ACI hails Sri Lanka as a forerunner in education

By Cheranka Mendis

 Head of ACI The Financial Markets Association Manfred Weibogen last Friday presented the first draft of the newly written ACI Model Code to Central Bank Governor Ajith Nivard Cabraal, of which the final draft is to be available by January 2013.

Weibogen, the first President of ACI to visit Sri Lanka, also had several fruitful sessions with CEOs of several banks, as well as with the Deputy Governors during his three-day visit. Discussions were held on how the country could evolve to pursue education opportunities in the market and develop the market to embrace the new learning capabilities to handle situations such as what Europe is currently facing, to manage risk mitigation and to adjust accordingly.

Speaking to the press, Weibogen noted that Sri Lanka is doing well in certifying its traders under different levels presented by the ACI and encouraged the profession to use it as a mandatory role to create an efficient and a stronger network. The country is also part of various committees that have been formed to discuss various issues in the market. HSBC’s Sri Lankan branch is on the board of the committee that looks at education, he said.

Expressing his concern on the many regulatory issues cropping up in the global arena, Weibogen asserted that ACI is facing a tough time with the differences in opinions in the US and European regulatory markets. “We are confused as we see in regulations that the goals that need to be achieved in the US are different to what the Europe wants to do. This is not easy for us. We need to follow all the changes, respond to inquiries etc.”

He stated that while ACI would like to respond to such inquiries, what is preferred is if the regulatory bodies have a common agreement to work with. “Sometimes they keep jumping around and we have to follow them, which makes it very difficult.”

Acknowledging the announcement of the final determination on foreign exchange swaps and forwards in the US in mid-November, he commented that it was a wise decision based on pure mathematics and that it had nothing to do with gambling.

“Of course, derivatives can call such products as those with an unknown future but we have to rely on future fixing. I would support this becoming implemented but we still have to talk to the Europeans. They are still leaning to the opposite.”

Additionally, ACI is also concerned about the recent talks on financial transaction tax. Weibogen noted that the split is also seen in the financial centre in Europe. Germany, Italy, France, Spain and other countries are taking one side, while countries such as Luxemburg, Netherlands and the UK have different opinions. Business will shift from these countries to countries outside Europe, perhaps to Singapore and even the Middle East due to this, he warned.

He also frowned upon planning and scheming of banks and stated that the industry should avoid court cases. “Statements from such cases are misleading and bring the public against a sensible sector, the financial sector. If someone has done some kind of manipulation, they must be tried for it, but asking for compensation payment from a banking network is the wrong way – court systems are trying to get as much money as they can from an industry. This casts a negative light on a sensible and fragile market structure.”

Weibogen visit also coincided with the 30th anniversary of the Sri Lanka Forex Association (SLFA), the local branch of the organisation. “My congratulations to Sri Lanka. We are proud to see activities from Sri Lanka in the international community. You are a forerunner in the education sector and I will try my utmost to support you.”