The Banking Regulation Review The Banking …...ADNAN SUNDRA & LOW ADVOKATFIRMAET BA-HR DA...
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The Banking Regulation Review Law Business Research Seventh Edition Editor Jan Putnis
Transcript of The Banking Regulation Review The Banking …...ADNAN SUNDRA & LOW ADVOKATFIRMAET BA-HR DA...
The Banking Regulation ReviewThe Banking Regulation
Review
Law Business Research
Seventh Edition
Editor
Jan Putnis
The Banking Regulation Review
The Banking Regulation ReviewReproduced with permission from Law Business Research Ltd.
This article was first published in The Banking Regulation Review, 7th edition(published in May 2016 – editor Jan Putnis).
For further information please [email protected]
The Banking Regulation
Review
Seventh Edition
EditorJan Putnis
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Acknowledgements
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Editor’s Preface ..................................................................................................viiJan Putnis
Chapter 1 INTERNATIONAL INITIATIVES ......................................... 1Jan Putnis and Kristina Locmele
Chapter 2 ARGENTINA .......................................................................... 27Santiago Carregal and Diego A Chighizola
Chapter 3 AUSTRALIA ............................................................................ 40Hanh Chau, Adam D’Andreti, Peter Feros, Paula Gilardoni, Deborah Johns, Louise McCoach, Duncan McGrath and Peter Reeves
Chapter 4 BARBADOS ............................................................................ 60Sir Trevor Carmichael QC
Chapter 5 BELGIUM ............................................................................... 69Anne Fontaine and Pierre De Pauw
Chapter 6 BRAZIL ................................................................................... 83Tiago A D Themudo Lessa, Rafael José Lopes Gaspar and Gustavo Ferrari Chauffaille
Chapter 7 CAMBODIA ........................................................................... 94Bun Youdy
Chapter 8 CANADA .............................................................................. 111Scott Hyman, Carol Pennycook, Derek Vesey and Nicholas Williams
Chapter 9 COLOMBIA.......................................................................... 127Luis Humberto Ustáriz González
CONTENTS
iv
Contents
Chapter 10 DENMARK ........................................................................... 142Morten Nybom Bethe
Chapter 11 EUROPEAN UNION ........................................................... 152Jan Putnis, Timothy Fosh and Helen McGrath
Chapter 12 FINLAND ............................................................................. 177Janne Lauha and Hannu Huotilainen
Chapter 13 FRANCE ............................................................................... 188Olivier Saba, Samuel Pariente, Mathieu Françon, Jessica Chartier and Béna Mara
Chapter 14 GERMANY ........................................................................... 209Thomas Paul, Sven H Schneider and Jan L Steffen
Chapter 15 HONG KONG ..................................................................... 222Peter Lake
Chapter 16 HUNGARY ........................................................................... 239Péter Köves and Szabolcs Mestyán
Chapter 17 INDIA ................................................................................... 247Cyril Shroff and Ipsita Dutta
Chapter 18 INDONESIA ......................................................................... 263Yanny M Suryaretina
Chapter 19 IRELAND.............................................................................. 286William Johnston, Robert Cain and Sarah Lee
Chapter 20 ITALY .................................................................................... 301Giuseppe Rumi and Andrea Savigliano
Chapter 21 JAPAN ................................................................................... 316Hirohito Akagami and Wataru Ishii
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Contents
Chapter 22 LATVIA ................................................................................. 326Armands Skudra
Chapter 23 LUXEMBOURG ................................................................... 336Josée Weydert, Jad Nader and Milos Vulevic
Chapter 24 MALAYSIA ............................................................................ 355Rodney Gerard D’Cruz
Chapter 25 MEXICO ............................................................................... 374Federico De Noriega Olea and Juan Carlos Galicia Orozco
Chapter 26 NETHERLANDS ................................................................. 385Mariken van Loopik and Maurits ter Haar
Chapter 27 NEW ZEALAND .................................................................. 400Guy Lethbridge and Debbie Booth
Chapter 28 NORWAY .............................................................................. 414Terje Sommer, Richard Sjøqvist, Markus Nilssen and Steffen Rogstad
Chapter 29 PANAMA ............................................................................... 426Mario Adolfo Rognoni
Chapter 30 PHILIPPINES ....................................................................... 437Rafael A Morales
Chapter 31 POLAND .............................................................................. 452Tomasz Gizbert-Studnicki, Tomasz Spyra and Michał Torończak
Chapter 32 PORTUGAL .......................................................................... 471Pedro Ferreira Malaquias and Hélder Frias
Chapter 33 SINGAPORE ........................................................................ 484Francis Mok and Wong Sook Ping
Contents
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Chapter 34 SLOVENIA............................................................................ 495Simon Žgavec
Chapter 35 SOUTH AFRICA .................................................................. 514Ina Meiring
Chapter 36 SPAIN .................................................................................... 525Juan Carlos Machuca and Joaquín García-Cazorla
Chapter 37 SWEDEN .............................................................................. 545Fredrik Wilkens and Helena Håkansson
Chapter 38 SWITZERLAND .................................................................. 554Shelby R du Pasquier, Patrick Hünerwadel, Marcel Tranchet, Maria Chiriaeva and Valérie Menoud
Chapter 39 UNITED ARAB EMIRATES ................................................ 575Amjad Ali Khan and Stuart Walker
Chapter 40 UNITED KINGDOM .......................................................... 584Jan Putnis, Nick Bonsall and Edward Burrows
Chapter 41 UNITED STATES ................................................................ 607Luigi L De Ghenghi
Appendix 1 ABOUT THE AUTHORS ...................................................... 659
Appendix 2 CONTRIBUTING LAW FIRMS’ CONTACT DETAILS ....... 683
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EDITOR’S PREFACE
Nearly eight years after the collapse of Lehman Brothers it might have been expected that fundamental questions about the business models, governance and territorial scope of large banks would have been answered clearly, but that is not yet truly the case. Debates rage on in many countries about ‘too big to fail’, management accountability in banks, resolution planning and conduct issues in the banking sector. What is the ‘safest’ form of international banking and what might shareholders in banks reasonably expect as a long-term rate of return on their investment? When is all this uncertainty going to end? Perhaps it never will for so long as large banks remain as important to the global economy as they are and the political classes throughout the world remain divided on whether this is a good thing. It is also worth remembering that the reform agenda that was born in the financial crisis of 2007–2009 established a very long implementation period – to 2019 and beyond – for many of the regulatory changes agreed upon by the G20 and the Basel Committee. So we are still in the midst of what will no doubt be seen in decades to come as the ‘post-crisis’ period in banking regulation.
Looking forward then, what can we see beyond the implementation of the post-crisis reforms? That depends, of course, in part on whether there is another cross-border banking crisis. It is worth noting in this context that localised banking failures remain commonplace, and with more countries around the world introducing specialised bank resolution regimes there will be further opportunities to test the uses and pitfalls of bail-in and other resolution powers.
The continuing debate about the impact of technology on banks has increased significantly in volume in much of the world in the past year. Forecasts of the eventual eclipse of banks by technology firms seem wide of the mark in the short to medium term, although there is clearly an ‘adapt or die’ threat to many banks in the longer term. One adaptation of sorts that we may well see more of in the next few years is banks acquiring technology firms (or otherwise entering into strategic partnerships with them).
The most obvious benefits of new technology in the banking sector concern the customer interface and market infrastructure. However, some important but less immediately obvious ways in which technology will continue to revolutionise banking arise in the context of the safety and soundness of banks. For example, some banks are looking at how innovative
Editor’s Preface
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uses of technology can improve their risk management, and ultimately the credibility of their recovery and resolution plans through, for example, more precise classification and management of derivative positions and counterparty relationships.
Many of the largest cross-border regulatory investigations into past conduct in the banking sector have drawn to a close over the past year. While for some that signalled the close of a painful and costly chapter in the post-crisis development of the banking sector, it remains difficult to conclude that the threat of further such investigations has gone away.
As an English lawyer it would be odd if I did not mention the June 2016 referendum in the UK on membership of the European Union, parochial though that may seem to some readers outside Europe. The legal and regulatory regime that will apply to business that banks undertake in and from London is, however, of global interest, and the result of the referendum, and its aftermath, will therefore be of very considerable importance to all large banks and many smaller ones.
This seventh edition of The Banking Regulation Review contains chapters provided by authors in 39 countries and territories in March and April 2016, as well as chapters on International Initiatives and the European Union. My sincere thanks, as in previous years, go to the authors who have made time to contribute their chapters despite their heavy workload.
The team at Law Business Research have, once again, tolerated the hectic schedules and frequent absences on business of many of the authors, and I would like to thank them for doing so with such good humour and understanding. Thank you also to the partners and staff of Slaughter and May in London and Hong Kong for continuing to encourage projects such as this book, and in particular to Ben Kingsley, Peter Lake, Nick Bonsall, Edward Burrows, Tim Fosh, Kristina Locmele and Helen McGrath.
Jan PutnisSlaughter and MayLondonMay 2016
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Chapter 7
CAMBODIA
Bun Youdy1
I INTRODUCTION
The first privately owned commercial bank was established 20 years ago, shortly before the country transformed itself from a mono-banking system to a two-tier banking system, along with the conversion from planned economy to market economy. The National Bank of Cambodia (NBC) launched an important reform between 1998 and 2001, which consisted of:a an abolishment of the existing requirement of a 15 per cent NBC stake in all privately
owned banks;b a classification of the banking and financial institutions into three categories, namely
commercial banks, specialised banks and microfinance institutions; andc an increase of the minimum capital of commercial banks from US$5 million to
US$12.5 million, which resulted in numerous banks being forced into liquidation.
Even though the Cambodian banking system is still generally considered to be in its development phase, foreign banks continue to express great interest in the sector, taking into account the country’s continuous economic growth and the entry of new investors in this emerging market located in one of the world’s fastest-growing regions. In addition, the existing legal framework offers notable incentives to which foreign investors might not be entitled in neighbouring countries, including no restriction on foreign ownership, no local joint venture requirement, liberalisation of interest rates, free repatriation of benefits, no exchange control and minimum currency risk due to its highly dollarised economy.
As of the end of 2015, there were 36 commercial banks, 11 specialised banks, eight representative offices of foreign banks, 58 microfinance institutions (including eight microfinance deposit-taking institutions), nine financial lease companies and five third-party
1 Bun Youdy is a partner at Bun & Associates.
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processors.2 The Rural Development Bank is the only state-owned specialised bank whose principle role is to service and refinance loans to licensed financial institutions, associations, development communities and small and medium-sized enterprises that take part in rural development in Cambodia.
The Cambodian banking system is still largely composed of cash-based transactions, although ATMs, payment and clearing systems and e-banking are being developed gradually thanks to the recent increase in financial literacy and improvements to the information technology infrastructure. Financial services offered by banking and financial institutions are often limited to conventional products, such as deposits and loans; however, a significant diversification has taken place with the introduction of other sophisticated products involving trade finance, payment facilities, foreign exchange, and financial leasing. Large loans are usually arranged through cross-border financing by the parent or affiliated company of foreign banks with participation from its locally incorporated subsidiary; however, it is rare to see syndicated loans jointly organised by different banks in the country.
II THE REGULATORY REGIME APPLICABLE TO BANKS
The banking activities in Cambodia are mainly governed by the Law on the Organisation and Functioning of the National Bank of Cambodia (the NBC Law) promulgated in 1996,3 the Law on Banking and Financial Institutions (the Banking Law) promulgated in 1999, the Law on Foreign Exchange promulgated in 1997, and the Law on Anti-Money Laundering and Combating the Financing of Terrorism (the AML Law) promulgated in 2007, as well as a number of implementing sub-decrees, regulations and circulars issued by the NBC. In comparison with other sectors, the legal framework governing the banking industry is the most comprehensive, with the NBC’s regular updates of existing laws and introduction of new regulations. Nonetheless, there is no specific regulation that governs cross-border loans provided by overseas financial institutions to non-banking and financial institutions. Close monitoring of cross-border loans to banking and financial institutions is overseen by the NBC, particularly when those loans are subordinated loans, which may increase the net worth of the banking and financial institutions.
The NBC performs the traditional role of a central bank and all banking activities are under its exclusive jurisdiction. Its main functions are to conduct monetary policy, act as the sole issuer of the national currency and as the supervisory authority of the banking and financial system, including the authority to grant operating licences to banking and financial institutions, as well as to oversee the payments system. The NBC has recently upgraded its supervision structure and is making good progress in achieving full compliance with the 25 Basel Core Principles. Despite the country’s considerable challenges in securing qualified human resources, the NBC has continued to improve the capacity building to cope with the increasing workload and complexity of the sector.
Even though under the existing regulations the NBC has the power to exercise consolidated supervision, the current practice demonstrates that sectoral supervision prevails instead. The Securities and Exchange Commission of Cambodia (SECC) oversees the securities market while the insurance sector is under the jurisdiction of the Financial Industry
2 See NBC Annual Report 2015, p. 25.3 Amended in 2006.
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Department of the Ministry of Economy and Finance (MEF). Cambodia has yet to adopt the universal banking system, whereby a banking institution intending to conduct additional related financial services, such as securities or insurance business, is required to operate under separate entities and be governed by different supervisory authorities. Together, the NBC, the MEF, and the SECC, are working on a framework aiming to move towards a joint or coordinated supervision, commencing with information sharing. A memorandum of understanding on establishing information sharing was signed with the MEF, the NBC and the SECC in July 2014.4 The banking system in Cambodia consists of commercial banks, specialised banks, microfinance institutions, financial lease companies, and third-party processors. Specialised banks operate in the same way as finance companies, since they are not allowed to collect deposits but are permitted to provide credit facilities. Microfinance institutions have generally been regarded as banking for the poor. Microfinance institutions are generally not permitted to accept deposits unless they have obtained a separate licence from the NBC, after fulfilling certain conditions including, inter alia, being in operation for at least three years.5 As of the end of 2015, the NBC has granted licences to eight microfinance institutions, authorising the collection of deposits.
Banks established in Cambodia must be either a locally incorporated entity or a branch of a foreign bank.6 Foreign banks may also establish representative or liaison offices whose activities are strictly limited to conducting market research purposes and gleaning information.7 In theory, the representative office has a lifespan of two years and may be renewed once only.
Every banking institution shall be incorporated as a public limited company and comply with minimum capital requirements. The NBC has recently raised the minimum capital requirement for commercial banks, including foreign bank branches whose parent bank is not rated as ‘Investment Grade’, from US$37.5 million to US$75 million, while the minimum capital requirement for a foreign bank branch whose parent bank is rated as ‘Investment Grade’ has been increased to US$50 million. Likewise, the minimum capital requirement for a specialised bank has increased from US$7.5 million to US$15 million. The NBC also requires any newly established microfinance institutions and existing microfinance institutions to have a minimum capital of US$1.5 million, which is much higher than the amount set by the previous regulation (US$62,500). Microfinance deposit-taking institutions are also subject to the new minimum capital requirement to increase their previous minimum capital from US$2.5 million to US$30 million.8 Existing banking and financial
4 See IMF Country Report No. 15/307, p. 10.5 Article 2 of the Regulation on Licensing of Microfinance Institutions Taking Deposits
Institution dated 13 December 2007.6 Article 12 of the Banking Law.7 Id., Article 13.8 Articles 3 to 7 of Regulation on Minimum Registered Capital of Banking and Financial
Institutions dated 22 March 2016.
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institutions have to comply with this new requirement within two years commencing from 22 March 2016.9 However, the minimum capital requirement for financial leasing companies remains the same at US$50,000.10
III PRUDENTIAL REGULATION
i Relationship with the prudential regulator
The NBC acts both as the regulatory and supervisory authority of the banking and financial sector in Cambodia. The NBC has gradually changed its supervisory approach by shifting from a compliance-based supervision to a risk-based and forward-looking supervision (deploying stress tests and simulations) in order to focus on certain specific high-risk areas such as credit risk, liquidity risk, market risk, and operational risk.11 The NBC also issued prudential regulations to strengthen good governance, policy compliance, customer protection and transparency, and the enhancement of financial education among all relevant parties. Thus, its supervisory work is carried out through both off-site examinations and on-site visits.
Banking institutions are required to comply with a series of disclosure obligations, namely periodical reports including daily, weekly, monthly, quarterly and annual reports, as well as internal control reports, reserve requirement reports and audited annual financial reports.12 In addition, the NBC also has the power to require covered entities to provide ad hoc reports whenever necessary. The NBC is developing its supervisory report template, which aims at harmonising the content of the reports and improving the capture of information. The report submission process is greatly improved as the filing can now be done online.
The transparency of banking and financial institutions is generally much more significant compared to companies operating in other financial sectors in Cambodia. Every bank is required to publish its annual audited financial report no later than 30 June of the following year and such report is available to the public.
ii Management of banks
The management of banking and financial institutions is organised pursuant to the Regulation on Corporate Governance of Banking and Financial Institutions dated 25 November 2008 (the Regulation on Corporate Governance), which also defines key good governance principles to be adhered to. Their usual structure consists of a board of directors (except foreign bank branches) and compulsory committees, namely audit and risk committees, as well as other specialised committees as needed or required by the NBC.13
9 Id., Article 8.10 Article 3 of the Regulation on Licensing of Financial Lease Companies dated
27 December 2011.11 See NBC Annual Report 2012, pp. 12–15.12 Article 1 of the Regulation on Reporting Date for Commercial Banks and Specialized Banks
dated 13 September 2006, Article 1 of the Regulation on Reporting Date for Microfinance Institutions dated 13 September 2006, and the NBC’s Notification on Date and Duration for Submission of Reports by Banking and Financial Institutions dated 22 March 2012.
13 Article 7 of the Regulation on Corporate Governance.
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The independent director is an important feature of the management of the banking and financial institutions. The board of directors of commercial banks shall be composed of at least two independent directors, while at least one-third of the total number of board members of specialised banks and microfinance institutions shall be independent director(s).14 The audit committee and compensation committee, if any, shall be each chaired by an independent director.15
The Regulation on Corporate Governance vaguely defines an independent director as a person capable of exercising judgement independent of the view of management, political interests or inappropriate outside interest.16 The NBC’s current interpretation of a non-independent director includes any person exercising any function within an affiliated entity of the company, including the overseas subsidiaries. An independent director of an overseas-affiliated entity of the company, however, is permitted to act as independent director of the relevant bank in Cambodia. Due to the limited availability of qualified people, an independent director is not required to be a resident or a Cambodian national.
The relevant regulation requires a strong autonomy of the board of directors and management of all locally incorporated banks, including foreign subsidiaries. All decision-making, including credit approval, shall be made locally. Such requirements have not been fully implemented by some foreign subsidiary banks, which have long depended on their headquarters due to the lack of adequate resources on the ground.
While a branch of foreign bank in Cambodia does not have a separate board of directors, it is still required to adopt good governance policies and procedures aimed at complying with the principles set forth in the Regulation on Corporate Governance, including the strength of local governance through the enhancement of management autonomy granted by foreign headquarters to local executives.17
All banking and financial institutions are required to have internal audit and compliance officers. In the case of outsourcing, permitted under the current regime, the internal audit cannot be performed by the same firm as the one in charge of the external audit.18 Any designation, dismissal, removal or resignation of the head of internal audit and compliance must be reported to the NBC.19
With respect to remuneration policies, the board of directors is allowed to determine the company compensation’s policies and practices as long as they are consistent with the institution’s corporate culture, long-term objectives and strategy, and control environment.20 In other words, there is no specific restriction on the remuneration’s package, except that the NBC has the authority to recommend institutions to review their decisions considered not aligned with the above-mentioned principles; the NBC’s current focus is on the financial situation of each institution.
14 Id., Article 6.15 Id., Articles 8 and 19.16 Article 6 of the Regulation on Licensing of Microfinance Institutions dated 10 January 2000.17 Id.18 Article 7 of the Regulation on Internal Control of Banking and Financial Institutions dated
18 September 2010.19 Id., Article 8.20 Article 18 of the Regulation on Corporate Governance.
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iii Regulatory capital and liquidity
The NBC recognises the importance of adhering to international banking supervision standards, and is working to harmonise its standards and regulations in accordance with the Basel Accords. Cambodian regulatory capital standards are not fully in compliance with Basel II, but the current standards are seen as a mixture of elements found in Basel I, Basel II and Basel III. The compliance process is progressing from a banking supervision technical standpoint but there are still a number of new regulations to be introduced. The process is time-consuming as the full implementation of the new standards requires sufficient resources, including a number of qualified personnel within the entire banking sector.
All regulatory capital requirements described below apply equally, without discrimination, to all banks operating in the country whether they are locally incorporated or branches of foreign banks.
Net worth calculationThe NBC has amended its method of calculation of net worth to be in line with Basel III.21 The sum of paid-in capital and net worth must at least be equal to or larger than the minimum capital.22 Net worth is composed of two components: Tier 1 capital (core capital) and Tier 2 capital (supplement capital).23
For commercial and specialised banksTier 1 capital must include: paid-in capital; reserves; share premium; audited net profit for the last financial year; profits as recorded on intermediate dates (subject to the NBC’s approval) and retained earning limited to 20 per cent Tier 1 capital. Tier 1 capital must deduct: own shares held by the bank; accumulated losses; intangible assets; loans to related parties; and losses determined on dates other than regular year-ends.24
Tier 2 capital, which must not exceed 100 per cent of Tier 1 capital, must include re-evaluation reserves; provisions for general banking risks; subordinated debt instruments not exceeding 50 per cent of Tier 1 capital; general provision of 1 per cent foreseen; and other items with prior approval of the NBC. Deducted items include equity participation in banking or financial institutions and other items including deferred charges.25
For microfinance institutions26
Tier 1 capital of the microfinance institutions is composed of almost an identical structure to the one applicable to the commercial and specialised banks, except that there is no restriction on the retained earnings, and there is inclusion of a provision for general banking risks (with the prior agreement of the NBC).
21 The old calculation method set in Regulation on Calculation of Banks’ Net Worth dated 16 February 2000 was repealed by Regulation on Calculation of Banks’ Net Worth dated 15 October 2010.
22 Article 2 of the Regulation on Calculation of Banks’ Net Worth dated 15 October 2010.23 Id., Article 4.24 Id., Article 5.25 Id., Article 6.26 Regulation on Calculation of Microfinance Institutions’ Net Worth dated 27 August 2007.
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Unlike the structure of Tier 2 capital applicable the commercial and specialised banks, the Tier 2 capital of microfinance institutions must include re-evaluation reserves; provision for general banking risks (with the prior agreement of the NBC); subordinated debt instruments not exceeding 100 per cent of base net worth and accompanied by prior agreement of the NBC; and other items with prior agreement of the NBC.
Solvency ratio (capital adequacy ratio)Banks must not let their solvency ratio slip below 15 per cent.27 Prior to December 2004, the solvency ratio was 20 per cent, and one of the main reasons for scaling down the solvency ratio was to boost credit transactions. The minimum solvency ratio of microfinance institutions is also 15 per cent.28
The numerator of the ratio is the net worth, and the denominator of the ratio consists of the aggregate of assets and off-balance-sheet items. Assets are subject to a weighting system according to their risks. So far, Cambodia’s risk-weighting system takes into account only the credit risks while Basel II requires two additional factors: the market risks and the operational risks.
The weighting system includes:a zero per cent: cash, gold, claims on the NBC, assets collateralised by deposits 100 per
cent lodged with the bank, and claims on or guaranteed by the sovereigns rated AAA to AA-;
b 20 per cent: claims on or guaranteed by the sovereign rated A+ to A-, and claims on or guaranteed by banks rated AAA to AA-;
c 50 per cent: claims on or guaranteed by sovereign rated BBB+ to BBB-, and claims on or guaranteed by banks rated A+ to A-;
d 120 per cent: traded securities; ande 100 per cent: all other assets.
Off-balance sheet items applicable to microfinance institutions are treated with full risk (100 per cent). However, off-balance sheet items applicable to commercial and specialised banks are classified into the following four categories:a 100 per cent of their value if they carry full risk;b 50 per cent of their value if they carry medium risk;c 20 per cent of their value if they carry moderate risk; andd items carrying low risk are not taken into account.
A review is being conducted to harmonize the standard of loan classification and provisioning to comply with the anticipated implementation of the IFRS applicable to financial institutions expected to be effective from 2016.
Capital guaranteeCambodia has yet to establish any deposit insurance scheme, but to help protect depositors, the NBC has imposed a capital guarantee on banking and financial institutions. Commercial banks and specialized banks must permanently deposit 10 per cent of its registered capital
27 Amendment of Regulation Relating to the Banks’ Solvency Ratio dated 29 December 2004.28 Regulation on Microfinance Institutions’ Solvency Ratio dated 27 August 2007.
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with the NBC as capital guarantee. This amount was increased in 2001 from 5 per cent.29 Deposits made in riel by the commercial banks and specialised banks bear interest at half of the six-month refinancing rate set by the NBC, whereas deposits in foreign currencies will bear interest at one-quarter of the six-month LIBOR (London Interbank Offered Rate).30 Microfinance institutions and financial lease companies are required to permanently deposit 5 per cent of its registered capital. Deposits made in riel by the microfinance institutions bear interest at half of the six-month refinancing rate set by the NBC, whereas deposits in foreign currencies will bear interest at three-eighths of the six-month LIBOR.31 However, the deposits made by financial lease companies either in riel or in foreign currencies bear no interest.32The depositing institution may get a refund of its capital guarantee after its liquidation and settlement of all liabilities.
Reserve requirementAs one of the monetary tools, the NBC demands a commercial bank to maintain, with the NBC, reserve requirements against deposits and borrowings at a daily average balance equal to 8 per cent in riel and 12.5 per cent in foreign currencies.33 The reserve requirements were previously increased to 16 per cent in order to curb booming credit activities and to limit lending to real estate-related transactions.
The reserve requirements are 5 per cent34 and 8 per cent35 for microfinance institutions and for microfinance deposit-taking institutions respectively.
Recently, the NBC additionally imposes reserve requirements against borrowing funds. Such reserve requirements are 8 per cent and 12.5 per cent applicable on borrowing funds derived from local and foreign currencies.
The NBC also provides interest fees on reserve requirements maintained with the NBC. The first 8 per cent of the reserve requirements bears zero per cent interest, while the remaining 4.5 per cent of reserve requirements in foreign currencies bears an interest rate set by the Regulation on Term Deposit Interest Rate Determination, Deposit on Reserve Requirements and Banks Capital Guarantee in US dollars.36
29 See Article 16 of the Banking Law.30 Article 5 of the Regulation on Bank’s Capital Guarantee dated 15 October 2001 as amended
by Regulation on the Determination of interest rate on Fixed Deposit, Reserve Requirement and Capital Guarantee in USD.
31 Article 13 of the Regulation on Licensing of Microfinance Institutions dated 11 January 2000 as amended by Regulation on Amendment to Regulation on Licensing of Microfinance Institutions dated 13 September 2006.
32 Article 10 of the Regulation on Licensing of Financial Lease Companies dated 27 December 2011.
33 Article 1 of the Regulation on Maintenance of Reserve Requirements against Commercial Banks’ Deposits and Borrowings dated 27 September 2012.
34 Article 1 of the Regulation on Maintenance of Reserve Requirements for Microfinance Institutions dated 25 February 2002.
35 Article 3 of the Regulation on Licensing of Microfinance Deposit Taking Institutions dated 13 December 2007.
36 Article 2 of the Regulation on Bank’s Capital Guarantee dated 15 October 2001.
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Large exposure and related-party transactionsLarge exposure refers to gross exposure larger than 10 per cent of the banking and financial institutions’ net worth.37 A banking and financial institution’s total credit exposure to a single beneficiary is limited to 20 per cent of the banking and financial institution’s net worth.38 Banking and financial institutions are required to maintain a maximum ratio of 300 per cent between total large exposure and net worth.39 As for the purpose of identifying the beneficiary of large credit exposure, two or more individuals or legal entities will be considered as a single beneficiary if:a one of them exercises control over the other, whether or not directly or indirectly;b they are subsidiaries of the same parent company;c they are under the same de facto management; ord one of them holds an equity interest of more than 10 per cent of the other and they
have a special business relationship.40
In the event a large exposure is guaranteed by another bank or international financial institution, with prior approval from the NBC, the exposure will be reduced to half when calculating solvency ratio.41 Furthermore, the NBC may increase the large exposure ratio to up to 35 per cent of the net worth upon request from the bank, if the NBC finds that the banking and financial institution is ‘satisfactory’ given by the NBC’s internal rating or benefits from a rating ‘investment grade’ by an international rating agency, and provided that the borrower’s financial health is strong (the latter includes good business perspectives, solvency, profitability and management).42
Recently, the NBC is extending the control of large exposure not only on individual and legal entities but also on sectorial concentration in order to capture the overall risk and keep up with the development of banking sector.
Related parties are any individual or legal entity who directly or indirectly holds 10 per cent of capital or voting rights, or any person who participates in the administration, direction, management or internal control, and the external auditor.43 Outstanding loans granted to related parties cannot exceed 10 per cent of the net worth of the banks and microfinance institutions,44 and 3 per cent of the net worth for the microfinance deposit-taking institutions.45 Even though, in accordance with the existing applicable regulation, the banks shall submit report on related parties’ loans on a quarterly basis, in practice, the NBC
37 Id., Article 1.38 Article 2 of the Regulation on Controlling Banking and Financial Institutions’ Large
Exposure dated 3 November 2006.39 Id., Article 7.40 Id., Article 4.41 Id., Article 5.42 Id., Article 6.43 Article 49 of the Banking Law.44 Article 4 of the Amendment of Regulation on Loan to Related Parties dated 7 June 2002.45 Article 3 of the Regulation on Licensing of Microfinance Deposit Taking Institutions dated
13 December 2007.
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requires that such report is made on a monthly basis. Recently, the NBC has also extended its supervision to cover on the basis of entire transactions conducted between related parties instead of on the basis of loan transactions.
Liquidity ratioThe NBC has previously imposed a minimum liquidity ratio of 50 per cent on commercial banks, specialised banks and microfinance deposit-taking institutions. Banks can satisfy the minimum liquidity ratio requirement but have a shortfall of maturing assets over maturing liabilities in the following 30 days. The IMF opined that although a large portion of banks’ balance sheets is invested in liquid assets, they may face short-term liquidity risks.46 Taking into consideration this liquidity risk, the NBC has increased the minimum liquidity ratio from 50 per cent to 100 per cent imposed on all deposit-taking banks and financial institutions.47 The minimum liquidity coverage ratio (LCR) of 100 per cent is set to be fulfilled and maintained by institutions from 1 January 2020. The NBC requires all institutions to comply with the minimum LCR within the following timelines:48
a minimum LCR of 60 per cent from 1 September 2016;b minimum LCR of 70 per cent from 1 September 2017;c minimum LCR of 80 per cent from 1 September 2018;d minimum LCR of 90 per cent from 1 June 2019; ande minimum LCR of 100 per cent from 1 January 2020.
Equity participationEach banking and financial institution may hold up to 15 per cent of its net worth in each equity participation, provided that the maximum total equity participation is restricted to 60 per cent of their own net worth.49 Under the Cambodian banking regime, equity participation is defined as holding at least 10 per cent of the capital or voting rights of another company.50
Securities tradingAll banking and financial institutions, with the exception of microfinance institutions and financial lease companies, are permitted to trade and hold the securities listed on the securities exchange. Based on daily mark-to-market positions held, each institution can hold securities equalling up to 20 per cent of the institution’s net worth. The tradable securities’ positions held by the institutions are marked-to-market on a daily basis and determined by using the official closing prices showed by the securities exchange.51
46 See IMF Country Report No. 15/307, p. 10.47 Article 4 of the Regulation on Liquidity Coverage Ratio dated 23 December 2015.48 Id., Article 5.49 Article 33 of the Banking Law.50 Id., Article 32.51 Articles 4 and 6 of the Regulation on Prudential Limits and Regulatory Requirements
Applicable to Banking and Financial Institutions Trading in Securities dated 31 December 2012.
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Loan classification and provisioningThe Regulation on Asset Classification and Provisioning in Banking and Financial Institutions (the Regulation on Asset Classification) dictates the objective and prudential grading system of all loans and assets held by banks. The classification of loans and assets are based on the repayment capacity, which includes:a past payment experience;b financial condition of the borrower;c business prospective and cash-flow projections;d ability and willingness to repay;e financial environment; andf quality of documentation.52
Every bank’s assets are classified into five categories: Standard, Special Mention (overdue by more than 30 days), Substandard (overdue by more than 90 days), Doubtful (overdue by more than 180 days), and Loss (overdue by more than 360 days). Each category is subject to minimum provisioning percentage amounts based on the respective gross loan: Standard, 1 per cent; Special Mention, 3 per cent; Substandard, 20 per cent; Doubtful, 50 per cent; and Loss, 100 per cent.53
Microfinance institutions’ assets are classified into four categories: Standard, Substandard (overdue by 30 days or more), Doubtful (overdue by 60 days when the loan’s term is less than one year and 180 days when the loan’s term is one year or more), and Loss (overdue by 90 days when the loan’s term is less than one year and 360 days when the term is one year or more). Their provisioning are: Standard, zero per cent; Substandard, 10 per cent; Doubtful, 30 per cent; and Loss, 100 per cent.54
The loan classification and provisioning will be reviewed by the NBC in order to be commensurate with new Basel III guidelines on liquidities ratio in particular the definition of liquid assets ratio and the off-balance sheet.
iv Recovery and resolution
There are currently no specific regulations or measures in place requiring the banks to draw up recovery and resolution plans, or ‘living wills’. The banking and financial institutions are, however, advised to make their own necessary arrangements.
As part of the crisis prevention and resolution initiative, the authorities are developing a legal framework to empower the NBC and other relevant authorities to take action against failed banks. Pending the adoption of such regulations, any liquidation of failed banks must follow the provisions of the Law on Insolvency and the NBC is entrusted to oversee the process.
52 Article 3 of the Regulation on Asset Classification and Provisioning in Banking and Financial Institutions dated 25 February 2009.
53 Article 13 of the Regulation on Asset Classification and Provisioning in Banking and Financial Institutions dated 25 February 2009.
54 Regulation on Loan Classification and Provisioning Applicable to Specialized Banks for Rural Credit and Licensed Microfinance Institutions dated 13 December 2002.
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IV CONDUCT OF BUSINESS
The Banking Law prohibits banks, as well as their personnel, from disclosing information related to their clients to any person except to the NBC, auditors, provisional administrators, liquidators, and the court.55 The banks may share clients’ negative credit information with other banks for the purpose of sound credit activities and risk management56 provided that the banks obtain prior approval from the clients on exclusive utilisation of the information for assessing creditworthiness.57
Pursuant to the AML Law, banks, through their services, must not participate in conversion or transfer of proceeds of offences, and must immediately report those transactions to the Financial Intelligence Unit (FIU) as soon as they become aware of such circumstances.58 The FIU has implemented an electronic reporting system that enables the reporting entities to report cash transaction and suspicious transaction more efficiently. Banks are also required to conduct due diligence prior to doing business with clients, and establish internal programmes to prevent money laundering according to guidelines stipulated by the FIU.59 Failure to do so can result in criminal liabilities punishable by imprisonment from six days to one year and monetary fines from US$25 to US$1,250. Proceeds resulting from such violations may also be confiscated.60 The AML Law was amended in June 2013. The amendment touched three articles of the AML Law (Articles 3, 29 and 30). Under the new Article 3, the definitions of ‘property’ and ‘predicate offence’ were expanded. In addition, penalties on ‘money laundering’ and ‘terrorist financing’ were added in the new Article 29 and penalties for legal persons were added with reference to the Criminal Code. Pursuant to the new Article 30, the authority can freeze the suspicious property relating to the predicate offence before obtaining a court order, or can confiscate the suspicious property following receipt of a court order. The new article also allows the authority to freeze the funds of terrorists, as designated by the United Nations Security Council Resolutions 1267, 1373 and successive Resolutions. Following the amendment, the FIU cooperated with the Ministry of Justice to prepare a draft of a Sub-Decree on Freezing of Property of Designated Terrorists and Organisations aiming to establish the details of mechanisms and procedures for freezing the assets of terrorist-related organisations, which was adopted on 10 March 2014. Having noticed Cambodia’s progressive development and effectiveness in combating money laundering and financing of terrorism, the Financial Action Task Force (FATF) has recently removed Cambodia from its grey list, which means it is no longer under close observation from the FATF. At the same time, the FIU was accepted as a member of Egmont on 10 June 2015.61
Should the banking and financial institutions contravene any provision of their governing laws and regulations or fail to comply with any injunction imposed by the NBC, the NBC may inflict disciplinary sanctions ranging from reprimanding, prohibiting
55 Article 47 of the Banking Law.56 Article 1 of the Regulation on Utilisation and Protection of Credit Information dated
10 May 2006.57 Id., Article 14.58 Article 12 of the AML Law.59 Article 16 of the AML Law.60 Articles 29 and 30 of the AML Law.61 See NBC First Semester Report 2015, p. 43.
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certain operations, suspending or forcing resignation of executives, setting up a provisional administrator, withdrawing the licence, or imposing a fine not exceeding the minimum capital of the relevant banking and financial institution.62
V FUNDING
The core funding of banking and financial institutions is generally sourced from (1) shareholders’ capital, (2) cash deposits, and (3) borrowed capital from third-party banking and financial institutions. There is no restriction on capital flows between Cambodia and the rest of the world, unless in the event of a foreign exchange crisis, where exchange control may be put in place by the NBC for up to three months.63 If there is a need to prolong the period of exchange control, an approval from the Prime Minister is required. To date, no exchange control has ever been enforced.
As the securities market (CSX, Cambodia Securities Exchange) was launched in April 2012, some banking and financial institutions may go public to source required funds, provided that the number of shares to be listed does not exceed a threshold to be determined by the NBC.
VI CONTROL OF BANKS AND TRANSFERS OF BANKING BUSINESS
There is no restriction on the control structure of the banks except that, in order to prevent capital manipulation, the Banking Law64 explicitly prohibits the practice of chain shareholding companies, where each is holding shares in the others. Under the existing regulations, a transfer of the shares’ ownership of banking and financial institutions is subject to different regimes of notifications and approvals depending on the amount of shares affected by the relevant transaction:a less than 5 per cent, no prior notification is required;b between 5 per cent to less than 10 per cent, prior notification is required; andc from 10 per cent and above, prior approval is required.65
Nevertheless, in practice, the NBC applies only one single regime, which is to require prior approval of any transfer of shares. As part of the approval process, the NBC mainly focuses on the background of the transferee and no detailed business plan is required in connection with the application for such approval. Any significant change66 in the shareholding structure of the parent company of a foreign branch operating in Cambodia shall be notified to the NBC.
62 Article 52 of the Banking Law.63 Article 5 of the Law on Foreign Exchange dated 22 August 1997.64 Article 20 of the Banking Law.65 Articles 2, 3 and 4 of the Regulation on Transfer of Shares of Banks dated 8 November 2001.66 Article 7 of the Regulation of Transfer of Shares of Banks dated 8 November 2001.
‘Significant change’ is defined as any change that requires an authorisation of the supervisory authority of the relevant parent company.
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The NBC levies a fee equivalent to 0.5 per cent of all transferred shares’ face value, 0.03 per cent of all added shares’ face value, and 1 per cent of all deducted shares’ face value.67
It is expected that a specific rule be introduced to govern banking and financial institutions that list their shares on the securities market.
VII THE YEAR IN REVIEW
Despite the instability of regional economic growth, Cambodia’s economic growth remained steady at 7 per cent in 2015.68 The banking sector is considered to be the main factor in boosting Cambodia’s economic growth and stabilising the macroeconomics of Cambodia.
In 2015, the NBC issued a Regulation on Emergency Liquidity Assistance for Banking and Financial Institutions and a Regulation on Liquidity Coverage Ratio, which were adopted on 31 March 2015 and 23 December 2015 respectively. The Regulation on Emergency Liquidity Assistance for Banking and Financial Institution provides an effective mechanism to fulfil the need for liquidity assistance of all deposit-taking banks and financial institutions in the event of an emergency so that they may continue their operations in the normal course of business.69 The Regulation on Liquidity Coverage Ratio was prepared with the purpose of setting criteria for the calculation of LCR and to set minimum LCR requirements for deposit-taking banks and financial institutions. This guideline will promote short-term resilience of each institution’s liquidity risk profile, ensure the adequacy of stock of unencumbered liquid assets and ensure that prompt corrective actions are taken by the institution’s management when the LCR potentially falls below the minimum requirement.70 The NBC has also adopted another regulation on the sharing of information between the local supervisory authority and regulator and international supervisory authorities and regulators.71
In general, the banking sector’s performance in 2015 was strong, with an increase of total assets to US$23.92 billion.72 Loans and deposits grew by 28 per cent and 18.9 per cent respectively.73 The non-performing loans ratio maintained a notably low level of 2.3 per cent for banking institutions and 0.7 per cent for microfinance institutions.74
In the past three years, the credit granted to the private sector rose to approximately 30 per cent on average, mainly driven by funding from foreign banks and heightened competition in the banking system. This resulted in an increase of the loan-to-deposit ratio
67 Articles 11, 12, and 13 of the Regulation on Fees Determination for Banking and Financial Institutions dated 30 May 2013.
68 See IMF Country Report No. 15/307, p. 4.69 Regulation on Emergency Liquidity Assistance for Banking and Financial Institutions dated
31 March 2015.70 Regulation on Liquidity Coverage Ratio dated 23 December 2015.71 See NBC Annual Report 2015, p. 31.72 Id., p. 26.73 Id.74 Id., p. 27.
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to over 100 per cent and an increase of the credit-to-GDP ratio to over 50 per cent in early 2015.75 With rapid credit growth, inflation moderated by commodity price has decreased to 1.2 per cent on average in 2015.76
The CBC is the centralised computer system that consolidates all credit information from all banks and microfinance institutions operating in Cambodia, which allows all banks and microfinance institutions to access credit reports, both positive and negative, from each other. A regulation from the NBC requires all banks and microfinance institutions to study the credit reports before issuing loans to their customers. The CBC is also making progress towards including the information related to legal entities available on its database and to extending the scope of its coverage to guarantors or security providers, in addition to borrowers, as is currently available.
The National Clearing System, launched by the NBC, has capacity to expand clearing and settlement service for interbank transfers by replacing the use of large amounts of cash with business transactions via an electronic system. It can transfer large amounts of money quickly and safely. This can promote interbank operations smoothly with a new option of using debit and credit transfers via an electronic system.
In addition, the NBC has also launched negotiable certificates of deposit (NCDs), a new financial security, to enable banks to convert surplus deposits into securities. This mechanism allows banks to utilise those securities as collateral for interbank loans. The NCDs is designed to help the banks maintain their liquidity in times of economic crisis. It also facilitates the work of banks with deposit shortages, by allowing them to borrow funds from other banks with short-term surpluses. By the end of 2015, the NBC had issued 945 NCDs denominated in US dollars for a total amount of US$7.3 billion and 289 NCDs denominated in riels for a total amount of 3 trillion riels.77 The issuance of NCDs increased noticeably during the second half of 2014 after the NBC introduced new incentives regarding the issuance of NCDs, such as increasing the interest rate of NCDs, repurchasing NCDs, and establishing an NCD online trading platform. More importantly, the NBC has reduced the minimum face value of NCDs denominated in riels from 2 billion to 200 million riels, while NCDs denominated in US dollars were dropped from US$500,000 to US$50,000. At the same time, the NBC is no longer offering term deposits from 1 November 2015 in an effort to kickstart the interbank lending market.78 The online trading platform system is also planned to launch in order to facilitate the trading of NCD in the market.79
On 2 February 2015, the NBC and the MEF issued a joint declaration to warn all non-governmental organisations conducting credit operations without a licence from the NBC. As a result, approximately 300 applications for a licence have been submitted to the NBC as of September 2015. Owing to the large number of applications, the NBC decided
75 See IMF Press Release No. 15/518, p. 1.76 See NBC Annual Report 2015, p. 4.77 See NBC First Semester Report 2015, p. 37.78 NBC Announcement No. B7-015-798 SCN on the decrement of face value of NCDs and
the cease of term deposit service dated 30 October 2015.79 See NBC Annual Report 2015, p. vii.
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to temporarily close the ability to apply from 31 October 2015 onward in order to ensure efficiency in examining each application as well as to amend some necessary provisions to reflect this trend.80
In light of the implementation of Foreign Account Tax Compliance Act (FATCA), a consensus has been reached on the content of the Inter-Governmental Agreement, model 1B, and it is ready to be executed.81
The Association of Banks in Cambodia has adopted a voluntary Code of Banking Practice, which aims to promote good banking practices, increase transparency, build a fair and professional relationship between customers and financial institutions, foster confidence in the banking system and encourage a corporate culture of fair dealing.82
VIII OUTLOOK AND CONCLUSIONS
At a macro level, in order to help maintain price and financial system stability, the NBC will promote riels over the short and medium term, and de-dollarisation in the long term. Differential treatment between riels and US dollars, in measures similar to the current regime and applicable to reserve requirement, will be further introduced to promote the use of the riel. There is also a plan to offer investment products in riels, such as Treasury bills and bills to the locals, and reserve eligible government securities to banks seeking to meet the reserve requirement without using cash reserves that bear nil interest.
While the NBC is pursuing compliance with the 25 Basel Core Principles, the readiness of the banking system and regulatory structure in meeting such requirements will require a reasonable amount of time, taking into account the different sizes of banking and financial institutions, as well as the types of risks relevant to the Cambodian market.
Although the number of banks keeps increasing steadily, data on banking transactions to GDP suggests that there is still plenty of room for growth in the sector, in particular for new players who could bring innovative financial products, technology and solid source of funds. The current fierce competition among banks has not resulted in any negative consequences. Rather, it brings positive outcomes in term of liquidity and quality of services and products to consumers. However, with the aim of preventing destabilising effects that may be caused by excessive competition and that may, in turn, undermine the sustainability of the banking system, the NBC will likely adopt stricter policies, based on the IMF’s recommendations, with respect to licensing. These policies will restrict, if not entirely prohibit, the entrance of new players.
There has been some anticipation that the NBC will introduce more specific measures to facilitate initial public offerings of banking and financial institutions, since the current approval regime on share transfers was not originally designed to deal with shares trading in the securities market.
Working towards compliance with Basel III’s new guidelines on liquidity as well as IFRS applicable to financial institutions, the NBC is expected to significantly revise the prudential regulation. The NBC has also been working on shifting to risk-based supervision
80 NBC Announcement No. B7-015-735 SCN on the suspension of licence applications for credit operators dated 2 October 2015.
81 See NBC First Semester Report 2015, p. 26.82 See Code of Banking Practice, p. 3.
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consistent with Financial Sector Assessment Program (FSAP) recommendations. In light of this development, the NBC will upgrade the regulations on liquidity risk management, which are expected to be implemented by early 2016.83
Further to the voluntary banking code adopted by the Banking Association, a specific law on consumer protection in the financial sector is being drafted and will be adopted in the near future and, with it, the landscape of the conduct of business is expected to be significantly changed.
Owing to significant developments in the electronic banking sector as well as the settlement system, the NBC is currently working on amending existing regulations governing the third-party process and is going to introduce a new legal regime in relation to payment service providers. Moreover, several other regulations such as the Regulation on the Transparency and the Advertisement of Cross-border Settlement Service, the Regulation on Consumer Protection for Electronic Settlement Operations, the Rules and Procedure for the FAST System and the Agreement on Online Money Transfer Service are expected to be adopted in the near future.84 On top of that, the NBC is currently discussing the draft of regulation on independent audit of banking and financial institutions and the draft regulation on the liquidity risk management framework of banking and financial institutions.85
Having noted the macro financial risks caused by the rapid credit growth, the increased financing by foreign banks, and the greater exposure to the real estate and construction sector, the IMF recommended that monetary policy and prudential regulations should be tightened further in order to contain financial sector vulnerabilities. Reserve requirements shall be raised to moderate the pace of credit growth. Prudential regulations on large deposit-taking microfinance institutions shall be upgraded or tightened to match those of banks to prevent regulatory arbitrage.86 To abide by this recommendation, the NBC is in discussions to review such prudential regulations on deposit-taking microfinance institutions.87 Should the NBC consider it necessary to mitigate those risks by implementing the IMF’s recommendation, there may be significant changes ahead.
Owing to the recent increase of the minimum capital requirement for banks, it is anticipated that more consolidations will occur in the coming years.
83 See IMF Country Report No. 15/307, p. 10.84 See NBC Annual Report 2015, p. 41.85 Id., p. 31.86 See IMF Country Report No. 15/307, p. 19.87 See NBC Annual Report 2015, p. 30.
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Appendix 1
ABOUT THE AUTHORS
BUN YOUDYBun & AssociatesAt Bun & Associates, Youdy serves as the firm’s practice leader of the corporate, banking and finance and dispute resolution teams. He is currently a panel lawyer for numerous foreign banks operating in Cambodia. His expertise includes project finance, offshore financing, and other complex financial products. He has provided advice to some of the largest financial institutions and securities firms in Asia relating to their business expansion and market entry strategies into Cambodia. Youdy recently counselled a leading Japanese bank in the acquisition of a substantial stake in Cambodia’s largest bank. He previously assisted a large Japanese electronics manufacturer with its US$65 million investment project establishing the first electronic large-scale mass-production facility in the country. He also acted as counsel to one of Cambodia’s largest conglomerates on the acquisition of a US$60 million turnkey brewery plant. He has assisted numerous clients in organising their litigation strategies and acted for an international construction company to successfully enforce a foreign arbitration award in Cambodia under the New York Convention.
Youdy is one of the first commercial arbitrators admitted to the NCAC and also a Fellow of the Singapore Institute of Arbitrators (SIArb). He currently serves a board member of the European Chamber of Commerce in Cambodia (EuroCham). He is a former Secretary-General of the Bar Association of the Kingdom of Cambodia and executive board member of NCAC. Youdy has been consistently ranked a leading lawyer (first tier) in Cambodia by IFLR 1000 and Chambers Asia-Pacific. In Chambers Asia-Pacific 2015, Youdy is singled out for his ‘strong knowledge in banking law, exceptional negotiation skills, and accessibility’. He is fluent in Khmer, English and French.
About the Authors
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BUN & ASSOCIATES29 St 294, PO Box 2326Phnom PenhCambodiaTel: +855 23 999 567 / +855 12 817 817Fax: +855 23 999 [email protected]
