Heavy hitters join Hong Kong regulator's products committee

Hong Kong has taken the next step in its campaign to prevent minibond- or equity-accumulator-type blow-ups from happening again and ensure investors are sold suitable products.

It will be a challenging task requiring a high level of competence, experience and discipline. So it’s entirely appropriate to see some very familiar and respected names peopling the new Products Advisory Committee (PAC) announced yesterday by the Securities and Futures Commission. 

They span the spectrum of the industry, from fund managers (Blair Pickerell, former Asia chief executive of Morgan Stanley Investment Management); to alternatives specialists (Au King Lun, general manager and head of asset management at Bank of China Hong Kong); to pension and trust service providers (Lau Ka-shi of Bank Consortium Trust); to bankers (Andrew Fung, Hang Seng Bank’s head of investment and insurance); to treasurers (Jacob Tsang of the Hong Kong Jockey Club); to legal experts (Ferheen Mahomed, Asia general counsel of Société Générale).

The PAC is chaired by Alexa Lam, the SFC’s deputy chief executive and executive director of its policy, China and investment products division. She is joined by four other SFC officials.

The committee was set up “with a view to rationalising the regulation of products being offered to the public”. The move follows the SFC’s publication in May of its Consultation Conclusions on Proposals to Enhance Protection for the Investing Public and the subsequent introduction of the new SFC Handbook for Unit Trusts and Mutual Funds, Investment-Linked Assurance Schemes and Unlisted Structured Investment Products.

The PAC replaces the existing Committee on Unit Trusts and Committee on Investment-Linked Assurance and Pooled Retirement Funds. The new committee may be consulted on a wide range of matters, including overall market environment, industry practices and novel product features.

Depending on the issues under consideration, the SFC may convene a meeting of all or any sub-group of the PAC members with the relevant experience or background. The members have been appointed for a term of a year-and-a-half, ending on March 31, 2012.

Clearly the experience is there to help avoid the kind of problems seen in the past. Of course, there’s no accounting for the behaviour of the investing public – wealthy, professional or otherwise.