Senior securities regulators across the Asia-Pacific region have revealed that “cyber risk and operational resilience” will dominate their list of priorities in 2022. A poll by Regulatory Intelligence found that economic recovery from the COVID-19 pandemic had dropped to third on the list of major concerns.
In a shift from the previous year, environmental, social and governance (ESG) issues have risen to second place overall on the list of regional regulatory priorities.
Some of the other major priorities will include digital assets, innovation and fintech; fraud and financial crime; and cross-border regulatory cooperation.
The focus on cyber risk and resilience comes as countries look towards the recovery from the financial impacts of the COVID-19 pandemic. Regulators are growing increasingly concerned about the potential for a major cyber outage that could wreak havoc with their recovering securities markets.
The recent discovery of vulnerabilities with the Log4j software in most Windows-based computers has highlighted the world’s susceptibility to a major and catastrophic cyber-attack. Log4j is open-source software that is distributed by the Apache Software Foundation.
Green finance is a growing priority for securities regulators across the Asia-Pacific region as climate risk and other environmental concerns continue to escalate. Late last year Hong Kong detailed its plans to become a critical centre for green finance.
The Green and Sustainable Finance Cross-Agency Steering Group (Steering Group) set up a new centre to assist in the investment push towards carbon neutrality. The Centre for Green and Sustainable Finance (GSF) will be used to coordinate this push.
Ashley Alder, chief executive of the Securities and Futures Commission (SFC), said Hong Kong was well-positioned to play a vital role in bridging the gap between Chinese and Western investors.
“Carbon trading will be a key tool to mobilise finance for the transition to a low-carbon economy. With Hong Kong’s world-class regulatory standards and its instrumental role in bridging international capital flows with Mainland markets, it is well placed to make a significant contribution to the global effort to develop and scale carbon markets,” Alder said.
The threat of fraud and financial crime also remains a high-level concern for securities regulators in 2022. Fraud at Wirecard, the oncefeted German fintech, and the collapse of Greensill, a supply chain financier, have highlighted the risk that accounting and auditing scandals can pose to the health and reputation of securities markets.
Top regional priorities for securities regulations in 2020:
Julia Leung, deputy chief executive, Securities and Futures Commission, Hong Kong
1. Cyber and operational resilience
2. Environmental, social and governance (ESG) issues
3. Fraud and financial crime
4. COVID-19 recovery and economic resilience
5. Digital assets, innovation and fintech
Cathie Armour, commissioner, Australian Securities and Investments Commission
1. Cyber risk
2. Environmental, social and governance (ESG) issues
3. COVID-19 recovery and economic resilience
4. Digital assets, innovation and fintech
5. Fraud and financial crime
Lim Tuang Lee, assistant managing director, Monetary Authority of Singapore
1. Cyber risk and operational resilience
2. Environmental, social and governance (ESG) issues
3. Digital assets, innovation and fintech
4. Fraud and financial crime
5. COVID-19 recovery
Ruenvadee Suwanmongkol, secretary-general, Securities and Exchange Commission
1. COVID-19 recovery and economic resilience
2. Environmental, social and governance (ESG) issues
3. Digital assets, innovation and fintech
4. Cross-border regulatory cooperation
5. Fraud and financial crime
About the author
Nathan Lynch is managing editor, APAC, for Thomson Reuters Regulatory Intelligence.
Nathan Lynch is an experienced writer, public speaker, manager and technology enthusiast in the field of financial regulation and risk management. At Thomson Reuters, Nathan leads a team of experts who provide breaking news, deep analysis and practical guidance to risk practitioners in the global financial services sector.
Nathan manages Thomson Reuters’ award-winning Regulatory Intelligence team across the Asia-Pacific region, tracking developments in financial services law, regulation, financial crime and risk management.
Nathan has been involved in building innovative, tech-based businesses in the financial services “regtech” sector — including Complinet Australia and the Thomson Reuters Risk business.
