Regulators in Asia-Pacific have called for closer
jurisdictional cooperation to protect emerging markets from
onerous extraterritorial regulations, such as the
G-20s rules on OTC derivatives
, the Dodd-Frank Act and Basel III.
Speaking at this weeks Asia Financial Forum in Hong Kong,
Australian Securities and Investments Commission (Asic)
chairman Greg Medcraft and Securities Commission Malaysia
chairman Datuk Ranjit Ajit Singh said local regulators needed
to more actively put forward their agendas to protect emerging
markets from regulations intended for more mature markets such
as the US and Europe.
Singh complained global discussions on regulatory reforms were
still dominated by the US and Europe. Such an arrangement risks
marginalising the Asian financial markets, he said, and could
inadvertently result in regulatory fragmentation, or the
creation of a tripolar global financial system.
Such an outcome would be damaging, to say the least, and
risks what is referred to as the deglobalisation of finance to
regionalism and regulatory protection, Singh
Medcraft noted Europeans operated as a very close bloc. To that
end, he believed Asia needed to follow suit, operating as a
bloc to ensure that there werent any inappropriate
Singh proposed that Asian policymakers come together to provide
greater analysis, research and synthesis of issues facing the
region to improve collective representation.
Duplicating laws across jurisdictions does not work. Instead
Medcraft, who will become chair of International Organization
of Securities Commissions (Iosco) in March, advocated focusing
on equivalence of outcomes rather than equivalence of regimes.
He stressed that a regulators should consider objectives and
outcomes rather than trying to replicate laws.
He said that at the next Iosco meeting in Sydney, he and the
Securities and Futures Commissions Ashley Alder will
propose a task force to look at cross-border regulation and its
What were looking at doing is establishing a
toolbox of principles globally to allow jurisdictions to better
recognise each others regimes, he said.
The US had, for example, developed a way to deal with OTC
derivatives, he said. But its exact approach may not be
appropriate in other jurisdictions. However, the principles
behind these regulations may be points that other jurisdictions
would like to consider to achieve the same outcomes.
announces new cross-markets and fixed income executive director
extraterritoriality is fundamentally flawed
OTC regulation in Asia:
where are we now