IFLR Asia Capital Markets Forum 2019: meet the speakers

Author: Karry Lai | Published: 23 Oct 2019
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This year’s IFLR Asia Capital Markets Forum will bring together industry experts, private practice practitioners and leading counsel to explore the latest developments surrounding the capital markets legal landscape. Key discussion points include: how digital is transforming the capital markets, views on high yield, the opening up of the Chinese capital markets, and Hong Kong’s biotech listings.

Click here for more information on the forum, to view the agenda, or to register to attend.

What do you spend most of your time doing at the moment?

Virginie Duval, head of legal APAC regulatory advisory, BNP Paribas

There is still a lot going on in the regulatory landscape. Benchmark regulations, European Market Infrastructure Regulation (EMIR) refit, senior manager accountability, recovery and resolution regimes interactions are all keeping regulatory and product teams very busy. In particular, international banks are dealing with potential conflicting regulations and increased regulatory attention on implementation.

Jackson Poon, general counsel, Liquefy

I spend most of my time staying up-to-date on the regulations on security tokens and distributed ledger technology across the world. It is important to understand different regulators’ attitudes towards security tokens since they will impact the adoption of security tokens by financial institutions. I am regularly meeting with asset owners, brokers, financial institutions and consultants to explore collaborations with Liquefy, as well as how they can use blockchain technology to assist their existing businesses.

Mekail Ahmed, general counsel and head of structuring, Gateway Private Markets

I am focused on developing Gateway’s platform and product offering and executing on our strategy to simplify access to private markets. At the operational end, this involves defining and establishing a secure and efficient institutional framework for sourcing and transacting private securities.

Alec Tracy, COO and general counsel, Admiralty Harbour Financial Group

As a new and growing firm, we are in a state of constant change. My responsibilities as a member of the firm’s senior management team take up a fair amount of time as we develop and review our business plans and strategies.

In addition, from a legal and compliance perspective, we are constantly re-evaluating our policies and processes. As the COO and general counsel I play a key role in this regard and since I do not come from a compliance background, this has been a somewhat steep learning curve. I also play a role in client management and advising the team on transaction execution issues. This role is closer to what I did as a private practice lawyer.

What are the biggest trends/themes in your market?

Virginie Duval

The reform of interbank offered rates (IBOR) and the determination of reliable risk-free rates is a big theme at the moment. It was triggered by the UK regulator’s statement on the potential cessation of Libor, and now many APAC jurisdictions are working on the determination of an alternative rate for their local IBORs.

Jackson Poon

Currently, the process in which securities are bought, sold and traded is manual and inefficient. Blockchain technology can help to automate administrative processes to make security transfers more efficient. The World Bank recently issued the world's first bond created, allocated, transferred and managed through its lifecycle using blockchain technology. We believe that financial institutions will start adopting blockchain technology given the benefits to transactions.

Mekail Ahmed

Companies are staying private longer, which leads to several challenges affecting different participants within private markets. These can include a lack of liquidity for shareholders and administratively onerous and uncertain transaction procedures for would-be investors.

Companies are also increasingly leveraging private markets for fundraising and considering alternatives to traditional sources of liquidity, such as direct listings over IPOs over the longer term.

Alec Tracy

Slowing growth in China, the trade war with the US, and other factors continue to put pressure on Chinese business and the financing system. Since many companies do not generate sufficient cash flows to repay their debts, refinancing is critical and has become increasingly challenging for many companies. Thoughtful structuring and seamless transaction execution can be the difference between success and failure in tricky markets.

We are also seeing the development and refinement of onshore restructuring practices, as regulators, banks and companies come to grips with the reality of increasing default rates. The rapid growth of the domestic Chinese bond market over the past several years further complicates this picture, as does the increasing use of onshore security for offshore debt. Understanding onshore restructuring practices as they evolve is important both in the restructuring context and when structuring and executing new issues.

What do you think is the biggest challenge for Asian capital markets in the next 12 months?

Virginie Duval

The potential cessation of Libor is a huge challenge for the market. Dealing with legacy transactions and managing clients’ expectations will require a lot of effort from all financial institutions.

Jackson Poon

The biggest hurdle is educating regulators and financial institutions that the benefits of tokenisation outweigh the risks. The legal rights to the underlying asset is the same as would apply to traditional assets, but with the benefit of automating the administrative tasks through the use of smart contracts. 

Mekail Ahmed

From an operational and documentation perspective, standardising the sometimes fragmented and highly bespoke approach commonly taken by companies will be an important element to achieving scale.

Alec Tracy

In the China debt capital markets space, we believe that the state of the economy, in light of the trade war and other factors, will continue to create uncertainty and drive market volatility. The impact of the reality of negative interest rates in key developed economies like Germany and the possibility that the US may follow, plus uncertainty about the prospects for global growth, are also likely to pose challenges as investors vacillate between risk-on and risk-off views.

In China, investor preferences for short-term debt over the past several years have exacerbated refinancing risks, and increasing default rates seems likely to make transactions more challenging to complete. If liquidity in China is tightened, this may also impact both default rates and the ability to complete transactions, particularly if the ability of investors to access leverage is curtailed.