Hong Kong’s top market regulator Alder to join UK watchdog

HONG KONG’S longest-serving market regulator Ashley Alder is unexpectedly leaving his post to become chair of the UK’s Financial Conduct Authority, marking one of the highest-profile departures from the Asian financial hub.

Alder will take up the new role in January, the Securities and Futures Commission said in a statement on Friday (July 8). A recruitment exercise for his successor will start soon, the SFC said. 

Alder has been the SFC’s chief executive officer since October 2011, during which he also became chairman of the International Organization of Securities Commissions. His original term at the SFC was due to end in September 2023. 

His departure comes as the regulator faces an increasingly complex environment - with a new listing regime for blank-cheque companies, the emergence of digital assets, and green finance initiatives. The city is seeking to lure more initial public offerings, especially from mainland Chinese companies as political tension makes it harder for those firms to raise money in the US.   

“Ashley has been steadfast in his commitment and resolve in building a first-class regulatory framework with the highest standards to address the challenges and opportunities that Hong Kong face locally, regionally and globally,” SFC Chairman Tim Lui said in the statement. 

Alder initially resigned from the watchdog in late 2019 but the government invited him to stay for another term, citing the need for regulatory clarity during the pandemic. He was the highest-paid regulator in Hong Kong receiving more than US$1.3 million annually. By comparison, the former FCA Chair Charles Randell earned US$204,000 in the year ended March 2021, the UK watchdog’s annual report showed. 

One of Alder’s biggest challenges came in-house. Grappling with a brain drain due to emigration and job switches, the SFC lost 12 per cent of its employees last year, including 25 per cent of its junior professional staff.

The city’s banks, stock exchange, banking and audit regulators all shared the same difficulty as the financial hub faced record emigration following the 2019 protests and the subsequent introduction of a national security law. 

Under Alder, the SFC took a hard-line approach to market misconduct from top to bottom. Among actions under his watch, the regulator took steps to ensure fairness in the IPO market.  

SEE ALSO

HKEX loses 2 sustainability veterans, adding to turnover

In 2019, sponsor banks for IPOs were held explicitly accountable for the information in share-sale prospectuses, resulting in a US$100 million penalty for UBS Group, Morgan Stanley, Bank of America and Standard Chartered.

The regulator also tightened IPO requirements and trading supervision in the small-cap market, known as GEM, to root out extreme price swings and the so-called “ramp-and-dump” in thinly traded companies.

During the latter years, Alder was seen more focused on forging international regulatory cooperation and carbon initiatives in his role as chairman of IOSCO. 

“Ashley provided leadership to the SFC in the period of international regulatory changes following the global financial crisis, and also in working on the regulatory side of the Hong Kong-Mainland Stock Connect,” said KC Chan, Hong Kong’s former financial services and treasury secretary, who supervised the SFC during his tenure. BLOOMBERG