Eugenie Shen has been named as the head a new regional asset management group launched by the Asia Securities Industry and Financial Markets Association (ASIFMA), which will advocate the needs of buy-side traders in Asia.
Until now, ASIFMA has chiefly represented the interests of Asia’s sell-side.
“There will be issues where buy-side and sell-side are completely in sync, and others where buy- and sell-sides may have different interests and we will try to work these out with each other, particularly since ASIFMA now has both sides represented,” said Shen
She explained the areas where she expects lobbying to be undertaken on behalf of buy-side traders.
“When
firms are dealing with ASEAN equities and bonds in Indonesia, Malaysia, and to
some extent Singapore, the price paid by the buy-side often involves a spread
charge,” she said. “This is due to the lack of liquidity in some of the Asian
currency securities, which is something that the group would like to address.
There may not be a solution to this beyond broadening and deepening the
region’s capital markets, but we will be exploring ways to improve liquidity in
local currency securities, such as looking at changing trading restrictions,
minimum–size order requirements and other factors that affect liquidity.”
The group will be covering the non-Japan Asia region, looking at pan-Asian issues such as fund passports, disclosure requirements and other initiatives that help grow cross-border business. For country-specific issues, it plans to partner with existing local trade associations to lobby and make recommendations in much the same way that ASIFMA brings its sell-side experience gathered in more developed markets to help shape developing market infrastructure.
Focus areas will be driven by members and to the extent that specific local buy-side issues have an effect on those firms, the group will become involved.
“Another
buy-side trading issue is that of the fixing of the currency exchange rate for
Asian non-deliverable currencies, such as the Indonesian rupiah,” she said.
“Traders want to see more transparency on how these rates are set.”
Shen has joined from PineBridge Investments, where she was chief legal officer. ASIFMA’s asset management group, which is oriented towards long-only managers, has launched with 15 members comprising of many leading asset managers, including AllianceBernstein, Amundi Asset Management, BlackRock and Eastspring Investments.
The group is led by a steering committee chaired by Kai Sotorp, head of Asia Pacific at UBS Asset Management, with vice-chairmen, Ajai Kaul and Jed Laskowitz, the Asia Pacific CEOs of Alliance Bernstein and JP Morgan Asset Management respectively.
In 2013, ASIFMA was involved in the creation of the buy-side template to deal with Hong Kong’s electronic trading rules. Shen perceives more opportunities to become involved with local regulators to assist buy-side interests.
“While
there is standardised regulation throughout much of Europe, there is no
single regulatory regime in Asia, which means that conducting cross-border
business within Asia is much more difficult. Regional firms have to
contend with different regulatory requirements of each of the countries in the
region. As a regional industry association, we seek to promote more regulatory
harmonisation, such as standardisation of disclosure requirements, which would
reduce costs and offer more choices that would benefit investors.”