X

Limited power was well used. Faced with a severe resource constraint.

Principle 11 - Authority to share information. The regulator should have the authority to share both public and non‑public information with domestic and foreign counterparts.

X

Principle 12 - Information sharing mechanisms. Regulators should establish information sharing mechanisms that set out when and how they will share both public and non-public information with their domestic and foreign counterparts.

X

No specific MOU or other agreement / procedure has been established.

Principle 13 - Assistance to foreign regulators. The regulatory system should allow for assistance to be provided to foreign regulators who need to make inquiries in the discharge of their functions and the exercise of their powers.

X

Lack of legal immunity of NSCG staff in handling sensitive information in good faith.

Principle 14 - Full, timely and accurate disclosure. There should be full, timely and accurate disclosure of financial results and other information that is material to investors’ decisions.

X

Sound rule but compliance needed (due to the lack of enforcement power of NSCG over Reporting Companies?)

Principle 15 - Fair and equitable treatment of securities holders. Holders of securities in a company should be treated in a fair and equitable manner.

X

Compliance needed. (Private rights of action including class action are not established while the NSCG’s enforcement power over Reporting Companies is limited.)

Principle 16 - Accounting standards. Accounting and auditing standards should be of a high and internationally acceptable quality.

X

IAS recognized but not fully adopted in practice.

Principle 17 - Eligibility standards. The regulatory system should set standards for the eligibility and the regulation of those who wish to market or operate a collective investment scheme.

X

No law, no CISs.

Principle 18 - Legal form and structure. The regulatory system should provide for rules governing the legal form and structure of collective investment schemes and the segregation and protection of client assets.

X

No law, no CISs.

Principle 19 - Disclosure for suitability and valuation. The regulations should require disclosure, as set forth under the principles for issuers, which is necessary to evaluate the suitability of a collective investment scheme for a particular investor and the value of the investor’s interest in the scheme.

X

No law, no CISs.

Principle 20 - Basis for valuation and pricing for redemption. The regulations should ensure that there is a proper and disclosed basis for asset valuation and the pricing and the redemption of units in a collective investment scheme.

X

No law, no CISs.

Principle 21 - Entry standards. The regulations should provide for minimum entry standards for market intermediaries.

X

Principle 22 - Initial and on-going prudential requirements. There should be initial and ongoing capital and other prudential requirements for market intermediaries that reflect the risks that the intermediaries undertake.

X

Monthly capital. adequacy report not audited. NSCG does not have power to reject an auditor.

Principle 23 - Internal organization and operational conduct and risk management. Market intermediaries should be required to comply with standards for internal organization and operational conduct that aim to protect the interests of clients, ensure proper management of risk, and under which management of the intermediary accepts primary responsibility for these matters.

X

No specific requirement of compliance officer / dept. with specific responsibilities.

Principle 24 - Procedures for failure. There should be procedures for dealing with the failure of a market intermediary in order to minimize damage and loss to investors and to contain systemic risk.

X

No procedures to manage winding down of a failed broker although other investor protection legislation, and regulations have been prepared.

Principle 25 - Authorization and oversight of exchanges. The establishment of trading systems including securities exchanges should be subject to regulatory authorization and oversight.

X

Principle 26 - On-going supervision of exchanges and trading systems. There should be ongoing regulatory supervision of exchanges and trading systems which should aim to ensure that the integrity of trading is maintained through fair and equitable rules that strike an appropriate balance between the demands of different market participants.

X

·   NSCG has no real time access to trading information, no real time oversight.

·   SML does not expressly require fair trading rules for different members.

Principle 27 - Trading transparency. The regulations should promote transparency of trading.

X

SML does not expressly require real time transparency of pre-trade information for direct market participants.

Principle 28 - Detection and deterrence of unfair trading practices. The regulations should be designed to detect and deter manipulation and other unfair trading practices.

X

No requirement of market surveillance / stock watch system to detect abnormal movements.

Principle 29 - Management of exposures, default risk and market disruption. The regulations should aim to ensure the proper management of large exposures, default risk and market disruption.

X

Principle30 - Oversight of clearance and settlement systems and management of systemic risks. Systems for clearing and settlement of securities transactions should be subject to regulatory oversight, and designed to ensure that they are fair, effective and efficient and that they reduce systemic risk.

X

·   The GCSD needs to comply with the requirement of ownership structure.

·  The legal requirement for efficiency in settlement arrangements could be stated more explicitly.