SIBOS 2009 had one of the best opening debates in recent memory, with Ronnie Chan, Chairman, Hang Lung Properties Limited, giving the Western segment of the audience some food for thought about their banking practices. Yet despite a high number of good topics discussed, there seemed to be one profession of the financial industry missing; regulators.
While at Wednesdays Big issue debate, Will transaction banking be the engine for sustainable growth? regulation cropped up as a major topic, there were no regulators on stage to put forward, or rather defend, their viewpoints.
It may have been hard for regulators to justify a trip to Hong Kong in what has probably been one of the toughest times in their careers. While delegates were debating regulation, Hector Sants, chief executive of the UK Financial Services Authority (FSA) and Mary Schapiro, chairman of the US Securities and Exchange Commission (SEC), were announcing plans to explore approaches to reporting and other regulatory requirements for key market participants such as hedge funds and their advisers.
In particular, they agreed to identify a common, coherent set of data to collect from hedge fund advisers/managers to help the SEC and FSA identify risks to their regulatory objectives and mandates. This announcement came out of a meeting of the SEC-FSA Strategic Dialogue, through which SEC and FSA leaders meet periodically to discuss areas of mutual interest. Other issues discussed at the meeting included over-the-counter derivatives markets and central clearing; accounting issues; regulatory reform; credit rating agency oversight; short selling; and corporate governance and compensation practices.
FSA chief executive, Hector Sants said: “The global crisis has underlined how intertwined financial markets and institutions are and regulators around the world have to work together to ensure appropriate oversight. We are all working alongside the Financial Stability Board and other international regulatory committees to drive forward global financial reforms. The strategic dialogue with the SEC is a valuable component of the discussions around these reforms, particularly in areas of joint interest and in identifying potential regulatory gaps.”
SEC chairman, Mary Schapiro, said: As the regulators of two of the worlds major market centers, the SEC and the FSA have a strong interest in collaborating with respect to OTC markets and hedge funds, credit rating agencies and other market participants with cross-border operations. Only through strong cooperation can we achieve coherent oversight of global actors and limit opportunities for playing the regulatory seams. I look forward to continuing this successful dialogue between the SEC and FSA.
This was the fourth meeting of the SEC-FSA Strategic Dialogue, which began in June 2006. The purpose of the Dialogue is to engage at senior levels on current matters impacting the U.S. and UK capital markets and areas of future collaboration.