equally important for its participants to be able to understand and adapt to the new requirements. to illustrate, one particular rule requires market participants to obtain leis, or legal entity identifiers for purposes of trade reporting. this will improve the usability of trade reporting data and facilitate better data harmonisation across multiple reporting regimes. in fact, when mifid ii commences in january next year, leis will be needed for trades with european counterparties. reforms and culture 16. last but not least, no amount of regulatory reforms, rules and regulations can assure a sound and stable financial system if the conduct and behaviours of firms and individuals are flawed. a culture of strong integrity and high ethics are crucial lynchpins to the safety and soundness of our financial system. the key to achieve this must lie in the various lines of defence in all financial institutions – where business units follow rules and regulations diligently ; and boards and management place importance as well as give recognition to the roles of compliance and audit, supported by appropriate systems of reward and recognition. it must be made clear that doing right and doing good are aligned with doing well. 17. on this note, let me conclude. i am sure that this forum will provide many useful insights and much food for thought. thank you for your attention. 3 / 3 bis central bankers'speeches

enemy of the good. 11. i have mentioned the important work around coherence. taken individually, each set of reforms have been well - considered and for good reasons. for instance, the banking capital and liquidity reforms strengthen the ability of banks to better withstand future shocks ; otc derivative reforms seek to improve transparency, prevent market abuse and reduce systemic risks. the two sets of reforms aimed at achieving a safer financial system, albeit from different angles. however, to ensure that they complement each other without creating unintended consequences, we also need to carefully examine how the different elements will interact. 12. take the example of the impact from the leverage ratio on the capacity of clearing members to offer client clearing services. the leverage ratio is intended to be a non - risk - based backstop to supplement the capital reforms and does not factor in risk offsets. however, for those banks with large client clearing volumes, disallowing client initial margins to compensate for potential future exposure may inevitably create constraints on their leverage ratios. this can dis - incentivise the provision of such client clearing services. this may have created an unintended impact on the market ’ s incentives and overall ability to centrally clear, which will be inconsistent with the objectives of the central clearing. therefore, in the next phase of our work on the reforms, sector regulators will have to work closely towards greater consistency and coherence with the inputs of all market participants. balancing between domestic market concerns and international market access 13. as each jurisdiction embarks and complete rebuilding its part of the global house, it is also important to consider how domestic rules would operate and interact across borders and against the global standards. 2 / 3 bis central bankers'speeches 14. the recent comparability determination between the cftc and the european commission on platform trading and margins for un - cleared derivatives serves as an excellent example of how authorities have worked together to reach a common agreement and approach, bridging the requirements of two major regulatory regimes. asia - pacific authorities are working closely with one another as well, and also with the cftc and ec, to address cross - border issues. japan ’ s fsa ( financial services agency ) and australia ’ s apra ( australian prudential regulation authority ) had also announced their recognition of various jurisdictions ’ margin requirements for un - cleared derivatives, including singapore and hong kong. 15. it is one thing for the enhanced architecture of the global financial house to be sound. it is