FIA Asia-V: “This Is A Great Time To Be Alive!”

Thom Thompson

Thom Thompson

Editor

“This is a great time to be alive!” 

Glenn Seah actually said that on the FIA Asia-V panel titled The Regulatory Landscape for a New Decade when he was asked to discuss cross border issues in light of current geopolitical conditions. Seah, SGX’s Head of Legal, Compliance and Corporate Secretariat, had just said that when there is chaos, there are also opportunities for those who can react – because of  either planning or luck – and adapt. 

Seah’s remarks turned a little less sunny when he noted that there has been “some pullback from” appreciating the merits of globalization. Fragmenting regulation shows itself when governments withhold equivalence determinations or deny regulatory deference to foreign regulated markets. Seah said he is concerned when he sees this happening for political rather than regulatory reasons. 

Ben Pynt, legal counsel at DRW, agreed that companies that can and do plan ahead are in a better position to take advantage of opportunities as they arise. It can be hard to stay up to date with the rapid pace of changes. For example, the increased use of social media and the sheer number of communication channels complicate compliance efforts. 

The transition to work-from-home during the pandemic raised not only a lot of logistical and technical problems but also presented jurisdictional questions about who could do what activities in which locations. Are there license requirements to conduct this or that activity in the jurisdiction? To what extent do an entity’s current registrations extend to trading and other activities conducted remotely? 

While Singapore’s Monetary Authority ascribes to the concept of granting regulatory deference based on close collaboration with other regulatory bodies, tensions still can arise. MAS’s Nathaniel Lim said that in his experience, educating yourself about other parties’ regulations and concerns and understanding where they draw “red lines” helps both sides come to agreement. Close collaboration with other regulators on both bi- and multilateral bases helps build productive rapport.

Linklaters partner Chin-Chong Liew noted that as outside counsel it is his role to worry about worst case scenarios. Liew pointed to international sanctions as an “extreme form of not working together.” Liew suggested that the derivatives industry’s experience so far dealing with sanctioned countries and businesses has been limited. The countries that have been subject to sanctions, like Cuba, Venezuela, and Russia, have not figured prominently in financial markets. What concerns Liew – in the vein of worst case scenarios – is what would happen if a major Chinese institution were sanctioned.

“This is a great time to be alive!”      

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