SFC’s Alder: global firms need regulatory cooperation

Author: Ashley Lee | Published: 6 Nov 2014
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Securities and Futures Commission (SFC) chief executive Ashley Alder has outlined intentions to form a college of Asian regulators to supervise global financial institutions.

Speaking at the Asia Securities Industry and Financial Markets Association’s (Asifma) annual conference in Singapore yesterday, Alder emphasised that it is nearly impossible to properly supervise the parts of large global firms alone.

This follows remarks Alder made last week at another industry conference announcing that Iosco’s Asia-Pacific Regional Committee plans to release a road map on what regulators in the region want to achieve together to develop domestic capital markets.

"The overarching need is to work far better together to promote efficient flows of capital across regional markets and to encourage a wide range of cross-border financial activities," he said.

But carrying that work out in a way that benefits Asia and results in positive engagement with the EU and the US – where the vast majority of firms are based – will be a challenge, he said.

To that end Alder proposed setting up new bilateral and multinational supervisory agreements between securities regulators, which would start by setting up regional supervisory memoranda of understanding (MOUs) and multilateral regional supervisory colleges for large firms.

"We have already started discussions on this," he said, adding that the colleges of supervisors are meant to be permanent – but flexible – structures for cooperation and coordination among regulators.

In an interview following his speech, he emphasised that Asia depends on and welcomes the presence of global financial institutions. But decision-making within these organisations is disparate, he said.

"In territories in Singapore and Hong Kong it’s actually quite difficult to get a grip on where decisions are being made and where the responsibility lies for activities that affect our markets," he said.

Alder added that previous supervisory cooperation from a securities regulator perspective has been virtually non-existent, but hoped that will change quickly.

However a timeline has not yet been established. "In terms of timeline, I can’t give you one because we’ve just started," he said. "But we’ll try to push it as fast as we can."

See also

Regulators: Asian rulemakers need a global agenda

SFC: financial institutions must focus on ethics

Stock Connect to boost SFC – CSRC cooperation