“This clear signal from a broad, nonpartisan group in one of the world’s most important trading centers highlights the urgent need for a more globally consistent approach to regulation…. The current fragmentation is creating a regulatory environment that encourages more risky trading and financing activities in often unregulated domains, and allows for the exploitation of gaps in regulation globally… ”
—Fayez Choudhury, International Federation of Accountants CEO
On December 8, 2015, the International Federation of Accountants (Ifac) in cooperation with the Hong Kong Institute of Certified Public Accountants, put together in a roundtable forum some 30 senior executives and experts from regulatory agencies, financial markets, governments, academe, listed companies and the accounting profession to deliberate on the financial-regulatory environment.
The high-powered discussions led to some consensus, identification of significant concerns for further debate, and a direction to promote a global regulatory system that will be conducive to
long-term growth.
A well-written and concise set of 10 principles was prepared to serve as guideposts to regulators “for better decisions and protect the global economy from the dangers posed by a patchwork approach to regulation.” In sum, the 10 principles are:
- Clear objectives in the public interest
- Proportionate and balanced approach
- Evidence-based assessments
- Appropriate resourcing
- Collaborative actions
- Consistent and coherent regulations
- Transparent and open consultation
- Active oversight
- Systematic review
- Deliberate enforcement
Going through the summary report of the forum makes me ponder on our own regulatory landscape.
The 10 principles fit well as “musts” for our jurisdiction.
We should focus on public interest and not on vested interest.
Regulations should be of the same standards and of consistent applications.
Interrelated agencies should have common guideposts and not varying interpretations anywhere in the country.
Oversight function should be immediately enforced and not much later. Transparency and openness to all entities of interest should be always observed without exception—no un-numbered/“restricted” rulings or “customized” resolutions.
Post-transactions review should be done following systematic and time-bound processes with expectations on requirements clearly identified at the outset, if needed. If review were to be done at random, the same should be done in an orderly manner observing best practices.
As in any undertaking, the framework, organization, necessary resources and determination to make things happen should be in place to meet expectations. Before commenting on how we can fully adopt the 10 principles, we should assess where we are and then, chart how do we get to the desired level of regulation. I hope we can do things sooner than later.
****
Dr. Conchita L. Manabat is the president of the Development Center for Finance and a trustee of the Finex Research & Development Foundation. A past chairman of the International Association of Financial Executives Institutes, she now serves as the chairman of the Advisory Council of the said organization.
She is also a member of the Consultative Advisory Groups of the International Auditing & Assurance Standards Board and the International Ethics Standards Board for Accountants.
She can be reached at clmanabat@gmail.com.
