Ashley Alder, the CEO of Hong Kong’s Securities and Futures Commission since 2011, will leave his post to join UK regulator Financial Conduct Authority (FCA) in January 2023, the commission said on Friday morning.
The government will undertake a global search for a replacement. Alder, whose contract was set to end in September 2023, is the commission’s longest serving CEO.
“I owe a debt of gratitude to all who have contributed to the evolution of the SFC into an organisation which is acknowledged globally as one of a handful of world-class market regulators,” Alder said in a statement by the SFC.
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“The policies and reforms we have put in place are now firmly embedded and institutionalised, and my successor will inherit a solid and effective regulatory framework which underpins Hong Kong’s success as an international financial centre.”
Alder, 63, became SFC’s CEO in October 2011, and has carried out reforms to tackle risks and misconduct, including the 2018 listing reforms. He also worked on the Stock Connect schemes with Shanghai in 2014 and Shenzhen in 2016, as well as the Bond Connect in 2017. Last year, he helped develop the Wealth Management Connect scheme and most recently, he helped launch the ETF Connect on Monday.
SFC chairman Tim Lui told the Post that he received Alder’s resignation request at the end of last month, and that Alder’s contract allows him to leave with six months’ notice.
“His new role in the UK Financial Conduct Authority is a non-executive chairman role,” Lui said. “We wish him all the best in his new role and hope Mr Alder can act as ambassador for the Hong Kong financial market.”
Lui noted that Alder’s tenure of 11 years covers a third of the 33-year history of the commission. “The past decade has seen a lot of reforms and new schemes to improve the quality of Hong Kong’s financial markets and maintain the confidence of investors,” he said.
The government will consider talents around the world for the next CEO. Lui declined to comment on brokers’ speculation on Friday that tipped Alder’s long-term deputy, Julia Leung Fung-yee, as a front-runner to succeed him.
“Of course, those applicants who are familiar with Hong Kong and China affairs will have an advantage but the government will consider all factors to find the best talent for the job,” Lui said.
Leung is now acting CEO as Alder is on holiday, although he is expected to return to the city to handle the handover of his post.
HM Treasury of the UK also announced Alder’s appointment on Friday morning. It said he would succeed Richard Lloyd, who has served as interim chair since Charles Randell stepped down from his post in May.
In October 2019, the SFC announced that Alder planned to step down in September 2020. In May 2020 he reversed course and agreed to stay on for three more years to “ensure that the financial system functions reliably and with integrity throughout a period of exceptional stress”.
At the time, the city had experienced months of social unrest, followed by the start of the Covid-19 pandemic. Bloomberg reported that the Chinese government wanted Alder to stay on to strengthen the confidence of international investors.
Alder, a UK native, has a master’s degree in law from Cambridge University and was a lawyer for 20 years before joining the SFC. He headed Asia for Herbert Smith Freehills, one of the world’s largest legal firms.
During his tenure at the SFC, Alder has worked closely with the CSRC on multiple cross-border trading schemes, and also cracked down on shoddy IPOs in the city, helping Hong Kong become the world’s largest IPO market seven times over the past 13 years.
Alder is also currently the elected chair of the International Organisation of Securities Commissions (IOSCO), the global standard-setter for securities markets regulation.
Lui said Alder’s influential role in the IOSCO and other international organisations “not only helps Hong Kong earn the recognition as a world-class regulator but also cements its position as a leading global financial centre”.
The departure of its CEO comes as the SFC and peer organisations are struggling with a talent shortage. The SFC lost 12 per cent of its staff last year, compared with 5.1 per cent in 2020, Lui told lawmakers in February. The Insurance Authority also has 30 vacancies, while many banks and insurance companies have lost talent due to the city’s tough quarantine rules.
Alder, the second CEO of the SFC since the regulator split the executive chairman role into CEO and chairman in 2006, is known for tough action and imposing heavy fines for misconduct.
In October 2020 the SFC imposed a record fine of US$350 million on Goldman Sachs (Asia) over bond offerings in 2012 and 2013 that raised US$6.5 billion for 1Malaysia Development Berhad (1MDB).
The SFC also imposed fines totalling US$12.88 million on 10 investment banks, including UBS, Merrill Lynch, Morgan Stanley and Citigroup, for failing in their duty as sponsors of initial public offerings over the past two decades, according to calculations by the Post.
“In reference to the private companies in China, there are some very good ones and there are some not so good ones,” Alder said in October 2011 in his first speech as head of the SFC. “That is the reality, and the listing sponsors have the responsibility to ensure they bring the right [companies] to market.”
HSBC Holdings incurred a record US$52 million fine in 2017 over sales of structured products that imploded after the collapse of Lehman Brothers Holdings. And in January of this year a unit of American banking giant Citigroup was fined US$45 million for “pervasive dishonest behaviour” across its various trading desks over an 11-year period.
In December 2017 the SFC joined with Hong Kong’s Independent Commission Against Corruption to investigate Convoy Global Holdings, part of the so-called Enigma Network, a group of up to 50 companies with opaque corporate structures that regulators claim have conspired to entrap minority investors.
Alder has also been keen on carrying out more regulation on cryptocurrency and online scams, as well as promoting financial regulation to help curb climate change.
The FCA is the regulator for around 51,000 financial-services firms and financial markets in the UK. Alder said he wanted to “contribute to a crucial phase in the FCA’s history as it helps chart the UK’s post-Brexit future as a global financial centre”.
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