Private Debt Investor Quotes Anne-Marie Godfrey on ESG and Regulatory Challenges for Asia Fund Managers

For its article “Regulators tighten the screws,” Private Debt Investor quoted Akin Gump Hong Kong investment management partner Anne-Marie Godfrey on some of the regulatory challenges facing fund managers in Asia.

On the topic of cybersecurity, Godfrey noted that the Hong Kong Securities & Futures Commission (SFC) is “super-focused” on it, publishing a number of guidelines on that. She said, “They see it as a really big risk, which it is, and they are really trying to stay on top of it. It is an issue that comes up again and again in inspections, and every licensed manager has to have a manager in charge responsible for the IT department who has personal accountability to the SFC for what happens in the IT department.”

Speaking on regional challenges, Godfrey discussed the regulatory angle: “The problem with Asia is that, unlike the EU - where some countries are more developed than others, but they are all required to implement the same rules - here there is no level playing field and things are very fragmented.” She added that, irrespective of the number of passporting initiatives, “there is always going to be this fragmentation from a regulatory perspective, and there is, of course, rivalry between Hong Kong and Singapore to be Asia's leading financial centre.”

Finally, on the topic of environmental, social and governance, or ESG, investing, Godfrey referred to it as “a real buzzword” currently and said, “The SFC launched a strategic framework for green finance in September 2018 and following on from that did a survey of asset managers in Hong Kong. They now intend to deliver a new set of expectations of asset managers in the near term, covering areas such as governance and oversight, risk and disclosure with a focus on environmental risks, which credit managers will also be subject to.”