Financial Regulation


Recent development

On July 21, 2016, the Turkish Capital Markets Board (the “CMB”) decided to remove the limits under the Communiqué on Share Buy-backs (the “Communiqué”) that are applicable to public companies’ acquisition of their own shares. This measure is part of the CMB’s efforts to minimize and mitigate the negative effects on the shares traded in the Borsa Istanbul (“BIST”) by the attempted coup that took place on July 15, 2016. The decision seeks to stabilize the prices of the shares traded on the BIST, preventing any artificial decrease as a result of the coup attempt.

New restricted stock

On April 28, 2016, Japan’s Ministry of Economy, Trade and Industry (METI) published a Guidebook for Introducing New Stock Compensation (restricted stock) as Board Members’ Compensation to Encourage Companies to Promote Proactive Business Management.

Restricted stock is a type of incentive compensation to executives in the form of stock, which they are prohibited from disposing of for a certain period of time.

Amendments to Japanese tax laws effective April 1, 2016 made the issuance of restricted stock to executives permissible where:

  1. The issuing corporation can claim the compensation as a deductible expense; and
  2. It is a taxable event to executives when they are able to dispose the shares of the stock.

In light of a landmark energy reform that overhauled Mexico’s energy sector, the National Pension System Commission (CONSAR) has consistently amended its regulations, including the sole financial guidelines, in an effort to increase investments carried out by Mexican pension funds (AFORES or Administradoras de Fondos de Ahorro para el Retiro) in other asset classes, such as CERPIs.

CERPIs are certificates offered through the Mexican Stock Exchange by means of a Mexican issuing trust to finance or invest in certain projects in Mexico.  These are a new breed of asset class created as an alternative to the existing certificates for capital development or CKDs. Only institutional and qualified investors under Mexican law can purchase CERPIs.

Issuers and their respective advisors can now no longer rely on a disclaimer for liability which is customarily included as part of any teaser document or information memorandum (IM) that is distributed in Malaysia to solicit interest of potential investors to invest in an auction sale of any equity or debt instrument. With effect from 15 September 2016, Section 256, read together with section 92A, of the Malaysian Capital Markets and Services Act 2007 now provides that any provision in a “document, agreement or contract” that excludes the liability of any person who provides information to another who is investing in a capital market product will be void.