Financial exec visits U-M as distinguished scholar

By Katie Vloet
U-M Law

As deputy chief executive officer of the Hong Kong Securities and Futures Commission (HKSFC), Alexa Lam was at the forefront of financial regulation and reform in East Asia for many years, was the principal architect of increasing integration between the Hong Kong and People’s Republic of China (PRC) capital markets and oversaw the regulation of the Hong Kong retail investment products market.

In February, Lam left her position as deputy chief executive of the HKSFC to transition to her new post as a law professor at her alma mater, the University of Hong Kong. Before she began teaching there, she spent two weeks at the University of Michigan as the inaugural University of Michigan Lieberthal-Rogel Center for Chinese Studies Distinguished Visitor. She guest-lectured and spoke at the Law School, the Ross School of Business, the Ford School of Public Policy, and other U-M schools and departments.

Professor of Law Nicholas C. Howson noted Lam’s work on integrating the capital markets included the Shanghai Stock Exchange-Hong Kong Stock Exchange Link (hugangtong) and the creation of an “offshore” RMB yuan market. “Alexa has also very bravely taken the lead in the difficult, and politically sensitive, tasks surrounding cross Hong Kong-PRC border enforcement of securities law, civil and criminal,” Howson said.

He added that Lam, as a “key member of the Hong Kong government, has expressed enlightened views on what is now called the ‘Umbrella Revolution’ in Hong Kong, and some of the critical aspirations driving that pro-democracy phenomenon.”

During one talk, Lam spoke about the creation of the Shanghai Stock Exchange-Hong Kong Stock Exchange Link, and its direct implications for global monetary policy and currency flows, and how government officials in the PRC and Hong Kong succeeded in working around distinct legal political cultures. She provided an up-to-the-minute update on the fate of the Link between the two most important Asian capital markets. She noted that the two sides agreed to place an aggregate limit of 300 billion yuan on investments in Shanghai traded securities that PRC investors could purchase on the Hong Kong Exchange, while Chinese investors face an aggregate limit of 250 billion yuan on the purchase of Hong Kong Exchange-listed securities.

As the Shanghai-Hong Kong Link opened in late 2014, the limits were nowhere near being met. “Until the end of February 2015, the southbound traffic (trades from mainland China buying Hong Kong stocks) was anemic. People in mainland China did not seem to be very interested in buying Hong Kong stocks,” Lam said. But cross-border trades through the Link have picked up recently, and demand from the PRC has now led to the daily quota being met for the first time on April 8, 2015, Lam said. Trading since then has remained strong.

Lam also spoke to a class taught by Michael Barr, the Roy F. and Jean Humphrey Proffitt Professor of Law at Michigan, about global derivatives reform. Lam discussed the political tussles around the world they had to overcome to develop a global standard. She also spoke to the Securities Regulation class taught by Adam C. Pritchard, the Frances and George Skestos Professor of Law.

Lam worked in corporate and commercial law firms in New York, Chicago, and Hong Kong for 19 years, then joined the SFC, as senior adviser to the chairman, then as chief counsel. In 2001, she became an executive director. Her most recent position included, in addition to the role of deputy CEO, executive director of the HKSFC’s Investment Products Division and International & China Division.

She is thrilled to be returning to academia. “It is one thing to have theories and understand the principles. Knowing what the law says is the easy part, but it is the experience that enables you to judge how to apply the law to the facts,” she said.

“Typically you learn the principles, but it is how you have walked the principles in real life cases that you really learn the full import of these principles. It is like being a doctor, the important skill is how to diagnose an illness; that comes with experience.”