Martin Wheatley comments on regulatory issues at the Fix Conference

Martin Wheatley, CEO of the Hong Kong SFC, spoke today at the Fix Conference in Hong Kong.  Mr Wheatley covered a variety of issues including those relating to last week's trading glitch on the US exchanges and he highlighted four issues that were receiving regulatory attention in Hong Kong.

The first two, the licensing of credit ratings agencies and additional reporting for hedge funds, were projects already underway at the SFC.  Credit ratings agencies would have to apply to be licensed in Hong Kong and new circulars would be issued to give them guidance as to how they would deal with the conflicts of interest created by their business methods.  Martin did not give a specific time for the annoucement.

Recently IOSCO published guidance for regulators on information that they should seek from hedge funds operating in their jurisdiction.  Martin said that the SFC would soon begin collecting additional information from hedge funds.  While Martin did not give any timing, we know from some events we have recently attended with Stephen Po, the Director of Supervision, that the survey will come out soon so that an IOSCO deadline of October can be met.  Mr Po has discussed the new requirement at a couple of functions that he has recently attended.

Mr Wheatley went onto say that there were two open issues that the Commission was looking at closely that had not yet become policy in Hong Kong and they were the Volcker rule and new rules regarding standardisation and exchange trading of OTC products.  These are apparently issues that the Hong Kong SFC is carefully monitoring to consider whether they should become policy if those issues proceed in the US.

Otherwise the conference went well.  Yours truly spoke on a panel on regional regulation issues.