.

1. Chapter 6
Career and Professional
Developments
The Presentation Slides for Teaching
Financial Regulations and Compliance Practices
Website : https://sites.google.com/site/quanrisk
E-mail : quanrisk@gmail.com
Copyright © 2021 CapitaLogic Limited

2. Declaration
 Copyright © 2021 CapitaLogic Limited.
 All rights reserved. No part of this presentation file may be
reproduced, in any form or by any means, without written
permission from CapitaLogic Limited.
 Authored by Dr. LAM Yat-fai (林日辉),
Chief Data Scientist, CapitaLogic Limited,
Adjunct Professor of Finance, City University of Hong Kong,
Doctor of Business Administration,
CFA, CAIA, CAMS, CFE, FRM, PRM, MCSE, MCNE.
Copyright © 2021 CapitaLogic Limited 2

3. Outline
 Career of compliance
 Professional development
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4. Inflated salary survey 2020
– Compliance
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5. Inflated salary survey 2020
– Internal audit and risk management
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6. Copyright © 2021 CapitaLogic Limited 6
Black-Scholes formulas
 Call option
 Put option
     
   
1
2
0 1 2
0
2
d
1 1 -
2
d
2 1 2 -
2 0
c = S Φ d - Kexp -rT Φ d
2
S σ
ln + r + T
K 2 1 τ
where d = Φ(d ) = exp - dτ
2
σ T 2π
1 τ
d = d - σ T Φ(d ) = exp - dτ
2
2π
p = Kexp -rT Φ -d - S Φ


 
   
   
   
 
 
 
 
 
 


 
1
-d

7. Copyright © 2021 CapitaLogic Limited 7
Credit risk capital charge
 
 
 
o g
g
2
b = 0.11852 - 0.05478ln
1 + RM - 2.5 b
Min PD , PD
DDF = 0.15 + 160PD
CP
MAF =
1 - 1.5b
CC = 1.06UL × MAF
= 0
DDF
×
 
 
 
 
 
   
o
o
o
-1 -1
o
o
CCC = 0.12 1 + exp -50PD or
S - 50
CCC = 0.12 1 + exp -50PD + or
1125
CCC = 0.15 1 + exp -50PD
Φ PD + Φ 99.9% CCC
XCDR = Φ
1 - CCC
XCL = EAD × LGD × XCDR
1-year EL = EAD × LGD × PD
UL = XC
 
 
 
 
 
 
 
 
 
 
L - 1-year EL

8. Job ad of a compliance manager
 Requirements
 Strong knowledge of the HKMA and SFC regulations
 Minimum 5 years of relevant experience in corporate
banking and/or private banking
 Degree holder in finance, laws, accounting, business,
economics or other related disciplines
 Good command of written and spoken English and
Chinese, fluency in Putonghua a plus
 Independent, self-initiative and good interpersonal skills
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9. Job ad of a compliance manager
 Responsibilities
 Support the corporate banking and private banking in
delivering robust compliance programmes
 Provide compliance advices on regulatory subjects in
relation to corporate banking and private banking
 Review regulatory returns and surveys with respect to the
HKMA’s and SFC’s requirements
 Co-ordinate and consolidate timely, complete and accurate
MIS reports for compliance issues, and any other reports as
may be required
 To perform ad-hoc duties as required
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10. Job specification
 Knowledge
 Experience
 Qualification
 Language
 Professionalism
 Knowledge proxy by
 Experience
 Qualification
 Communications
 Application form
 Face-to-face meeting
 Professionalism
 End-to-end interview
process
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11. Knowledge
 Compliance knowledge
 Guidelines, guidance notes, circulars, codes of
conduct and best practices
 Ordinances and subsidiary legislations
 Financial knowledge
 Financial products
 FI operations
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12. Experience
 Compliance
 Legal
 Risk management
 Internal audit
 Regulator
 HKMA, IA, SFC
 Law enforcement
 JFIU, HKPF, ICAC
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13. Qualifications
 Master of Laws in Compliance and
Regulation, HKU
 Postgraduate Diploma in Bank and Insurance
Compliance, HKU SPACE
 One degree in finance and one degree in legal
study
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14. Language
 To translate statutory
and regulatory
languages into simple
human languages
 English
 Chinese
 Putonghua
 Cantonese
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15. Professionalism
 Application letter
 Appointment
 Preparation
 Interview
 Follow up
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16. Demand of compliance professionals
3,930
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17. Why strong demand?
 New job category
 The contemporary financial compliance only exists in
the most recent twenty years
 Extremely experience oriented
 Very very few main stream academic education
programmes on financial compliance
 No representative professional organization in
financial compliance
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18. Outline
 Career of compliance
 Professional development
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19. Academic programmes
 The University of Hong Kong
 Master of Laws in Compliance and Regulation
 HKU SPACE
 Postgraduate Diploma in Bank and Insurance
Compliance, HKU SPACE
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20. Professional courses
 Hong Kong Institute of Bankers
 https://member.hkib.org/en-us/Training-Enrollment
 The Institute of Financial Planners of Hong Kong
 http://www.ifphk.org/CEP/ce-calendar
 Hong Kong Securities and Investments Institute
 https://www.hksi.org/en/development/continuous-
learning/cpt-courses-events/courses/
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