HONG KONG: Financial firms in Hong Kong are scrambling to fortify their compliance operations following US sanctions and China’s new national security law, even as the sector pushes to cut costs amid the coronavirus pandemic.
This underscores the growing challenges for firms operating in the Asian financial hub, which was roiled last year by often-violent pro-democracy, anti-China protests and is now in the crosshairs of mounting Sino-US tensions.
International asset managers and Asian banks have stepped up compliance hiring, while some are training existing staff and buying new technology to offset a talent crunch as candidates are unwilling to relocate amid the health crisis and the uncertainty in Hong Kong, bankers, lawyers and headhunters said.
Demand for compliance staff has risen by as much as a third from a few months earlier, two headhunters said.
“In the past three months we’ve had demand from top-tier asset managers looking for regulatory compliance lawyers because they need experts in place when the US and China keep slapping sanctions on each other,” said Olga Yung, regional director at recruiter Michael Page Hong Kong.
Because sanctions are a “niche area”, companies are hiring lawyers with some sanctions expertise and supplementing with external law firms, she said.
The United States has imposed sanctions on Hong Kong’s Chief Executive Carrie Lam and 10 other officials for what it says is their role in curtailing political freedoms in the territory.
The sanctions came after Beijing imposed in late June a sweeping security law on Hong Kong, targeting seditious and subversive activities.
A senior banker at an Asian lender in Hong Kong said he gave his compliance team a list of individuals and businesses linked to the sanctioned officials and “the immediate response was to either close all those accounts or hire five more sanction-specialists to do a proper audit”.
The banker, declining to be named because the information was private, said they decided to hire two experts and organise sanctions training for the rest of the team, despite a company-wide attempt to limit spending.
— Reuters
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