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.

“My position was very intense but very rewarding. I managed to get some exciting things going, particularly on the opening of the capital markets in China,” Lam said. “The things I had wanted to do, I accomplished during my time at the HKSFC.”

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. But before she begins teaching there, she is spending two weeks at the University of Michigan as the inaugural University of Michigan Lieberthal-Rogel Center for Chinese Studies Distinguished Visitor. She currently is working out of an office at the Law School, and guest-lecturing and speaking at the Law School, the Ross School of Business, the Ford School of Public Policy, and other U-M schools and departments.

While this is her first time in Michigan, she first learned about the university, and the Law School in particular, from colleagues at Paul, Weiss, Rifkind, Wharton & Garrison LLP in New York and Asia earlier in her career. “I have always had an image in my mind of an institution with excellent faculty members and students, and my experience from having taught a few classes here last week has proven me right,” Lam said.

It is the University of Michigan’s “great good fortune” to have Lam on campus and at the Law School to give firsthand accounts of the changes taking place in the PRC and East Asian capitals, many of which she has engineered in her career, said Professor of Law Nicholas C. Howson. He noted that her 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.

Howson 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 at the Law School under the auspices of the joint Law School, Ford School, and Ross School Center on Law, Finance and Policy, 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. In that talk, 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, she added.

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, who had co-chaired an international group tasked with coming up with margin rules for non-cleared derivatives, 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, first as senior adviser to the chairman, then as chief counsel. In 2001, she became an executive director. Her most recent position there included, in addition to the role of deputy CEO, the executive director of the HKSFC’s Investment Products Division and International & China Division.

Now, with considerably more experience to draw from, 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.”