Recently, we have seen significant financial developments in the APAC region in the areas of crypto assets, ESG and sustainable finance. Compared to the likes of Europe and America, Hong Kong, Singapore and China, in particular, have been very successful in fostering a culture of compliance amongst local companies. But how has this been achieved?


The road to cooperation and compliance


There are many different factors to consider when looking at the introduction of new financial regulations as well as issues of broader compliance. These include:-


Establishing clear regulations


We know that authorities in Hong Kong have been very proactive concerning discussions with the business community before introducing new financial regulations. This ensures that proposed regulations are achievable and companies are willing and, more importantly, in a position to comply.


Regular audits


What many companies say in public can vary markedly from what they do behind the scenes. Consequently, in line with the introduction of clear regulations, there must be regular means of auditing both public and private operations. This "encourages" those involved to be as proactive behind the scenes as they may appear in the media.


Penalties for non-compliance


Part of the carrot-and-stick strategy of introducing new regulations is the fallback of penalties for non-compliance. Regarding ESG and sustainable finance, there will be physical and financial penalties from governments and regulators and broader business penalties from the investment community. History shows that companies are more likely to comply with new regulations if the alternative involves a financial hit!


Education and training


This is especially important in the short, medium and longer term. We have already seen the introduction of education and training tax breaks in Hong Kong, which will significantly impact areas such as crypto trading, ESG and sustainable finance. This element of compliance can dramatically increase the quality and value of the underlying workforce going forwards.


Culture of compliance


As we touched on above, fostering a culture of compliance is crucial whether looking at finance, manufacturing or any other industry. The more we see a "them and us" scenario, the less chance of potentially ground-breaking innovation. But, again, this is another area in which the APAC region excels;the ability to be innovative and forward-thinking.




This concept has increased in importance over recent years and is now part of legal legislation in many countries. It is crucial that whistleblowers are afforded a degree of anonymity when looking to make the authorities aware of lawbreaking and unethical activities. In many cases, the simple threat that a whistleblower will go to the authorities is enough to keep companies on the “straight and narrow”.




Regarding new financial regulations, the APAC region is more successful than most in forging a culture of compliance. As we touched on above, there are numerous ways in which you can encourage compliance, but ultimately, all parties need to work together. The more "us and them" scenarios, the less cooperation and innovation, although financial penalties can make a difference!

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