APAC Regulatory Outlook 2026

Regulatory activity across Asia Pacific (APAC) is expected to maintain momentum in 2026, with approaches being driven by national priorities, and increasingly influenced by geopolitical dynamics.

APAC exhibits a diverse regulatory landscape across areas such as AI governance, digital assets, sustainable finance, and operational resilience, with jurisdictions adopting a spectrum of approaches — from advancing formal frameworks, to innovation-focused regimes supported by regulatory guardrails, and others remaining in exploratory or ‘soft law’ phases.

In major APAC financial centers, supervisory agendas are moving from framework setting into new guidance, implementation, and enforcement, with heightened expectations around liquidity resilience, market stability, investor protection, private market conduct/valuation governance, and technology/third‑party risk. In parallel, market structure reforms, post‑trade modernization (including settlement cycle readiness), and mandatory climate disclosure regimes are entering phased execution. The combined impact of resilience expectations, market competitiveness, and cross‑jurisdiction divergence is likely to be a defining APAC regulatory theme through 2026.

This piece takes stock of the main regulatory initiatives under way in the APAC region in 2026 across the following themes:

• Markets and trading
• Risk, capital, and financial stability
• Digital finance and technology
• Sustainable finance

Markets and trading

Regulatory momentum in markets and trading is building across APAC as authorities seek to modernize market structures, enhance transparency, and strengthen competitiveness. Reforms span equity market governance, private markets oversight, exchange-level resilience, and cross-border listing pathways.

Equities market reform and market development

In Mainland China, the China Securities Regulatory Commission (CSRC) is moving from policy announcement to enforcement. The focus for 2026 is the “quality over quantity” doctrine – specifically, the rigorous application of new delisting rules for firms failing to meet disclosure and dividend thresholds. This governance push complements ongoing reforms to the ChiNext board and the expansion of the Real Estate Investment Trust (REIT) pilot.

Singapore enters the execution phase following the publication of the Equities Market Review Group’s recommendations in 2025, and will begin implementing measures to enhance liquidity, expand research coverage, and refine listing and investor protection regimes. The Singapore Exchange (SGX) Nasdaq dual-listing bridge, expected to be launched mid-year, is set to expand cross-border fundraising routes and strengthen Singapore’s role as a regional market gateway. The Monetary Authority of Singapore (MAS) is also consulting on proposed amendments to the Securities and Futures Act 2001 and draft regulations to facilitate dual listings on the Global Listing Board in January, with final regulations expected to be published mid-year.

Meanwhile, in India, the Securities and Exchange Board (SEBI) is pursuing a wide-ranging package of capital market reforms – easing compliance for foreign portfolio investors, streamlining entry processes with the Reserve Bank of India (RBI), lowering mutual fund frictions, adjusting trading and margin rules, and refining product frameworks to boost foreign participation, deepen equity market liquidity, and support long-term market development.

Fixed income markets

In Mainland China, the National Association of Financial Market Institutional Investors (NAFMII) Self-regulatory Guideline for Bond Valuation Business takes effect this April. This framework is set to level the playing field for valuation providers within the interbank bond market, establishing a more standardized and transparent environment for local bond pricing.

Hong Kong’s fixed income development is anchored by the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority’s (HKMA) Roadmap for the Development of Fixed Income and Currency (FIC) Markets. In 2026, regulatory focus transitions into active implementation. A critical priority for the year is expanding the Southbound Bond Connect to include a wider range of institutional investors to provide essential hedging tools. Central to this roadmap is the modernization of financial infrastructure, specifically the transition toward tokenized bonds and digital settlement to enhance capital efficiency. With regulators also strengthening offshore RMB liquidity and the stablecoin licensing regime, the market will see a structured environment for next-generation electronic trading.

Market infrastructure reform

Several markets are recalibrating their settlement cycles: India equity markets are already on a T+1 settlement cycle and launched T+0 for a limited set of stocks and brokers (but has postponed full mandatory rollout following initial challenges), while others explore partial shortening of settlement windows.

Hong Kong is moving to modernize its financial infrastructure by shifting toward a T+1 stock settlement cycle, with a formal market-wide consultation expected to address the transition strategy. Meanwhile, the city will set up a centralized gold clearing system scheduled to go live in 2026 and will partner with the Shanghai Gold Exchange on its governance while deepening physical infrastructure and market connectivity.

In Australia, the Treasury Laws Amendment Act of 2024 had strengthened regulatory arrangements for Australia’s financial market infrastructures. More recently, operational setbacks at the Australian Securities Exchange (ASX) have triggered a regulatory inquiry, the findings of which will be published by 31 March. In the interim, the exchange has agreed to a package of reforms. The 2026 agenda is now dominated by the need to demonstrate exchange resiliency and the successful delivery of critical technology replacements.

Risk, capital, and financial stability 

Authorities across APAC are expected to intensify regulatory and supervisory initiatives in 2026 to strengthen the resilience of financial systems amid heightened macroeconomic uncertainty, growing geopolitical tensions, and the rapid adoption of emerging technologies.

Private markets

Private markets are expected to attract heightened supervisory scrutiny across major APAC financial centers in 2026 as the asset class continues to grow in scale, leverage, and interconnectedness with the broader financial system. Regulators are increasingly focused on mitigating financial stability risks arising from valuation opacity, liquidity mismatch, governance standards, and the expansion of private credit.

Hong Kong is strengthening oversight of private funds with enhanced governance expectations while expanding investor access, notably through its listing framework for closed-ended fund vehicles. Meanwhile, Australia is enhancing its supervision and surveillance of private credit and private capital markets. As Australian Securities and Investments Commission (ASIC) explained in its capital markets roadmap, the regulator is setting clear principles for private credit, refreshing targeted guidance, recommending law reform to strengthen the wholesale funds regime, and working with industry to improve practices like disclosure. Specific areas of focus are information asymmetries, the robustness of valuation methodologies, conflicts of interest, illiquidity, and the systemic risks posed by leverage build-up.

Liquidity, capital & systemic risk management

Prudential authorities across APAC are tightening oversight in 2026, with a stronger emphasis on granular, forward-looking supervision in response to faster-moving liquidity and contagion risks. Regulators are increasingly focused on how digitalization, market structure, and non-bank activity amplify stress transmission across the financial system.

In Singapore, MAS is set to finalize its enhanced liquidity risk management standards for banks this year. The new framework moves beyond standard metrics to introduce rigorous expectations for intraday liquidity management and funding concentration, reflecting the speed of modern bank runs. Building on this, MAS is consulting on enhanced liquidity risk management requirements for funds in Q1, signaling a broader supervisory push to address liquidity mismatches and systemic risk beyond the banking sector. The proposals focus on aligning fund liquidity with redemption arrangements, clarifying governance and disclosure expectations, and mandating appropriate liquidity management tools.

Similarly, the HKMA issued new guidance at the beginning of this year, urging banks to strengthen liquidity risk management against digitally driven threats. Key practices that the HKMA is expected to monitor include recalibrating stress tests with more severe deposit outflow assumptions and “digital add-ons” to account for rapid 24/7 fund transfers via online channels. Banks are also expected to implement social media monitoring to detect shifting market sentiment and ensure their systems can generate critical liquidity data in under an hour during times of stress.

In New Zealand, the Reserve Bank of New Zealand (RBNZ) is commencing the phased implementation of its capital review under the new Deposit Takers Act, adjusting capital buffers and Loan-to-Value Ratio restrictions to support credit flow. Meanwhile, 2026 marks a transition year following the Australian Prudential Regulation Authority’s (APRA) decision to phase out Additional Tier 1 capital instruments by 2032, with banks expected to begin rebalancing capital structures ahead of new prudential standards taking effect from 1 January 2027.

India is moving in a similar direction – the RBI has finalized enhancements to the Liquidity Coverage Ratio (LCR) framework, effective from April 2026, increasing run-off assumptions for digitally enabled deposits to reflect the speed of modern bank runs. This is expected to drive stronger deposit segmentation, behavioral modelling, and liquidity reporting. Beyond banks, RBI’s existing liquidity risk management framework for large non-banking financial companies embeds LCR and enhanced asset liability management expectations, reinforcing resilience across the non-bank sector.

Regionally, systemic risk surveillance is pivoting to capture “hidden” vulnerabilities. Regulators in Hong Kong and Australia are expanding stress-testing perimeters to cover non-bank financial intermediation (private credit and funds), third party arrangements and household leverage, searching for contagion risks that sit outside the traditional banking reporting lines.

Market Stability and Infrastructure Resilience

Heightened volatility, cyber threats, and market complexity are pushing infrastructure resilience to the top of the regulatory agenda. Hong Kong is entering a critical phase with its three-year market infrastructure enhancement program. More clarity is also expected in Hong Kong on the newly active Protection of Critical Infrastructures Ordinance and its accompanying Code of Practice (CoP), including a sectoral CoP and other guidelines to be published by the HKMA.

Mainland China continues to prioritize “comprehensive stability” under the 15th Five-Year Plan, balancing financial sector development with strict prudential oversight. The 2026 focus is on resolving risks within regional banks and monitoring cross-border data flows to mitigate systemic vulnerabilities. Elsewhere in APAC, supervisors are investing in upgraded clearing and cyber resilience frameworks. Several markets are introducing rigorous “impact tolerance” standards, mandating that exchanges and critical infrastructure providers demonstrate exactly how, and how fast, they can recover from a major cyber incident.

The Reserve Bank of Australia (RBA) has outlined several priorities relating to infrastructure resilience, including the forthcoming modernization of Australia’s high-value real-time settlement system and addressing challenges in cross-border payments.

Digital finance and technology

Operational shifts driven by AI, cloud ecosystems, and tokenization are forcing a rapid recalibration of financial regulation. As authorities move to prioritize national security and enforce data sovereignty, the window for harmonized global standards appears to be closing. Consequently, firms face a patchwork regulatory environment, where varying jurisdictional velocities create significant uncertainty and potential arbitrage risks.

Artificial Intelligence (AI)

AI governance will continue to dominate the regulatory radar as countries determine how best to balance adoption with security. Singapore remains one of the most active jurisdictions. MAS is currently consulting on comprehensive AI Risk Management Guidelines covering governance, explainability, and lifecycle controls, and oversight of third-party AI service providers, and may release its response to consultation feedback by late 2026. At Davos this year, Singapore also announced the launch of the world’s first Model AI Governance Framework for Agentic AI, offering comprehensive guidance for enterprises deploying autonomous AI agents. The new framework builds upon Singapore’s 2020 “Model Governance Framework (MGF) for AI”.

Similarly, Australia, New Zealand and Malaysia are opting or considering opting for a sectoral approach into 2026, embedding “mandatory guardrails” into existing legal structures rather than drafting standalone AI laws.

India is also taking a principles-based, non-statutory approach to AI governance, and in the financial sector, regulators are signaling supervisory expectations around explainability, governance and human oversight of AI-driven decision-making, allowing innovation to progress while reserving flexibility for future sector-specific controls.

Hong Kong’s 2026 AI agenda centers on responsible AI adoption through stronger ethical and data‑privacy governance, the launch of a new AI Research and Development institute to drive innovation, cross‑sector integration, and a sustained focus on safety and risk prevention.

At the same time, regulatory fragmentation is deepening and will start to crystallize in 2026. Last month, South Korea officially enacted the Framework Act on the Development of Artificial Intelligence and Establishment of Trust (the AI Basic Act), becoming the first nation to implement a comprehensive, fully operational AI law – the effects of which will play out into 2026. Similarly, Vietnam’s first-ever Law on Artificial Intelligence (AI) No. 134/2025/QH15 will become effective on March 1, 2026, and establishes a comprehensive, risk-based framework for AI development, deployment, and governance. Indonesia’s AI Regulation covering its national AI roadmap is being finalized following consultation in August 2025. The rules will take the form of Presidential Regulation, expected to be released in the first half of the year.

Mainland China continues to prioritize national strategic positioning over Western-style compliance, advancing targeted rules on data classification and algorithmic governance. This divergence between China’s “strategic control” model and the “risk-based” approach of some other regions will force multinational firms to consider the positioning of their AI operations in 2026.

Data sovereignty, cloud risk, and digital infrastructure

Data sovereignty and localization are expected to remain strategic priorities across APAC in 2026. In Malaysia, data sovereignty is a core element of national digital policy alongside the National Cloud Computing Policy (both launched in late 2025), explicitly framing a “secure and sovereign” cloud ecosystem as foundational to AI adoption. This policy lays out the groundwork for the incoming Data Commission to enforce stricter residency requirements for critical digital infrastructure.

In India, data localization continues to be reinforced through sectoral regulation alongside the operationalization of the Digital Personal Data Protection Act. Crucially, RBI’s requirement that all payment systems data be stored only in India remains the operational baseline for the sector, anchoring critical financial data onshore even as digital payments volumes grow. SEBI is also expected to finalize its data localization requirements sometime this year.

Indonesia maintains a hybrid data-localization framework through Government Regulation No. 71 of 2019 (GR 71), supplemented by sector-specific rules. While GR 71 permits offshore data processing in principle, financial regulators – continue to require commercial banks to place core electronic systems within local data centers.

In Mainland China, state oversight of key datasets remains central. While the Cyberspace Administration of China (CAC) issued guidance in 2025 to narrow security assessment triggers, it simultaneously tightened the net for others. The new certification rules for cross-border personal data exports, effective from January 1, 2026, have extended compliance obligations, illustrating how jurisdictions are embedding domestic data control into the heart of financial regulation.

Digital assets, tokenization & stablecoins

Digital asset regulation across APAC will mature further in 2026 as supervisors shift from broad principles to structured, enforceable regimes. Singapore remains the regional frontrunner, expanding its tokenization framework and issuing detailed guidance for tokenized capital market products to support the commercialization of the “Global Layer One” initiative.

Following Hong Kong’s enactment of the Stablecoins Ordinance on 1 August 2025, the issuance of fiat-referenced stablecoins has become a regulated activity subject to mandatory licensing by the HKMA. The first licenses for fiat-backed stablecoin issuers are expected to be granted in 2026, reinforcing Hong Kong’s positioning as a regulated hub for digital payments and tokenized finance. These developments sit within the HKMA’s Fintech 2030 strategy, launched in late 2025, which prioritizes tokenization initiatives including the regularization of tokenized government bond issuance and the transition from pilot projects toward live market use cases.

In parallel, Hong Kong is tightening oversight of the virtual asset ecosystem. Under the SFC’s ASPIRe roadmap, rules have been streamlined to support product availability and platform onboarding, while new legislation expected in 2026 will require all firms providing virtual asset dealing, advisory, or custody services to be formally licensed, removing previous exemptions.

Japan is also entering a more granular regulatory phase, with the Financial Services Agency (JFSA) consulting in late 2025 on new ordinances to implement amendments to the Payment Services Act, with a focus on operational resilience. Australia is finalizing bespoke legislation to regulate digital asset platform operators, requiring providers of digital asset trading and tokenized custody services to hold an Australian Financial Services License.

India is hardening its digital asset perimeter through enforceable Anti-Money Laundering (AML) / Countering the Financing of Terrorism (CFT) with Virtual Digital Asset (VDA) service providers (required to register with Financial Intelligence Unit (FIU). The framework is also becoming more implementation-heavy, with FIU issuing updated AML/CFT guidelines for VDA service providers on 8 January 2026, reinforcing Know Your Customer (KYC), reporting, and control expectations.

Operational resilience

Operational resilience is climbing the supervisory agenda in APAC in 2026 as jurisdictions contemplate their own approach in the context of other regimes globally, such as the UK and EU’s designation of Critical Third Parties (CTPs).

Australia’s CPS 230 has embedded stricter expectations for end-to-end process mapping and business continuity and increased scrutiny of service provider arrangements. With the July 2026 transition deadline for legacy contracts looming, firms are currently uplifting contractual controls. Since the regulation took effect on 1 July 2025, challenges persist in applying standards to market-mandated ‘non-traditional service providers’ (NTSPs) where terms are non-negotiable, consequently, APRA is now consulting on simplifying requirements for NTSPs. Meanwhile, regulators have suggested the potential for direct supervision of systemically important providers.

In Singapore, MAS has signaled that it intends to consult on enhanced operational resilience requirements during 2026, building on existing Technology Risk Management (TRM) and outsourcing frameworks. Areas of focus are expected to include service mapping, tolerance setting, incident reporting, and third-party dependencies. In Hong Kong, the HKMA requires banks to fully implement their operational resilience framework by May 2026 as detailed in the Supervisory Policy Manual OR-2.

Sustainable finance 

Momentum in APAC sustainable finance is continuing as jurisdictions advance climate disclosure rules and update their domestic taxonomies. Regulators are increasingly embedding climate risk into capital markets supervision and driving toward International Sustainability Standards Board (ISSB) aligned disclosures. Authorities are adopting flexible timelines and transition finance tools to reflect the region’s diverse economic structures.

Climate disclosure

Climate reporting frameworks across APAC will continue to tighten in 2026 as jurisdictions embed ISSB-aligned standards and move toward more decision-useful disclosures:

Hong Kong is phasing aligned requirements for listed issuers between 2025 and 2028, marking a challenging multi-year transition to granular climate-related reporting.

Australia’s climate-related disclosure regime, which took effect in 2025, is now in its operational phase. Supported by final guidance from ASIC, the focus for 2026 is on governance and assurance as the reporting regime gradually expands to a wider cohort of entities.

Several markets, including Singapore and others in Southeast Asia such as Thailand, Malaysia, and the Philippines, are integrating or consulting on ISSB-aligned requirements, with phased implementation expected from 2025–2027.

Japan will adopt aligned standards on a voluntary basis from April 2026 (FY2026), with mandatory reporting introduced in phases from 2027 onward.

New Zealand, while relaxing certain reporting thresholds to reduce friction and ending requirements for managed investment schemes, remains committed to mandatory climate disclosure for large entities.

Taxonomies

In 2026, taxonomies across APAC are expected to play a more operational role, as regulators increasingly use classification frameworks to guide transition finance, supervisory assessments, and market conduct.

Hong Kong advanced its sustainable finance framework in 2025 by finalizing supervisory guidance and expanding its taxonomy through Phase 2A to include transition activities and additional sectors such as manufacturing and information and communications technology. While the taxonomy remains voluntary, the HKMA has signaled its intention to incorporate it into banking supervisory policies over time. In parallel, Singapore continues to promote interoperability through the Multi-Jurisdiction Common Ground Taxonomy.

At the national level, Malaysia, Indonesia, and India are broadening their taxonomies to incorporate transition principles rather than focusing solely on green activities. Malaysia is advancing its Climate Change and Principle-based Taxonomy, while Indonesia is implementing Phase II of its Sustainable Finance Roadmap alongside taxonomy expansion.

Regionally, the Association of Southeast Asian Nations (ASEAN) Taxonomy for Sustainable Finance Version 4, published in November 2025, marks a shift from framework development toward adoption and implementation.

Australia published its Sustainable Finance Taxonomy in 2025, building on international approaches while incorporating domestic considerations, providing a foundation for the rollout of sustainable investment product labelling and greater supervisory clarity in 2026.

Transition finance

The policy landscape underscores the importance of transition finance, supported by nationally determined transition‑framework roadmaps that set clear targets and actionable measures, while APAC roadmaps further enable phased implementation of globally aligned climate disclosures and refinements to taxonomies to incorporate transition‑finance elements.

South Korea’s commitment to an enhanced 2035 Nationally Determined Contribution (NDC) and its accession to the Powering Past Coal Alliance, which together reinforce expectations around coal phase-down and economy-wide transition planning.

In 2026, Singapore will continue to play a central role in regional capital mobilization through the MAS’ Financing Asia’s Transition Partnership (FAST-P), which is actively deploying blended finance into green and sustainable infrastructure projects across the region.

New Zealand has commenced preparations for Taskforce on Nature-related Financial Disclosures reporting, signaling an expanding focus on transition planning and the integration of nature-related risk alongside climate objectives.

Climate risk

Supervisors across APAC are strengthening expectations around climate risk management, with climate scenario analysis now a standard component of prudential oversight and climate risk assessments across banks and other financial institutions increasingly informing supervisory dialogue.

In 2026, climate risk analytics are being embedded more directly into core supervisory review processes. Regulators including MAS, HKMA, APRA, and Malaysia’s Joint Committee on Climate Change are incorporating climate risk considerations into ongoing supervisory assessments. The regulatory emphasis is moving toward data quality, governance, and forward-looking metrics, with supervisors expecting firms to demonstrate how climate risks are reflected in current practices.

In 2026, jurisdictional approaches continue to evolve in line with domestic market structures, with Australia intensifying supervisory testing across banks, funds, and insurers, New Zealand strengthening expectations around scenario analysis and governance, Malaysia developing specialized tools to support consistent climate risk assessment and disclosure, and Hong Kong enhancing prudential guidance to support more holistic integration of climate risk across banking disciplines.

Sustainable fixed income issuance

In 2026, sustainable fixed income issuance across APAC is expected to remain robust, driven by public leadership, and growing emphasis on mobilizing blended and transition capital.

Recent government issuance illustrates this. While the Australia’s inaugural Green Treasury Bond raised AUD 7 billion, South Korea committed KRW 420 trillion in climate finance by 2030 and is preparing a sovereign green bond framework, and Hong Kong issued its third Digital Green Bond at HKD 10 billion, incorporating tokenized settlement. In the year ahead, sustained efforts are expected to focus on mobilizing private capital for transition finance and carbon markets, requiring enhanced data and targeted support for small and medium enterprises to facilitate their transition.