David Graham wins new HKEx post

Creation of a chief regulatory officer seen as key to the exchange's business diversification, while some worry about possible workload

PUBLISHED : Monday, 15 October, 2012, 12:00am
UPDATED : Monday, 15 October, 2012, 2:53am

The move by the Hong Kong exchange regulator to create the post of chief regulatory officer to oversee its listing division and all other regulatory, legal and compliance functions has received a mixed reception.

Hong Kong Exchanges and Clearing last week appointed David Graham as the first to take on the role.

Graham, who will join the exchange in January next year, is a lawyer with 30 years of experience.

He will become head of listing (designate) initially and succeed present head of listing Mark Dickens, who will retire in July next year.

Analysts said the move appeared to be aimed at enhancing HKEx's oversight of listing matters as it prepared for the regulations needed after its acquisition of the London Metal Exchange.

"Previously, HKEx focused on listings and securities trading, and the listing division played a key regulatory role," a senior exchange executive said.

"But now, it is adding commodities trading and over-the-counter clearing businesses and it is important to have a new regulatory division to handle the overall regulatory issues."

However, Sun Hung Kai executive director Joseph Tong Tang voiced some reservations over the move.

"The exchange needs professionals who have specialist knowledge, which is different from knowledge of commodities trading or clearing," Tong said.

"Having a single person to oversee the listing function as well as other regulatory functions may not be such a good idea as it may be too big a job for a single person to handle."

An investment banker who manages new listings said HKEx had lost a number of staff from its listing division and he was concerned that the retirement of Dickens would leave it with insufficient people with the required experience.

"Mr Graham is well known in the investment banking industry but he has never worked in HKEx," the banker said.

"As investment bankers, we would like to deal with people who have worked in the stock exchange for a long time as they know the exchange affairs well."

Graham, who has a master's degree in Jurisprudence from Oxford University, has more than 30 years of experience in legal and financial services.

He started his career with Freshfields Bruckhaus Deringer in Britain in 1982, was later promoted to partner and moved to Hong Kong in 1999.

He joined Morgan Stanley as general counsel, Asia ex-Japan, in 2001 and has been working in the financial services sector since then.

He was with UBS for several years and joined Nomura last year as global head of legal and general counsel in the wholesale division.

He was also a member of the Securities and Futures Commission's takeovers panel from 2001 to last year and a deputy chairman of the panel from 2005 to this year.

An SFC executive who worked with Graham welcomed his appointment.

"It was a good move to appoint an experienced lawyer with an international background to be the head of HKEx's new regulatory position," the executive said.

Graham's appointment to the new position is seen as part of the bigger restructuring of HKEx. In January, exchange chief executive Charles Li Xiaojia announced a strategy of diversifying beyond its core business of share trading and initial public offerings to developing commodities and clearing businesses.