In his first official visit to Hong Kong since leaving the Hong Kong’s Securities and Futures Commission, Mr Wheatley gave a speech about the UK’s financial services regulatory approach at a reception in the British Consulate-General on 19 March.
The reception was attended by regulators, Government figures from Hong Kong and the Qianhai Authority and senior bankers. Representatives from the investment management industry were also present, thanks to the support offered to the event by the Alternative Investment Management Association and the Hong Kong Investment Fund Managers Association.
Mr Wheatley opened his speech by reflecting on the close ties between the financial services sectors in the UK and Hong Kong which make what happens in Hong Kong important to the Financial Conduct Authority (FCA) as the UK’s financial regulator.
Hong Kong is the UK’s 5th biggest trade partner in financial services and 2nd only to the US outside of Europe. It is a critical base for two of our largest banks, HSBC and Standard Chartered. The sector itself has a significant growth rate, something like 6% a year, and accounts for around 22% of Hong Kong GDP. And it is the gateway to China, particularly in your industry – asset management – where the mutual recognition agreement with the mainland clearly set Hong Kong as the Chinese asset management hub.
He went on to discuss the global challenges of financial services regulation in a post-2008 crisis world, saying that these shared challenges required cross border solutions and co-operation between local authorities.
On the asset management industry, Mr Wheatley said that the regulator’s job was to ensure that investments are safe from malpractice, wherever they were made. Cross border financial services activity was a key strength of both the UK and Hong Kong regulatory regimes:
…we recognise the importance of and benefit of cross border financial services activity. It helps spread risk, enhances competition and fosters innovation so the markets can continue to meet the needs of the economy. As such we, as you do in Hong Kong, intentionally operate a level playing field, a non-discriminatory regime.
The FCA was established in April of 2013, as one of the successor organisations to the Financial Services Authority (FSA). The FCA has dual objectives of protecting consumers and maintaining market integrity. FCA is the UK’s regulator of primary and secondary markets and of the conduct of all financial services firms. It is broadly equivalent to a combination of the functions of the Securities and Futures Commission (SFC) in Hong Kong, as well as the market conduct and consumer protection elements of the Hong Kong Monetary Authority (HKMA) and the Office of the Commissioner of Insurance (OCI).
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