By Alun John
HONG KONG (Reuters) - Remote working policies put in place by financial institutions due to the novel coronavirus outbreak have caused an increase in operational risk, according to Hong Kong' top securities watchdog.
The comments from Ashley Alder, chief executive of Hong Kong's Securities and Futures Commission (SFC) come as banks and regulators around the world are reviewing practices put in place during remote work, including some on-the-fly solutions, as many institutions consider returning to the office.
Amid widespread lockdowns, regulators relaxed rules which had required staff at financial institutions, particularly traders, to work from the office.
In March, the SFC allowed licensed individuals to carry out activities such as securities trading or giving investment advice from outside Hong Kong.
"Some of the technology infrastructure isn’t particularly well adapted to working from home... no doubt that there is an increase in operational risk, notwithstanding the fact that it has gone well so far," said Alder, who is also chair of the International Organization of Securities Commissions (IOSCO).
Alder, who was speaking at a virtual conference organised by the Asia Securities Industry & Financial Markets Association, said that regulators might not require financial institutions to return to previous arrangements when the pandemic is over.
"Working from home, with a degree of flexibility from regulators, went far better than we people would have thought, ... We do think that many of those operational accommodations may continue," he said.
"A regulatory conversation" was needed about how that could happen, he said.
Alder, who had previously said he would step down in September, was this month reappointed as CEO of the SFC for a further three years.
Before his reappointment he had been been linked to the role of chief executive of Britain's Financial Conduct Authority.