On Tuesday, July 27, 2010 at 5 p.m. London time, the law firm Reed Smith will host a teleseminar focused on the recently passed Dodd-Frank Wall Street Reform and Consumer Protection Act. The panel, consisting of a number of industry experts with substantial experience in both the financial and physical commodities markets, will include internationally acclaimed derivatives market expert, Dr. Craig Pirrong. In addition to providing an overview of the new derivatives laws, including the changes to the regulatory and commercial environment of the U.S. derivatives market, which are likely to be largely replicated in other markets, the panel will discuss the rule-making process that will further shape the industry over the coming years.

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On April 30, 2009, China’s State Administration of Taxation announced that, retroactively effective to January 1, 2008, seventy percent of a venture capital enterprise’s total investment can be counted as a deduction from its taxable income. The applicable investments are limited to equity investments in private small- and medium-sized high-tech and new technology projects by venture capital enterprises once the two-year equity holding is reached. The deduction can also be carried over to the following year if the amount exceeds the tax bill in the current year.

However, this new preferential tax measure, which undoubtedly benefits venture capital investors, is subject to specific provisions. For example, the investing enterprise’s business scope must comply with the Interim Measures for the Administration of Venture Capital Investment Enterprises. Also, the venture capital enterprise must be registered as a professional corporate entity engaging in venture capital investment. Finally, although the measure stipulates the required conditions and procedures for completing a filing, the
Ministry of Finance, and the tax authorities, may impose further conditions.

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Starting in July 2012, as part of an effort to overhaul its immigration system, Japan will abolish the Alien Registration Act. In its place, the amended Immigration Act will manage the corresponding issues and information of the Alien Registration System for foreigners working in Japan. Though the new law has been passed by the Diet and is scheduled for immediate implementation to be administered by the Ministry of Justice, many applications of its details remain undetermined.

However, there are clear innovations in Japan’s new work-visa system. For example, a new “Residence Card,” which displays fewer details than the current alien registration card, but requires exhibiting details like the name and address of one’s employer, will be introduced.

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On July 6 & 8, 2010, the Asset Management in China seminar will be held in London and New York. Hosted by the law firm Allen & Overy LLP, the program is designed to focus on the recent developments for investment funds in, and relating to, China. As China’s asset management market presents immense opportunities for fund sponsors, asset managers and institutional investors, recent regulatory changes has created extraordinary prospects for capital raising, investments and asset management relating to China. The July 6 event will take place in Allen & Overy’s London office, starting at 5:30 p.m. and followed by a reception. The July 8 event will be held in Allen & Overy’s New York office. To RSVP or for further information, please contact matthew.rush@allenovery.com or visit http://www.allenovery.com/AOWEB/NewsMedia/Event.aspx?contentTypeID=3&content SubTypeID=1&itemID=56535&prefLangID=410 for the London event, and http://www.allenovery.com/AOWEB/NewsMedia/Event.aspx?contentTypeID=3&content SubTypeID=1&itemID=56523&prefLangID=410 for the New York seminar.

China remains one of the world’s top destinations for foreign direct investment. It attracts investment from companies in more than 190 countries, almost all Fortune 500 companies and is expected to grow by atleast 9.5% in the year 2010, as reported by World Bank.

There remains no doubt that investing in China is one of the most lucrative options for investors. Nonetheless, one needs to be wary of the recent developments in Chinese state and trade secrecy laws. There may be increased risks from the possibility of an overlap between a previously held trade secret of a particular business or industry and the altogether more sensitive issue of state secrets. However, these risks can be overcome simply by exercising reasonable caution and due-diligence.

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Law firms’ schedules are usually thought of as strict and nonfamily-friendly, traditionally reserving partnership for full-time attorneys. Those unable to work the needed hours frequently have found it difficult to advance their careers. But a growing number of firms are offering a part-time partnership option, which they feel is important to recruit and retain.

The Project for Attorney Retention (PAR), an organization that promotes work/life balance policies in the legal profession, recently released a study highlighting the success of partners who work part-time, stating “This report…shows that law firms can create successful reduced-hours programs–and that part-time lawyers and their law firms can flourish when they do.” The report listed several contributing factors to the method’s success, such as the fact that part –time partners are mainly driven by client needs, and that reduced hours programs attracted and retained many partners.

According to figures compiled by the National Association for Law Placement, women make up 18 percent of equity and nonequity partners nationwide and only 12 percent of these partners work a reduced-hours schedule.

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Wensheng Peng, head of China research at Barclays Capital, recently spoke to FinanceAsia about economic measures China should consider before making substantial changes to its exchange rate policy. Peng’s suggestions include the further liberalization of capital controls in China, and for the renminbi to play an increasing role as an international currency.

Although China is a world economic power, there is a great disparity between that reality and China’s limited integration into global financial markets. Already the world’s largest exporter, and likely to become the largest importer soon, China has many restrictions on cross-boarder capital movements, particularly with regard to portfolio and banking flows. Since a large part of China’s capital outflows have been through the official sector, the official reserves are mostly invested in fixed income assets, leading to an imbalance in the risk-return profile of China’s external assets. Also, because the government controls those external assets, China’s wealth in foreign exchange reserves, estimated at around $2.45 trillion, overstates the strength of the country’s external capital. As a result, the Chinese government must continue to diversify its external capital position by promoting direct investments and lending by the corporate sector.

China must also push the renminbi as an international currency. Owing to China’s importance in world economics, it makes little sense that the renminbi plays such a limited role in the global monetary system. The explanation lies with the Chinese government’s restrictive policies on the renminbi’s convertability. By actively preventing its proliferation in worldwide transactions, the Chinese government has stifled its potential. However, the Chinese government has recently taken serious steps to “internationalize” its currency. In 2004, it extended renminbi services to Hong Kong. In 2009, the government decided to allow cross-border trades to be settled in renminbi. Finally, in 2010, the government undertook measures specifically designed to develop an offshore renminbi market.

Although these measures will become increasingly significant with time, the pace of growth is still restricted by the remaining government controls on renminbi convertibility. Indeed, without full convertibility, it is difficult for the renminbi to play a significant role in the global monetary system. Yet, in the near future, as the renminbi becomes more convertible and China’s economic clout grows, Peng expects to see the renminbi become a significant international currency.

The Hong Kong IPO market, which saw a great deal of growth since 2009, may see a jump in resource IPOs as a result of recent regulatory changes. Effective on June 3rd, 2010, the HKSE new Chapter 18 regulations will restrict listings on the exchange. Chapter 18 rules prohibit pure natural resource exploration companies to list unless the company can establish the existence of economically exploitable natural resources. In addition, companies must provide a defined production plan for the extraction of aforementioned resources. As such, the HKSE now requires exploration companies to substantiate the existence of natural resources by an expert opinion.

These restrictions protect novice investors from turbulence in the mining industry and provide investors with attractive IPOs. According to HKSE advisor and partner with Minter Ellison in Hong Kong, Fred Kinmonth, “”The new rules, which take effect on 3 June [2010], ensure that investors are provided with material, relevant and reliable information that meets globally recognized standards.”

The regulations are expected to increase the attractiveness of listing on the HKSE. Kinmonth also remarked that mining and petroleum companies from a number of resource rich countries have expressed interest in listing in Hong Kong. In addition, the Chapter 18 restrictions make investing in mining companies on the HKSE more attractive and will likely create a flurry of IPOs. This should provide for an opportunity for mining and petroleum companies to raise capital throughout Asia.

The Japanese Ministry of Justice has announced that it will ease restrictions on foreign law firms operating in the country by allowing them to establish corporate bodies and open multiple offices in the country. These proposed amendments will probably be submitted to the Diet in the fourth quarter of this year and come into effect in January 2012.

This move is believed to be in response to the number of foreign law firms who are rumored to be looking at places like Osaka as a possible location for a second office. Cities like Osaka which is home to quite a few major Japanese companies like Panasonic, Nippon Life Insurance, Sharp and Itochi and cities like Chiba home to AEON are not fully serviced by US and UK law firms. According to Mark Weeks, Managing Partner of Orrick, Herrington & Sutcliffe in Tokyo, “there are a lot of manufacturing clients in that [Western] region and it would therefore be an obvious place for foreign firms to consider opening a second office, if and when the market opens up”. For most US and UK law firms any decision to open another office in Japan, or elsewhere in Asia, is usually driven by client needs and, as Weeks admits, the decision to open an office and/or expand depends on the talent that a firm is able to bring in to service existing clients or an opportunistic hire from.

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The Chinese government has stated that China’s regulation on the Internet industry is legal and, thus, should be free from unjustifiable interferences.

A spokesperson with China’s State Council Information stated that China’s reason to legally regulate Internet usage is to create a more reliable, helpful information network that is helpful to economic and social development.

The spokesperson also said that the regulations are completely legal as they censor online information which incites subversion of state power, violence and terrorism or includes pornographic contents, and those are explicitly prohibited in the laws and regulations and has nothing to do with China’s supposed “restrictions on Internet freedom”.  Consequently, China should be able to deal with those online contents without interference.

Different countries have different ways to regulate Internet that suit their unique circumstances, and China is just doing the same, the spokesperson said.