FT.com / FT Trading Room / Markets Regulation - Wheatley to step down from HK securities regulator

FT.com / FT Trading Room / Markets Regulation - Wheatley to step down from HK securities regulator: "Wheatley to step down from HK securities regulator"


By Robert Cookson in Hong Kong

Published: December 8 2010 13:32 | Last updated: December 8 2010 13:32

Martin Wheatley, chief executive of Hong Kong’s securities regulator, will step down in the summer after six years cracking down on market misconduct in the Chinese territory.

Mr Wheatley has become one of the world’s most influential regulators since joining the Securities and Futures Commission in 2005, gaining a reputation for tough but measured enforcement in the Asian financial hub.

Mr Wheatley, 51, announced on Wednesday that he would leave just before his contract with the SFC expires in September 2011. He said he had decided not to run for another term because “six years feels like a good point to return to the UK”.

A former deputy chief executive of the London Stock Exchange, Mr Wheatley is expected to have little trouble finding a new job at another regulator or a big exchange. He was in the running to be the chief executive of the LSE in 2001 but was passed over in favour of Clara Furse.

His exit comes as Hong Kong’s role in global finance continues to expand and as financial institutions beef up their presence in the city to access the rapid economic growth of Asia and in particular China.

“Martin Wheatley’s departure from the SFC will be a crossroads in Hong Kong regulatory reform,” said Alan Ewins, a partner at Allen & Overy. “The Hong Kong regime has started along the process of significant regulatory change under his stewardship.”

The SFC has gained a reputation as a force to be reckoned with in recent years.

In the last three years alone, the SFC has notched up 171 criminal convictions for market manipulation – representing 70 per cent of the total number of convictions since 1989.

In one of the most high-profile cases, Du Jun, a former managing director at Morgan Stanley Asia, was sentenced to seven years behind bars for insider trading.

In tandem with his role at the SFC, Mr Wheatley chairs a taskforce on short selling for the International Organisation of Securities Commissions.

Hong Kong won international recognition for being one of the few markets that did not ban short selling or impose other emergency restrictions during the financial crisis.

“[Mr Wheatley] has been a very steady hand,” said Martin Rogers of Clifford Chance in Hong Kong.

But Mr Wheatley has drawn criticism as well as praise. The SFC attracted public anger for failing to prevent the misselling of complex financial products that collapsed during the financial crisis. It has also been criticised for sometimes being too aggressive in its enforcement actions and for failing to work closely with the Hong Kong Monetary Authority.

This year the SFC has started investigating whether investment banks have failed to perform adequate due diligence on companies selling shares to investors in Hong Kong.

For the second year running, Hong Kong is on track to become the world’s biggest centre for initial public offerings, with more than $44bn raised on the city’s stock exchange so far in 2010.


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