Global banks are considering moving more of their derivatives business from London to Hong Kong and Singapore. But while such a shift would open up “hundreds” of new vacancies in Asia, the local talent pool may not be large enough to cope, say recruiters.
The Asia Securities Industry and Financial Markets Association (ASIFMA), which represents banks in Asia, has been holding separate discussions with the Hong Kong Monetary Authority (HKMA) and the Monetary Authority of Singapore (MAS) about potential regulatory changes that would allow more derivatives trading in the two cities, reports Reuters.
Asia typically makes up less than 10% of the global over-the-counter derivatives market, with London serving as a large booking centre for Asian trading. But banks are now considering whether more Asian trades should be booked locally because UK and European regulations – and Brexit – are making the UK a less appealing hub for Asian derivatives.
More banking jobs would be created in Singapore and Hong Kong if derivatives work does end up moving there, say recruiters. While some of these roles would be in sales and trading, the majority would be jobs assisting “the trade booking process”, says former derivatives trader Matt Hoyle, who now runs a Hong Kong search firm.
“It could well be hundreds of extra jobs in the actual banks, but when you add third-party consultants and contractors, then more than 1,000 positions isn’t unthinkable. I don’t think we’re talking about 5,000 or 10,000 new jobs, though,” he adds.
Technology recruitment would also rise. “There would certainly be significantly increased spend on both front and back-end tech at banks in Asia,” says Warwick Pearmund, associate director of emerging technologies at Pure Search in Hong Kong.
The banks most likely to hire if derivatives business moves to Asia include J.P. Morgan, Morgan Stanley, Citi, Bank of America, Standard Chartered and HSBC, says Hoyle.
Meanwhile, the HKMA and MAS would themselves need to staff up. “At the moment I don’t think the HKMA has enough people to oversee more derivatives business,” says a Hong Kong headhunter. “Hong Kong and Singapore are unsophisticated derivatives markets compared with London. Both banks and regulators risk being overwhelmed if they don’t get the right talent on board.”
Hiring for any derivatives jobs boom will mean “bringing in more expats”, says the headhunter. “We haven’t had an influx of them here since the 1990s and early 2000s, but this could trigger another one because the derivatives talent pool is too small here,” he adds. “Banks will use expats to train up more locals over the longer term.”
London, which has a large pool of professionals with expertise in managing and processing banks’ trading books, is the most likely source of new staff.
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