HK SFC may split deputy head role: sources

With Alexa Lam expected to retire in March, Hong Kong’s securities regulator is mulling how to replace her, sources say. Some predict the mutual recognition scheme will go live before then.
HK SFC may split deputy head role: sources

The number two at Hong Kong’s securities regulator, Alexa Lam, is expected to retire in March next year at the end of her current term, and her role may be split into component parts, say industry observers.

This could mean the long-awaited Hong Kong-China mutual recognition scheme for funds will go live before she leaves the Securities and Futures Commission (SFC), suggested sources.

Lam has been a key architect of the scheme and the SFC would want her to remain in place until it is up and running, suspected one senior lawyer in Hong Kong: “I can’t imagine they would want her to leave at a time when this landmark development still swings in the wind.”

Lam's exit would leave big shoes to fill. In fact, her role is so wide-ranging that it may be divided up after she steps down, multiple sources told AsianInvestor. “I have heard they are having trouble finding someone that ticks all the relevant boxes," added the lawyer.

Lam is deputy chief executive of the SFC and executive director of its investment products and international and China divisions. As such, the role covers regulation of Hong Kong retail investment products, policies on international engagements and market development in mainland China and Hong Kong.

The watchdog is understood to have been seeking a replacement for months and to have been rebuffed on a number of approaches it has made to senior lawyers and counsels.

Among those to have been linked with the role is Joe Longo, general counsel for Asia Pacific at Deutsche Bank and former national enforcement director of the Australia Securities & Investments Commission. But it is thought he would have wanted the post of CEO, currently held by Ashley Alder. Deutsche Bank declined to comment.

Ambition to take the top job may be one of the reasons why others have declined the role. Another is the wide remit of Lam’s post. Some also felt the political aspect of the position could put potential candidates off.

“The SFC wants someone who is politically palatable and has good industry knowledge,” said one Hong Kong-based fund executive. “That’s a hard enough combination, but when you throw China into the mix, that makes it even tougher.

“It has got to be someone who has political aspirations who takes the job,” he added, arguing that a senior partner at a law firm would be unlikely to move to the SFC otherwise. “Maybe someone who is eventually looking to move back to London or Australia and take up a senior regulatory role [would want it].”

Martin Wheatley is a case in point. The former SFC CEO is now chief of the Financial Conduct Authority in the UK. He left his SFC post in mid-2011, having been with the regulator since 2004.

Lam's influence on Hong Kong’s financial industry is clear. She was one of only three individuals to make both AsianInvestor’s lists of the 25 most influential women in Asian asset management, the first published in May 2011 and the latter in May this year.

Recently she has made her mark through her efforts to drive financial cooperation between Hong Kong and China. As one of the architects of Hong Kong’s offshore RMB business and RMB investment products, she is behind the introduction of the renminbi qualified institutional investor (RQFII) initiative that has positioned Hong Kong as the world’s leading offshore RMB centre.

She has also spearheaded the development of the pending mutual recognition scheme, which would allow investment funds domiciled in China to be sold into Hong Kong and vice-versa.

Lam worked as a legal practitioner in Hong Kong, Chicago and New York for more than 20 years. She joined the SFC as an adviser in 1998 and was appointed chief counsel in 1999 and executive director in 2001. She became deputy CEO in February 2008.

The SFC declined to comment for this article, and Lam did not respond to an interview request.

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