Hong Kong's Securities and Futures Commission (SFC) will appoint Ashley Alder, the Asia head of law firm Herbert Smith LLP, as its new chief executive officer, a source said.

Alder, an executive director of corporate finance at the regulator from 2001 to 2004, will return to lead the SFC in October, according to a person on Friday familiar with the decision but who declined to be identified because it isn't public.

However, Andrew Tortoishell, Herbert Smith's Greater China managing partner, confirmed the move and said that Alder's successor will be finalized "very shortly."

Patrick Wong, a spokesman for Hong Kong Financial Secretary and chairman of the selection panel, John Tsang, declined to confirm Alder's appointment. Wong said the government would be making an announcement "quite soon".

Alder, 52, will be responsible for maintaining Hong Kong's regulatory reputation as the city attracts more initial public offerings from overseas, at a time when corporate governance in some mainland companies is being scrutinized by short sellers and regulators in the US and Canada. The position has been vacant since June 8, when Martin Wheatley left to take over the UK's new Consumer Protection and Markets Authority.

"He needs to both ensure more consistent standards of oversight of listed companies and resist pressure to over-regulate and hinder growth," said James Wadham, a Hong Kong-based partner at law firm Clifford Chance LLP.

In March, the commission identified due diligence lapses in applications from investment banks for IPOs. Mainland companies accounted for 45 percent of the HK$21.9 trillion ($2.8 trillion) capitalization of the stock exchange's main board as of the end of April.

Alder is the fifth foreign national out of six appointed to lead the Hong Kong agency since its creation in 1989. The only Chinese national and permanent resident of Hong Kong to have led the SFC was Anthony Neoh, its chairman from 1995 to 1998.

Bloomberg

(HK Edition 07/30/2011 page2)