Director, Asia-Pacific Research Exchange, CFA Institute

As the director of CFA Institute Asia-Pacific Research Exchange I am responsible advocating the platform to CFA members and relevant stakeholders; managing relationships and thought leadership contributions from universities, institutions and regulators; organizing forums and symposiums across the region.

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  • Overview of Hong Kong Financial Services Industry

    Scott Lee    Financial Services Development Council (FSDC)
    12 Jun 2018

    The Financial Services Development Council (FSDC) released an updated version of the “Overview of Hong Kong Financial Services Industry” in May 2018 which aims to facilitate industry practitioners and the wider public to understand and promote the strengths of Hong Kong as an international financial centre. The report covers the below sessions:

    Why Hong Kong?
    Being one of the world's most competitive and freest economy, Hong Kong possesses advantages like the strategic location and gateway to Mainland China, key conduit for investment and trade linked exchange rate system, bilingual legal system and simple tax regime, deep pool of talent and centre of expertise.

    Asset and Wealth Management 
    As the leading fund management centre in Asia Hong Kong has a diversified distribution of fund management and advisory business, an active ETF market and a sizable pension fund market. The soon-to-be-introduced open-ended fund companies structure will further promote Hong Kong as the Asian asset management centre for both conventional funds and PE funds.

    Hong Kong has a robust banking industry by international standards and is regarded as the global offshore RMB hub. The Hong Kong Government is exploring with the Mainland authorities ways to open up more channels for two-way cross-border RMB fund flows.

    Capital Markets
    With HKEX being the leading stock exchange in fundraising (2015-2017) and diversified listed companies and investors, Hong Kong is looking to increase connectivity with Mainland investors and the Mainland market.

    Hong Kong ranks 1st in Asia in insurance density and 2nd in Asia in insurance penetration in 2016. Government has recently taken a number of initiatives to promote the insurance sector which includes the establishment of insurance authority, HK$100mn 3-year pilot programme for talent development and the adoption of FinTech on the development of personalized products.

    Fintech and Green Finance
    FinTech cooperation agreements signed with partners such as Australia, Dubai, Gibraltar, Singapore, Switzerland and the UK. On the other hand, HKMA, Cyberport in Hong Kong and the the Office of Financial Development Service of Shenzhen (OFDS) are exploring the feasibility of establishing cross-border soft-landing facilities in Shenzhen, encouraging Hong Kong FinTech firms to expand their businesses, and Mainland firms to establish themselves in Hong Kong.

    Professional Services & Financial Infrastructure
    Half of the Global 100 law firms and 1,400 regional headquarters of consultancy firms are set up in Hong Kong. With a well-established payment & settlement system and bilingual legal system, Hong Kong has the increasing prevalence of being the Alternative Dispute Resolution (ADR) forum. Meanwhile the Belt and Road Initiative will drive significant demand in Hong Kong’s world-class professional services.
  • CFA Institute and PRI survey on ESG integration in Asia

    Scott Lee    Justin Sloggett, CFA, Matt Orsagh, CFA
    24 May 2018

    CFA Institute and PRI survey on ESG integration in Asia
    In 2017, CFA Institute and the PRI agreed to undertake an ESG investing study that entails a survey, a series of workshops and the release of four reports: one case study report and three regional reports. The aim of the study is: 

    1. to understand the current state of ESG investing in listed equity and fixed income across the AMER, EMEA and APAC regions; 
    2. to analyse the drivers, barriers and solutions of ESG investing.

    We would like you to help us by responding to the survey:

    The results of the study and the feedback from the workshops will be published in the regional reports. There will also be regional and country guidance and case studies on how investors are integrating ESG issues into their investment analysis and decisions. These reports will be readily available for all CFA members and PRI signatories.
    The survey contains two sets of questions that should take roughly 8 – 10 minutes to complete. It covers the impact of ESG investing at the financial market level and firm level. It is being completed by participants across seventeen countries.
    If you like to fill out the survey, please do so by 15 June. We appreciate your response.


    ESG Integration Explained: An Alpha-Generating and Risk-Reducing Tool

    The term “ESG integration” is often used when talking about ESG investing. Practitioners new to ESG investing are sometimes uncertain what ESG integration is and how it is performed—so much so that they may not realize they are already performing integration techniques informally.

    One definition of ESG integration is “the explicit and systematic inclusion of ESG issues in investment analysis and investment decisions.” Put another way, ESG integration is the analysis of all material factors in investment analysis and investment decisions, including environmental, social, and governance (ESG) factors.

    What does that mean? It means that leading practitioners are:

    • analyzing financial information and ESG information;
    • identifying material financial factors and ESG factors;
    • assessing the potential impact of material financial factors and ESG factors on economic, country, sector, and company performance; and
    • making investment decisions that include considerations of all material factors, including ESG factors.

    What does that not mean? It does not mean that

    • certain sectors, countries, and companies are prohibited from investing;
    • traditional financial factors are ignored (e.g., interest risk is still a significant part of credit analysis);
    • every ESG issue for every company/issuer must be assessed and valued;
    • every investment decision is affected by ESG issues;
    • major changes to your investment process are necessary; and, finally and most importantly, 
    • portfolio returns are sacrificed to perform ESG integration techniques.
  • Safeguards against the Introduction of a Dual-Class Shares Structure

    Scott Lee    Rocky Tung, Mary Leung, CFA
    17 May 2018

    Safeguards against the Introduction of a Dual-Class Shares Structure
    As revealed in a survey conducted in Asia Pacific by CFA Institute in March, a majority (60%) of the 450-plus respondents have not had any experience investing in firms with a DCS structure, which signalled the urgency for and need to educate investors and the general public on the implications of DCS structures.

    The survey, “Dual-Class Shares and the Demand for Safeguards,” revealed that respondents in the region were divided when asked whether DCS structures should be introduced to the market, with 53% opposing the introduction and 47% in favour. Regardless of their position on DCS, almost all (97%) respondents considered it necessary to enact additional safeguards if DCS structures are permitted.

    Among different possible safeguards, more than 90% of respondents considered it appropriate to implement enhanced mandatory corporate governance measures as well as time- and event-based sunset provisions, such as automatic conversion of shares with super voting rights to ordinary voting rights. Specifically, 94% of respondents considered it appropriate to introduce a time-based sunset provision; among which, 91% of such respondents considered it appropriate to convert shares with super voting rights to ordinary shares within 10 years. Separately, 93% of respondents considered introducing a maximum voting differential appropriate; 63% of these respondents found a 2:1 maximum voting differential optimal.

  • Two insightful reports on Fintech and Distributed Ledger Technology (DLT) by Financial Services Development Council (FSDC)

    Scott Lee    Financial Services Development Council (FSDC)
    13 Jun 2017

    Given most of the FinTech innovations, in particular the DLT, are developed for providing services directly to consumers, FinTech has initially been regarded as disruptive to the established financial institutions. However, a more recent development is that increasingly FinTech innovations are developed by, and in collaboration with, the well established incumbents in the financial sector. There are two very insightful reports on FinTech and DLT published by the FSDC in May 2017; which covers extensively the following areas including cybersecurity, payment and securities settlement, digital ID and KYC utility, WealthTech and InsurTech (including data analytics, automation and artificial intelligence), RegTech as well as Distributed Ledger Technology.  

    Attached are the two links to these two reports by FSDC.
  • Presentation deck of ARX seminar - Stock Market Efficiency, Participants and Investment Delegation

    Scott Lee    Yeguang Chi
    09 Jun 2017

    Presentation deck of CFA China Shanghai seminar - Stock Market Efficiency, Participants and Investment Delegation

    In December 2016 CFA Institute supported the 29th Australasian Finance and Banking Conference by sponsoring two research awards in Banking / Finance / Investment Management in Asia-Pacific markets and the winner of the first prize goes to Yeguang Chi, associate professor of Shanghai Jiaotong University SAIF.

    In addition to uploading Professor Chi’s winning paper “Private Information in the Chinese Stock Market: Evidence from Mutual Funds and Corporate Insiders onto ARX, to bridge the gap between academics and practitioners we have created a Practitioner’s Brief, a short practitioner-focused digest of the research paper and an accompanying video edition of that digest.  The brief and video were well received and CFA China Shanghai decided to bring it to life by hosting the first o2o seminar on June 6.

    During the event Professor Chi first illustrated the conditions of China’s stock market in terms of trading volume of retail investors and performance of mutual funds. Then he presented his research findings on how and why mutual funds and institutional investors in China outperform the market, highlighted the disadvantages retail investors possess in a considerably inefficient market and encouraged retail investors in China to consider delegate the investment decision to fund managers, trade less or to go for passive investments. Meanwhile he also urged for more disclosures on private meetings and stronger enforcement against insider trades to enhance market efficiency.

    Professor Chi's presentation deck can be downloaded in the attached.
  • Leviathan Inc. and Corporate Environmental Engagement

    Scott Lee    Hao Liang, Pedro P. Matos, Po-Hsuan Hsu
    14 May 2017

    In a special report in 2010, The Economist called the resurgence of state-owned mega-enterprises, especially those in emerging economies, “Leviathan Inc.”, and warned about the dangers of the state capitalism model. Traditionally, state-owned firms have been criticized for poor governance and questionable efficiency. In fact, they may be better positioned to deal with market failures and externalities. Our findings based on publicly-listed firms in 45 countries suggest that government-controlled companies engage more in environmental issues, and this engagement does not come at a cost to shareholder value. The effect is more pronounced among firms in emerging market economies and in countries with higher energy risks. The effect is attributable to ownership stakes held directly by domestic governments, rather than to foreign state ownership or investment via sovereign wealth funds. Difference-in-differences estimates show that state-owned firms reacted more significantly to the 2009 Copenhagen Accord in improving their environmental performance. Interestingly, state-owned firms also engage more in social issues, but they do not reveal better corporate governance performance. 
  • Presentation deck on Key Sustainable & Green Finance Trends during ARX ESG forum  April 2017

    Scott Lee    Martina Macpherson
    04 May 2017

    CFA Institute Asia-Pacific Research Exchange ESG series kicked-start in Hong Kong - Green Finance Forum
    On 27 April, CFA Institute co-hosted a green finance forum with the Hong Kong Society of Financial Analysts and the Hong Kong Financial Services Development Council (FSDC), a high-level government advisory body that conducts policy research and industry surveys for the formulation of proposals to the Government and regulators.  This is the second green finance forum organized by CFA Institute in Hong Kong, ARX’s second o2o event as well as ARX’s ESG Track maiden event. The forum attracted 140 attendees including CFA members, industry practitioners, think tanks, environmental and other NGOs.
    The evening began with a keynote speech delivered by Martina Macpherson, S&P Dow Jones Indices Head of Sustainability Indices on an overview of green finance and ESG trends. Up next Mary Leung, Head of Standards and Advocacy for CFA Institute Asia Pacific led a panel discussion featuring Martina and ESG experts from PwC, HSBC and AXA Investment Managers focusing on the intrinsic value of ESG. 

    The PowerPoint Presentation of Martina's keynote speech can be downloaded in the attachment.

    Overall the event was a great success with very positive feedbacks from both participants and panelists.  The next stop for the CFA Institute Asia-Pacific Research Exchange ESG Series will take place in Singapore on the 11th May 2017.
  • 中国金融行业人才发展报告

    Scott Lee    CFA Institute
    05 Oct 2016

    处于经济转型期的中国金融业正面临新的机遇和挑战,金融机构及业内人才如何才能把握机遇应对挑战? 为此CFA Institute、罗兰贝格管理咨询公司、LinkedIn三方合力制定中国金融行业人才发展报告, 旨在为金融业内机构及业内人才提供有益参考
  • Financial Talent Development in China 2016

    Scott Lee    CFA Institute
    05 Oct 2016

    In the period of economic transformation, China’s financial sector is facing new opportunities and challenges. How should financial institutions and those who work in the financial sector grasp the opportunities and cope with the challenges? CFA Institute together with Roland Berger Strategy Consultants and LinkedIn constructed a talent report with intention to provide financial institutions and those who work in the financial sector with a helpful reference.