Often the client queries are on the intangible - why the regulator is approaching issues or matters a certain way and how the HKMA operates internally.
I was struck by the disparity between what regulators are thinking about versus what clients are asking about in practice. The bank resolution is a good example to cite for this, the discussion at the regulators end would be a very technical one – how the legislation should look like and the policies backing it, but with clients the practical cross border elements are almost always the most important ones. You respond to very practical questions like if they had a resolution action at headquarter level, what would happen if someone in Hong Kong was a counterparty and insisted on terminating a relevant contract; or “Do I need to change my contracts to cater for this?”
There is sometimes a bit of misalignment in the thought process for regulators and for clients. The regulators have a very tough job but they don’t operate in a day-to-day business environment the way clients do. So with my experience, I advise clients on what I think the regulators’ objective is, what the policy is about and the practical implications which the regulators may not have filtered off; it’s important to ensure that we are providing practical advice that still keeps the client’s business compliant.
There is another angle which people forget which is the politics of it all – when a regulator wants to put in new rules, they have to approach the Legislative Council (LegCo) to get them passed, and there’s always a concern at the back of their minds on how what is proposed will be perceived by politicians and the general public.
For now, no two pieces of work I have received so far have been the same, which has made this practice very interesting to be in. It’s such a broad area, and questions I’ve fielded range from almost operational (reviewing to make sure operation models are compliant with supervisory policies) to a lot of cross-border work where there is a Hong Kong element and in determining whether or not a certain activity will be regulated in Hong Kong.
There’s also a lot of interesting work coming out of the fintech sphere, where companies are developing payment systems with blockchain elements, and on the insurance regulatory space, particularly from offshore insurers planning on activities in Hong Kong.