Power Plays from the Fringe

Implementation of global derivatives reforms and the extraterritorial application of US and EU regulations in East Asia have generated political interplays unfolded at inter-state and domestic levels. Leading jurisdictions such as Japan, Singapore, and Hong Kong have exercised “power-as-autonomy” in an attempt to push back and delay the reform agendas spearheaded by global standard-setting bodies and the leading powers. Through leveraging the influence of Asian-based foreign dealers and exploiting the transatlantic disagreements, the Asian authorities have gained some rule-making autonomy in introducing derivatives reforms in local markets. This, however, was also driven by a competitive dynamic between individual Asian jurisdictions to promote the growth of domestic derivatives markets, which experienced dramatic growth in the post-crisis years. This resulted in market rules that do not reconcile and are somewhat inconsistent with each other, making the Asian regulatory landscape more uneven and fragmented along jurisdictional lines.