Hong Kong’s Top Securities Regulator Alder to Leave in 2020

(Bloomberg) -- Ashley Alder, chief executive officer of Hong Kong’s Securities and Futures Commission,​ will step down at the end of his contract in September 2020.

The watchdog’s head announced his decision Monday in internal communications, according to people with knowledge of the matter, who asked not to be identified because they’re not authorized to speak publicly. The government will begin a global search for Alder’s replacement, the people said.

Alder has spent eight years overseeing one of the world’s biggest stock markets, a financial hub which over that period has cemented itself as the global gateway to China. His tenure included the start of trading links with the mainland as well as the controversial introduction of dual-class shares. In recent years, his agency has focused on trying to root out bad behavior among the city’s small-cap companies.

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Under Alder, the SFC has “pursued a set of intensive policy and operational reforms to tackle market risks as well as setting itself as a tough, competent and effective market regulator,” the commission said in a statement. It was Alder’s decision to leave, it said.

Also the chairman of the International Organization of Securities Commissions, Alder became known for his hard-line stance toward misbehaving firms, fining HSBC Holdings Plc a record HK$400 million ($51 million) over the sales of structured products linked to Lehman Brothers Holdings Inc. in Hong Kong.

In 2013, the SFC changed its rules to make underwriters more explicitly accountable for the quality of initial public offerings in the city, and it warned firms that they could be held criminally liable for the accuracy of share-sale prospectuses. The regulator also asked banks to improve underwriting standards and ask tougher questions when examining the accounts of would-be applicants.

Earlier this year a number of international banks including UBS Group AG and Morgan Stanley agreed to pay a combined HK$787 million to settle cases related to their IPO work. UBS was also banned from sponsoring IPOs in the city for 12 months.

Notable SFC fines

​“Alder did a very good job not only in the local market but, owing to his role at IOSCO, to raise Hong Kong’s status and credibility in the international arena,” said Clement Chan, a non-executive SFC director and managing director of assurance at BDO Ltd.

Alder started his career as a London-based lawyer in ​1984, before moving to Hong Kong. In an earlier stint at the SFC he oversaw the agency’s corporate finance division from 2001 to 2004. Prior to taking his current role he was head of Asia at the U.K. law firm then called Herbert Smith LLP.

During his time in charge of the SFC, Alder also revamped the commission’s internal team structure, including the establishment of ICE -- Intermediaries, Corporates, Enforcement -- a cross-divisional working group intended to tackle corporate misconduct and protect investors. That put him at odds with much of the industry, with brokers adorning an image of his face with devil’s horns for a mass rally three years ago.

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Hong Kong’s financial secretary will chair a selection panel with SFC chairman Tim Lui and other senior officials to identify a new CEO, a spokesman said.

As economic ties between Hong Kong and mainland China increase, the commission’s next head will need to navigate political relations, and balance regulation with market innovation.

--With assistance from Daniel Taub.

To contact the reporter on this story: Kiuyan Wong in Hong Kong at kwong739@bloomberg.net

To contact the editors responsible for this story: Candice Zachariahs at czachariahs2@bloomberg.net, Sam Mamudi, Benjamin Robertson

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