New derivatives rules push global banks to form subsidiaries

International banks across Asia are facing increasing pressure to form subsidiaries in individual jurisdictions from both home and host regulators. What are their options?

The tension between establishing global regulatory standards to prevent a repeat of the events of 2008/2009 and protecting individual state interests has created a dilemma for international banks operating throughout Asia. Derivative market reform, new capital requirements and updated resolution regimes have led not only to a rethink around the legal entities banks use in individual territories but whether to exit some markets entirely.

Explicit in the derivative market legislation adopted in