Asia Securities Industry & Financial Markets Association (Asifma) has said that the extraterritorial aspects of various European Union (EU) regulations – currently being implemented – are likely to have a "particularly onerous effect on entities established in Asian jurisdictions".
In Europe, authorities frequently try to install equivalence determinations in legislation with an extraterritorial reach, according to Asifma. Once an entity established in a jurisdiction is deemed equivalent or granted reciprocal access to EU entities, it is not required to comply with EU regulation while dealing with EU firms.
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According to Asifma, this causes problems for firms established in countries without Group of 20 (G-20) commitments or in countries that may adopt G-20 commitments in a manner different enough from the EU to be judged non-equivalent.
Asifma has released an Asia-focused update to material examining the extraterritorial impact of EU and US legislation originally published in April 2012 by parent body, the Global Financial Markets Association.
In the update, Asifma also highlights the difficulties in meeting equivalence that arise from Asia’s "fragmented" regulatory landscape.
Asifma’s Hong Kong-based chief executive, Mark Austen, said Asifma’s main concerns surround "inappropriate" extraterritoriality of the legislation and lack of co-ordination.
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By GlobalData"We are primarily concerned about regulation that is inappropriately extraterritorial in effect and regulation that diverges significantly between major financial centres," Austen said.
