US$550 billion. Local currency financing of infrastructure projects has the important advantage of avoiding the currency risk that can arise when a project generating revenues in the domestic currency has foreign currency-denominated debt service requirements. This study was undertaken under ABMI and funded by the Government of the PRC. It addresses two key questions: (i) Why is local currency bond financing not more widely used for infrastructure projects in ASEAN+3? and (ii) What can be done to promote infrastructure bond financing?
Broadening the Investor Base for LCY Bonds
Since the launch of Asian Bond Markets Initiative (ABMI), local currency bond markets in the region have grown rapidly in recent decades in terms of size and diversity of issuers. This study was undertaken under ABMI and funded by the Government of Japan. It focuses on measures to expand the investor base for local currency bonds in ASEAN, the PRC, and the Republic of Korea, with the goal of generating greater variety in investment objectives and a wider range of investment strategies.