SCMP Editorial

Editorial | At a time of turmoil, new SFC chief must shore up confidence

A global search is under way to find a replacement for Ashley Alder, the outgoing CEO of the Securities and Futures Commission, and local candidate Julia Leung fits the bill

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Julia Leung Fung-yee, deputy to outgoing chief executive officer Ashley Alder, is favoured among industry insiders for the job as next chief of the Securities and Futures Commission. Photo: Dickson Lee

SCMP Editorial

Published: 9:30pm, 30 Oct 2019Updated: 9:52pm, 30 Oct 2019

The search is on for the next chief of the Securities and Futures Commission. In the interest of transparency and fairness, an executive global recruitment exercise is under way. But there is already an excellent local candidate. Julia Leung Fung-yee, the deputy to outgoing chief executive officer Ashley Alder, is favoured among industry insiders for the job. In addition to her international exposure as a long-time journalist with The Asian Wall Street Journal, she had many years of experience working in senior positions at the Financial Services and the Treasury Bureau and the Monetary Authority, Hong Kong’s de facto central bank, before joining the SFC. She is well-regarded within the local financial industry.

But since Hong Kong is going through a crisis of confidence in the city’s leadership, it is worth the expense and trouble to put the most qualified candidate in a critical regulatory agency through a rigorous global contest, to make sure she is the best person for the job. The SFC has responsibilities to enforce the city’s financial rules, protect minority shareholders’ interests and work jointly with mainland Chinese authorities on cross-border corporate malfeasance. Among the challenges facing the new chief will be bringing to a satisfactory conclusion the ongoing prosecution of the so-called Enigma Network, allegedly the mastermind of one of the worst cases of financial fraud in local history.

During his nine years at the helm, Alder has stepped up enforcement and strengthened cooperation with the China Securities Regulatory Commission to target cross-border cases. He has also carried out useful reforms to streamline the structure of the SFC, which will put his successor in good stead when his contract ends next year. The CEO post is one of the most prestigious in the world, comparable to its counterparts in London and New York. It is also highly paid – about HK$10.23 million a year. Leung has not publicly thrown her hat into the ring. But if she is chosen, she will be the first local Chinese and woman to head the SFC since the CEO’s job was split from the chairmanship in 2006. Moreover, it will make her part of a global wave of women taking up some of the world’s most powerful jobs in international finance. Among them is Kristalina Georgieva, who became head of the International Monetary Fund this month by replacing Christine Lagarde, who will take up the top post at the European Central Bank next month.

At a time when Hong Kong is going through unprecedented political turmoil, the new head of the SFC needs to calm local markets, convince foreign investors that the city is still open for business and is as well-regulated as ever. This will require financial and regulatory expertise and political nous. Maintaining confidence in local financial markets despite the social unrest will be a priority.