We are seeing a substantial increase in demand for compliance recruitment in the buy-side industry here in Hong Kong. We believe this is due to three main factors:
1. The growth of the Asset Management Industry
The combination of financial market liberalisation, new fund passports, strong economic growth, fast developing capital markets and ageing populations creating pension opportunities have led to exceptional growth.
The Securities and Futures Commission’s quarterly report at the end of last year showed that the total assets under management of funds registered for sale in Hong Kong grew by 29.4% to $1.66 trn across equity, bond and mixed-asset funds.
2. Changes in the regulatory environment
While we are still seeing an impact from last year’s introduction of the Manager in Charge regime we must also prepare for the new Fund Manager Code of Conduct coming in November.
This updated regulation addresses disclosure to investors (including investors in offshore funds that are managed by Securities and Futures Commission’s licensees) and will provide greater transparency and global alignment.
3. Hong Kong is supporting firms’ expansion into China
The Mutual Recognition of Funds between Hong Kong and China established in 2015 and Hong Kong’s strong rule of law make it a very attractive asset management centre for mutual funds sold in China. It gives international companies a secure base to increase their coverage into China and access their assest management industry, valued at more than 100 trillion yuan.
Despite regulation creating a drop in growth last year, China is still the second largest economy in the world and as the bridge that links it with the rest of the world, over 60 of the top 100 global money managers now have a presence in Hong Kong.
China’s ‘opening up’ is only set to increase and although this will mean that it will be easier to go direct, early indicators show that companies will still favour a route through Hong Kong to obtain a wider spectrum of finance at different stages of the overseas investments. It will also give them access to a larger pool of bilingual talent and exemplary legal, accounting and professional support services firms. This will continue to drive growth in the country.
The impact on recruitment
In all areas, the increase in workload addressing new regulation and the greater amount of assets under management calls for a larger, more robust support infrastructure. For big, established Asset Managers, the continuing growth and tightening of different rules has driven the need to look at different areas of compliance. This has resulted in requirements for more specialist roles, often strengthening provisions in financial crime and improving controls and monitoring.
Alternative funds have found that growth and regulatory changes have put more pressure on their compliance requirements. Roles that have previously been satisfied by more junior staff now need more senior and credible Compliance Officers. Both the regulators and investors look to the ‘manager in charge’ wanting reassurance investments are in safe hands and this requires experience.
This level of recruitment needs local market specialists with a network of the best talent in the area with a true understanding of their skills, experience and motivating factors. This is what we have here at Danos Associates and if you are looking to develop your compliance and risk teams we are very well placed to help.
Tel: +(852) 2870 3007