House

HOUSE, Issue 38

Welcome

...to the latest edition of House and whilst the banks have started to slow down somewhat, we have seen pockets of recruitment across Asia Pacific, most notably in China and Australia where the regulatory rhetoric is at an all time high. We have also seen a real rise in US and now UK law firms looking to build their regulatory litigation teams in Hong Kong. Finally, as mentioned last month, the crypto community are all looking at their regulatory controls; unlike the US, no big moves yet that we are aware of, but we are expecting one soon!

China’s evolving regulatory environment and the resulting demand for professionals

China entered a “new era” following it’s 19th National Congress which has marked 2018 to be a year of change and reform. China’s highly fragmented regulatory framework has failed to keep up with the explosive economic growth and rapidly expanding and increasingly complicated financial markets. As a result, financial institutions such as Anbang can and are exploiting cracks in the fragmented regulatory environment which is posing mounting risks to China’s overall financial system.

China has made further efforts to address this issue with a major reorganisation of it’s regulatory bodies. China’s banking and insurance regulators have been merged, and the head of this body, along with the head of the China Securities Regulatory Commission (CSRC) and the People’s Bank of China, will be governed by the special cabinet level Financial Stability & Development Committee (FSDC), dubbed the “super financial regulator”, which was set up last year.

Industries and companies have already begun to feel the effects of this tightening regulatory environment, with major change and new regulation coming to insurance, money market funds, financial holdings companies, shadow banking, asset management, data privacy and Pharma, just to name a few. Coupled on top of this is China’s willingness to open itself to the rest of the world, with caps on foreign ownership to be relaxed and eventually completely removed.

The resulting increase of investment in China and the enhanced regulation will only further the hiring need for regulatory professionals, which begs the question, does China have the candidate pool and calibre to match this demand?

Australia’s calling..

The recent Royal Commission findings on the conduct of the Australian retail and investment banking sector highlight a number of operational and ethical breaches who have resulted in huge fines and a drop in consumer confidence across the entire financial services industry. More damaging than the fiscal penalties is the loss of consumer confidence.

In an effort to mitigate the bad blood the sector has initiated a large-scale hiring drive to enhance their assurance functions. At the forefront of this have been the Commonwealth bank of Australia who have announced they are increasing their compliance function by up to 100 heads this year alone, with the vast majority of these hires being in the AML and KYC functions.

With the expectation of stricter regulation combined with a restricted local talent pool the focus is on bringing back Australian talent that moved overseas during the last two decades. Financial hubs with more robust regulatory frameworks and higher transaction volumes are the ideal target with Australian nationals working in London, New York and Hong Kong high on the wish-list. Arion House is currently engaged in a number of processes centred around identifying talent willing to moving ‘home’ and would welcome the chance to discuss potential opportunities with anyone open to the move.

CONTRACTORS!

Finally, if you are still not sure about your resource for the rest of the year or are losing permanent headcount, Arion House has access to multiple compliance officers and financial crime prevention officers at different levels and sectors, including banking, asset management and consulting.