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2 Australian insurers scrap merger plans; Westpac may shut funds management unit

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2 Australian insurers scrap merger plans; Westpac may shut funds management unit

GREATER CHINA

* U.S.-based Morgan Stanley is seeking a bigger presence in China as it plans to raise its stake in local securities joint venture Morgan Stanley Huaxin to 51% from 49%, and ultimately to 100%, Xinhua News Agency reported, citing Chairman and CEO James Gorman. The investment bank's plan follows a rule revision that allowed overseas companies to hold a majority stake in a domestic securities firm.

* China has capped the daily limit on how much individual investors can redeem from a single money-market fund at 10,000 yuan, effective immediately, Reuters reported, citing a joint statement from the China Securities Regulatory Commission and the People's Bank of China. However, there is no daily limit set on overnight redemptions. In addition, authorities banned unlicensed institutions from marketing money-market funds through the internet, as well as "discriminative, exclusive, and bundled" sales.

* The People's Bank of China will add more types of securities as collateral for its medium-term lending facility, or MLF, including green loans and corporate bonds issued by small enterprises, as well as green finance bonds that rated at least AA, Xinhua News Agency reported, citing a statement. The central bank previously accepted treasury bonds, central bank bills, local government bonds and corporate credit debt rated at AAA, among other things, as collateral during the MLF operations.

* The China Banking and Insurance Regulatory Commission ruled that the banking industry should set up a joint credit mechanism for enterprises that have financing balances in more than three banking institutions, as well as a total financing balance of more than 5 billion yuan, cailiangpress.com reported.

* Hong Kong's Securities and Futures Commission and Germany's financial regulator Bafin signed a memorandum of understanding, which provides for consultation, cooperation and information exchange relating to the supervision of cross-border regulated entities in both jurisdictions. The agreement took effect May 9.

JAPAN AND KOREA

* Japan-based Nomura Holdings Inc. received a securities trading license from German financial regulator Bafin for its post-Brexit EU base in Frankfurt, called Nomura Financial Products Europe GmbH. Sources told Bloomberg News in June 2017 that Nomura plans to transfer fewer than 100 employees from London to the new base.

* Japan's Financial Services Agency is considering issuing an order to Shimane Bank Ltd. to improve its business operations and modify its earning structure after the company reported net losses for two consecutive periods, Tokyo's The Nikkei reported. The regulator had issued a similar order to Fukushima Bank Ltd. regarding the sustainability of its business model, the publication separately reported.

* Japan-based SBI Holdings Inc. will enter into the cryptocurrency exchange business, beginning June 4, The Nikkei reported. The company will aim to offer the lowest fees in the industry.

* Japan's Suruga Bank Ltd. is expected to make a significant downward revision on its expected net profit for the fiscal year ended March as it prepares to allocate about ?10 billion to cover lending loss, The Nikkei reported. The Japanese bank is facing additional lending loss in relation to alleged manipulation of apartment loan applications and failed investments into a shared housing loan scheme.

* The South Korean government proposed a bill to tighten reporting rules on certain financial transactions, as part of efforts to better uncover financial crime and money laundering activities, Yonhap News Agency reported, citing a statement from the country's Financial Services Commission. The regulator said the tightened reporting rules will affect local public enterprises and other government-affiliated institutions. In addition, the proposed bill will change the definition of a one-off financial transaction to a transaction conducted by a customer with no business relationship with a financial service provider.

ASEAN

* Officials from Indonesia-based PT Bank Mandiri (Persero) Tbk held talks with the Philippines' Department of Finance and the Bangko Sentral ng Pilipinas on the possibility of setting up a bank branch in Manila, BusinessWorld reported, citing an unnamed senior official. A formal application, however, has not yet been filed with the central bank, the report said. If the plan pushes through, Bank Mandiri would become the first Indonesian lender to have operations in the Philippines.

* Bank Indonesia Governor Perry Warjiyo said the central bank would continue working closely with government institutions to maintain the country's macroeconomic stability and promote growth after S&P Global Ratings affirmed the country's long- and short-term sovereign credit ratings at BBB-/A-3, The Jakarta Post reported. The rating agency's outlook on the country is stable.

* Thailand-based Krung Thai Bank PCL beefed up safety measures for its ATMs across the country after a customer suffered an electric shock when using an ATM at the Chakangrao branch in Kamphaeng Phet province, the country's Manager Daily reported.

* Vietnam Technological and Commercial Joint Stock Bank, or Techcombank, is targeting an expansion in its retail banking operations after raising about US$922 million in its IPO, Reuters reported, citing senior executives. CEO Nguyen Le Quoc Anh said the bank expects retail lending to increase to 50% of its total loans over the next two to three years from the current 40%.

* Prudential Vietnam Assurance Pvt. Ltd. secured approval from the country's Ministry of Finance to raise its charter capital to 4.128 trillion dong, which will allow the company to enhance its products and services and expand its reach across the country, Viet Nam News reported.

SOUTH ASIA

* Nine Indian public sector banks under prompt corrective action submitted a two-year recovery plan to the government, which includes divestment of stakes in units and reduction of corporate loan book, Press Trust of India reported, citing an unidentified official. The lenders include Allahabad Bank, Bank of India and Central Bank of India.

* The Insurance Regulatory and Development Authority of India called on local insurers to create a long-term motor third-party insurance policy for two-wheelers and cars, in a bid to ramp up the number of vehicles with the mandatory cover, The Hindu reported. Insurers are urged to design a five-year policy for two-wheelers, with cars having a three-year cover, the report said.

* India's Punjab National Bank is looking to raise 130 billion rupees through a sale of stakes in its units, as wells as through recovery of bad loans, by the end of September, Press Trust of India reported, citing an unnamed official. The state-run lender's plans include divesting its stake in PNB Housing Finance Ltd., in which it holds 39.08%.

* Rajnish Kumar, chairman of State Bank of India, said the lender plans to alter its rules for startup investments in order to use the 500 million rupees allocated for financial technology startups, Press Trust of India reported. Investments in startups are generally considered as very risky, Kumar said, but added that the traditional way of investing will not work.

AUSTRALIA AND NEW ZEALAND

* Australian health insurers HBF Health Funds Inc. and The Hospitals Contribution Fund of Australia Ltd, or HCF, scrapped their planned merger of equals, which could have created a A$4 billion entity with a market share of 18.4%. The two parties have agreed that it would not be in the best interests of their respective members for the deal to push through. The proposed merger was announced in February.

* Australia's Westpac Banking Corp. plans to shut down its funds management unit, Ascalon Capital Managers Ltd., after failing to find a buyer for the business, The Australian reported, citing anonymous sources. Ascalon Capital Managers has been on and off the market for approximately 18 months, with Generation Development Group Ltd. being one of its potential buyers.

* Whistleblowers have revealed that Westpac Banking unit BT Financial Group Pty Ltd. discovered that the files of hundreds of clients it was supposedly providing with financial advice were missing while digitizing its hard copy records in 2013, The Guardian reported. An unnamed source said about 10,000 customer files were missing, although 8,000 were later found in branches across the country. A spokeswoman for BT Financial disputed the figures, saying only 215 client files were detected missing.

* U.S.-based JPMorgan Chase & Co. is said to have been granted immunity from criminal proceedings over alleged cartel conduct in relation to a 2015 share placement for client Australia & New Zealand Banking Group Ltd., The Australian reported. The immunity reportedly came after the investment bank offered to fully disclose events surrounding ANZ's share issuance. ANZ and two other underwriters, Deutsche Bank AG and Citigroup Inc., are expected to face criminal charges.

Janna Estares, Sally Wang, Sarun Saelee, Cathy Hwang, Emi White and Aditya Suharmoko contributed to this report.

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This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings.