Asia-Pacific Payment Regulation: What group CFOs and Treasurers Need to Know?

Payment regulation in the Asia-Pacific region is often designed to make institutions and markets resilient to stress, or simply to protect local currencies, and poses a particular challenge. The uptick in regulatory measures around payments and treasury management, across a range of Asia-Pacific jurisdictions is unprecedented, but the regulation landscape is as diverse as the countries.
While Singapore, Hong Kong, Japan and South Korea benefit from relatively stable environments, others have seen a surge in activity, specifically South-east Asian countries and China.
Indonesian regulatory restrictions make cash pooling quite challenging. The IDR can be freely converted to any foreign currency but FX transactions by resident entities above USD25,000 must be supported by an underlying document in addition to the statement letter required for lower amounts. Outgoing transfers in foreign currency over USD 100,000, not involving exchange, also require supporting documents.
December 2016 rules say exporters can only retain up to 25% of export proceeds (goods only, not services) in foreign currency, and remainder proceeds must be converted into MYR. 100% of Services exports can be retained in foreign currency
In China, changes are frequent and can be unpredictable, with a recent raft of regulation by the People’s Bank of China (PBOC) and State Administration of Foreign Exchange (SAFE). The first window guidance on cross-border RMB pooling came in January 2016 after measures such as inflow/outflow cross-border pooling ratios had been in place.

Source: BNP Paribas Analysis, 2017