HONG KONG : The chief of Hong Kong's securities watchdog has called on regional regulators to fully participate in the global implementation of new financial rules or risk Asia being isolated.
He said a "one-size-fits-all" set of financial regulations imposed by the West could hurt Asian markets.
The financial world is facing regulatory changes in the aftermath of the 2008 financial crisis, with another period of economic fragility on its hands.
And with the US and Europe taking steps to protect their markets, Hong Kong is urging Asian regulators to speak out against having the same set of rules imposed in this part of the world.
Ashley Alder, CEO of the Hong Kong Securities and Futures Commission (SFC), said: "If Asia does not get properly involved in the global regulatory agenda, we will find that the US and European rules will be extended to us whether we like it or not. The result could be an isolation of Asian markets from international finance."
Speaking at the 3rd Pan-Asian Regulatory Summit, other Asian regulators echoed his warnings against a "one-size-fits all" approach.
Kirk Vannikul, deputy governor of the Bank of Thailand, said: "So what Asia is trying to do is not trying to overturn the system or trying to undermine the reform. What we are asking for is only some greater flexibility so that we can have the framework, so that we can design our own measures to suit our systems."
There are growing concerns within the Asian financial industry that international regulation may result in a clash with characteristics of local markets, and could drain liquidity.
New rules such as those under the Dodd-Frank Act have sparked controversy, as US regulators want the rules to apply to cross-border trades.
Mr Alder said if Asian firms do not cooperate, "international firms will find it difficult to operate here and could withdraw from some activities, seriously harming liquidity in our markets. It could be a case of my way or the highway."
The head of the SFC said cross-border rules should be internationally agreed upon. He dismissed concerns about regulatory arbitrage, saying Asia does not intend to have laxer rules than the West.
- CNA/ms
HK's securities watchdog urges support for new regulatory framework
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HK's securities watchdog urges support for new regulatory framework
