ASIA-PACIFIC FINANCIAL FORUM

1. ASIA-PACIFICFINANCIAL FORUM Capital Markets (Information) Workstream Forging Deep, Liquid and Integrated Capital Markets July 7, 2014

2. Capital Markets (Information) sub-workstream • Objective:to examine and identify the strengths and areas for improvement of information for investors in Asian debt markets, especially those for non-bank corporate debt. • Deliverables: templates that can be used for self-assessments by the official sector to analyze gaps in information disclosures, develop action plans to address identified gaps, and foster private-public dialogue. • Steering Committee (current list):Moody’s (sherpa), ADB, HSBC, Nomura, Standard Chartered, Clifford Chance, Nishimura & Asahi, PwC, Ernst & Young, Deloitte, University of Hawaii, CFA Institute, CLP Holdings, ASIFMA (observer)

3. Sub-group Reporting Protocol Chair: Michael Taylor, Moody’s Chair: Bernard Ng, Asian Development Bank Chair: Professor Charles Booth, University of Hawaii Chair: Stephen Taylor and Candy Fong, Deloitte’s

4. Sub-Group Commonalities • All groups have adopted a self-assessment template approach. • Templates will summarize the views of investors and other market participants of the information they need to invest with confidence in an economy’s debt markets. • Economies will be able to use the templates to conduct a self-assessment which might either be published or otherwise used in discussions with investors. • Different levels of market development will be taken into account in the templates by adopting the “comply or explain” principle. • Templates will incentivize economies to enhance, over time, the information they make available to investors about their debt markets. • ASEAN countries previously agreed upon a corporate governance scorecard, showing that countries in the region are open to this type of approach.

5. Disclosure Sub-group • Chair: Deloitte • Agreed Objective: Creation of a template of desired information for economies to evaluate the disclosures that they currently require. In some cases there may be gaps in available information, while in others, information may be being required which is of limited importance to investors. • Phase 1: Comparative analysis among countries in South East Asia (will use Deloitte’s existing analysis as the starting point). This is currently in progress. • Phase 2: Possible questionnaire to selected market participants to benchmark existing disclosure requirements against their expectations. WG will consider whether Phase 2 is needed and how Phase 2 can be conducted at the later stage of the project.

6. Bond Market Data Sub-group • Chair: Asian Development Bank • Agreed Objective: Creation of a bond market data template to benchmark market participants’ expectations concerning key statistics on bond markets against available data. • Scorecard draws on ADB’s experience in establishing Asia Bonds Online, and its identification of data gaps in particular. • The ADB has submitted a matrix of available information and the template is in an advanced stage of development. • The intention is to encourage economies to conduct self-assessments that could be published or otherwise used in discussions with investors.

7. Investor Rights in Insolvency Sub-group • Chair: University of Hawaii • Agreed Objective: Develop a template to provide a benchmark incorporating investors’ views of the information they need about their rights in insolvency to participate with confidence in a country’s debt markets. • Several issues under consideration: • Contract enforcement and dispute resolution • This section of the template has been fully built out and includes: opportunity to be heard in court, speed of process, availability of real property ownership and supporting mechanisms, availability of collateral and its enforcement, provisions for security transactions, effective registration systems for assets and mechanisms for creditor and debtor self-assistance • Rights of creditors • Coverage of established insolvency law • Timing of cases

8. Timeline - Deliverables • Roundtables with institutional investors and regulators to incorporate opinions into to templates • Steering Committee issues final templates with observations and recommendations • Steering committee approved individual templates submitted and developed by sub-groups • Sub-groups submit final templates to Steering Committee for approval • How-to guides issued for policy makers to best use templates • Steering Committee agreed consolidated work plan and outline • Update at Seattle meeting

9. Action Items • The sub-groups will hold roundtables on the draft templates to receive feedback from both the institutional investor community and securities regulators in the second half of this year. • The templates will be amended following feedback from the roundtables. • During the fourth quarter of this year, the sub-groups will submit their final reports including the proposed templates to the Steering Committee for review. • The committee intends to issue its final consolidated report with observations and recommendations to the APFF in the first quarter of 2015.

10. Deliverables • Finalized templates covering disclosures, bond market data and investor rights in insolvency will be available by H2 2015. • In the course of H2 2015 a series of workshops will be held with official sector participants to provide guidance on using the templates to analyze gaps, develop action plans, and foster private-public dialogue. • Based on the output of these workshops, the sub-groups will then develop “how-to” guides for public policy officials on using the templates as tools with which to conduct self-assessments and to develop action plans to address information gaps.

11. THANK YOU Questions and Answers For further information contact Michael Taylor and Eleni Himaras at Moody’s in Hong Kong at eleni.himaras@moodys.com or +852 3551 3216