International stock exchange leaders wary of Dodd-Frank

Ronald ArculliDuring the World Federation of Exchanges’ general assembly and annual meeting in Johannesburg, South Africa, international stock exchange leaders discussed concerns about the Dodd-Frank Act’s international impact.

“Our friends in America have this awful habit of extending their laws beyond their shores, and Dodd-Frank is no exception,” Ronald Arculli, the chairman of Hong Kong Exchanges and Clearing, said, reports. “My caution to those of us from Asia is really to keep a very close watch on the developments.”

One of the concerns discussed during the panel discussion was the potential for a rise in regulatory arbitrage caused by regulation differences across exchanges and the likelihood of companies and investors moving their business to easier jurisdictions.

“It was one of the principles that the G20 enunciated very carefully [in 2010],” Arculli said, according to “At that time there was quite a lot of concern that if we had different sets of regulation in different major markets, arbitrage would happen and that would probably be the least desirable of the outcomes. But it seems that politics have driven different jurisdictions into different stages of development.”

Some of the panelists said that the slow pace that U.S. regulators are taking to get new regulations written and implemented may provide a chance to find common approaches between the United Sates and major countries in Europe.

Alculli said he doubts the regulations will end up benefiting international exchanges.

“If you look at America today, you look at the concerns – the Wall Street protests,” Alculli said, reports. “These sorts of incidents force politicians occasionally into irrational decisions. Not that they need too much help in doing that most of the time.”

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