Leading financial lobby group, Asia Securities Industry & Financial Markets Association (ASIFMA), has called on China to permit cross-border sharing of information by financial firms operating within the country.
This plea comes as Chinese authorities tighten control over data generated within its borders as part of national security efforts. Last July, China introduced cross-border data review measures that require a security review for "important" offshore data transfers, causing confusion and concern among foreign financial firms. ASIFMA's CEO, Alice Law, highlighted that vague or stringent data regulations could curb foreign interest in China's capital markets, despite the ongoing market opening. She emphasized the importance of global market interoperability and the ability for financial firms to communicate with each other.
In a report on China's capital markets, ASIFMA called for clearer and tailor-made rules that would facilitate cross-border sharing of financial data. The lobby group stressed the significance of sharing data such as investment outlooks, portfolio analysis, shareholding information, and anti-money laundering information with affiliates for research, compliance, and risk management purposes. However, ASIFMA acknowledged that a quick resolution to the issue is unlikely as China's financial regulators have limited authority over data policy-making.
The lobby group highlighted that operating in China has become challenging for some members due to data security rules. While asset managers like BlackRock, Neuberger Berman, and Fidelity International have been allowed to establish wholly-owned units in China, data security regulations have made the operating environment "very painful" for these firms. ASIFMA pointed out that Chinese data rules lack clarity and that certain requirements on data collection by authorities are overly broad and intrusive, hindering the growth of China's financial services capability and its aspirations to become a digital economy.
ASIFMA continues to advocate for carve-outs and clarification of rules, recognizing that decision-making power over data policy lies outside the purview of China's financial regulators. The lobby group emphasized the need for global markets to be able to communicate and share information, urging China to create an environment that fosters interoperability and supports the growth of its financial sector.
By fLEXI tEAM