Hub hubbub

New rules coming into force in many jurisdictions in Asia are challenging the ability of global financial institutions to operate a hub-and-spoke business model for their derivatives businesses. By Jacqueline Low, Jing Gu and Keith Noyes

Given the size and jurisdictional complexity of Asia, global banks have generally preferred an over-the-counter derivatives coverage model in which their product specialists are based in either of the two main financial hubs, Hong Kong or Singapore. These product specialists travel to other Asian countries to work with on-the-ground relationship managers to jointly market deals to local counterparties. This was an efficient way to cover the region, as the domestic derivatives markets in most