The interconnectedness of financial jurisdictions was the central theme at the inaugural forum on financial regulation between the EU authorities and members of the Iosco Asia Pacific Regional Committee (APRC).
Hosted by the Monetary Authority of Singapore (Mas), deputy managing director Ong Chong Tee opened the session with a keynote address.
“Asia Pacific jurisdictions including Singapore play host to many European financial institutions which are active and significant participants in our respective financial markets. Such cross-border and cross-region participation have benefitted both regions.”
Investment growth
Ong cited the substantial growth in portfolio assets held by the five largest EU economies in the Asia Pacific region, and vice-versa, as one example.
“For instance, Europe’s Capital Markets Union project is an exciting development which we look forward to learning more about from our European colleagues."
According to IMF statistics, investors from France, Germany, Italy, Spain, and the UK held $820bn (£672bn, €744bn) in portfolio assets in Asia Pacific in December 2015, up from $240bn in December 2001.
Conversely, “portfolio investment assets from the Asia and Pacific region in these same European markets have grown from $420bn to over $930bn”, Ong said.
“Developments in each of our jurisdiction and region can have a significant spill-over impact on the other.”
Mutual appreciation
Ong continued: “Beyond just standards and rules, regulatory cooperation can promote appreciation for each other’s regulatory framework, and to lay the foundation for an outcomes-based approach in equivalence assessments.
“This was […] seen in September 2016 with the positive opinion issued by ESMA on the grant of the AIFMD passport to Singapore and other Asia Pacific jurisdictions.”
In his closing remarks, Ong admitted that regulators are confronting a wide range of issues.
“This event is an excellent showcase of how regulators can come together to share our experiences and to keep each other apprised of developments in our respective regions.
“For instance, Europe’s Capital Markets Union project is an exciting development which we look forward to learning more about from our European colleagues. With various market integration initiatives also underway in Asia, there is room for us to exchange views and to learn from each other.”
