You will find here all our publications dedicated to the Financial Services industry.
Concurrent SFC-HKMA thematic review on distribution of non-exchange traded investment products
In March 2022, the Securities and Futures Commission and the Hong Kong Monetary Authority announced that they will commence a concurrent thematic review on the distribution of non-exchange traded investment products, such as equity-linked structured products and corporate bonds. The review will focus on selected firms’ compliance with suitability obligations, which aims to assess these firms’ practices with respect to product due diligence, suitability assessments and information disclosure to clients, based on their policies, procedures, systems and controls, as well as senior management oversight of such product distribution.
Regulatory framework and licensing requirements for trustees and custodians – Type 13 regulated activity
In February 2022, the Securities and Futures Commission released its Consultation Conclusions on the proposed regulatory framework and began a further consultation on the details to introduce a new Type 13 regulated activity, which aims to regulate top-level trustees and custodians (i.e. “Depositaries”) of SFC-authorised collective investment schemes, and supervise how they should safeguard scheme assets and oversee scheme operations for public funds in Hong Kong.
Regulatory policy on virtual asset-related activities in Hong Kong of the SFC and the HKMA
In light of the rapid developments in the virtual asset (“VA”) landscape in Hong Kong, the Securities and Futures Commission (“SFC”) and the Hong Kong Monetary Authority (“HKMA”) jointly issued a circular in January 2022 on setting out their regulatory policy for VA-related activities conducted by intermediaries, covering distribution of VA-related products, provision of VA dealing services, and offering of VA advisory services.
Establishing an effective compliance function for financial intuitions in Hong Kong
In an environment where regulatory scrutiny and expectations from the Hong Kong regulators such as the Hong Kong Monetary Authority and the Securities and Futures Commission are growing, more financial institutions are devoting substantial resources into strengthening their compliance function.
Regulators’ expectations on corporate culture for financial institutions
Given the increasing public concerns over financial institutions’ misconduct behaviours, regulators, in particular the Hong Kong Monetary Authority, are raising their requirements on financial institutions’ development of a sound corporate culture that supports prudent risk management and incentivises proper staff behaviour for positive customer outcomes and high ethical standards.
Operational resilience regulatory framework for financial services providers regulated by the HKMA and the SFC
Operational and security incidents in the financial services industry are on the rise globally. This is why becoming operationally resilient and to understand the existing vulnerabilities and mitigate the corresponding risks and impacts are more vital than ever.
Regulatory review /mock inspection for securities dealers and asset managers licenced by the SFC
Given the complexity of the regulatory requirements for the financial services industry increases over time, the need for asset management and securities brokerage companies to face the scrutiny of inspections from regulators also increases. Failing to comply with the latest regulatory requirements will not only result in greater reputational and business risks, but it will also result in public reprimands and fines.
Update on latest regulatory requirements for insurance products and insurance-linked securities
To enhance customer protection in the Hong Kong financial industry, the Hong Kong Monetary Authority (“HKMA”), the Securities and Futures Commission (“SFC”) and the Insurance Authority (“IA”) (collectively the “Regulators”) have recently conducted a series of reviews and inspections over the industry’s selling practices of various insurance products and insurance-linked securities and highlighted areas of concerns and their respective regulatory requirements and expectations.
Regulatory standards and measures on operational resilience and remote working arrangements of the SFC
As a hybrid mode of working is likely to be the new normal in the financial industry even after the pandemic is under control, licensed corporations and registered institutions (collectively “intermediaries”) should be more vigilant to operational resilience and the risks associated with remote working to better sustain their businesses.
Consultation conclusions on proposed amendments to the AML Guidelines of the Securities and Futures Commission (“SFC”)
In order to align with the Financial Action Task Force (“FATF”) standards as amplified by the FATF’s Guidance for a Risk-Based Approach for the Securities Sector (issued in Oct 2018) and to uplift the Anti-Money Laundering (“AML”) control environment to address the improvement points observed from the latest FATF Mutual Evaluation Report of Hong Kong (issued in Sep 2019), the Securities and Futures Commission (“SFC”) issued a consultation paper on 18 September 2020 for the proposed amendments to (1) the Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Licensed Corporations) (the “AML/CFT Guideline”) and (2) the Prevention of Money Laundering and Terrorist Financing Guideline issued by the SFC for Associated Entities (the “Guideline for AEs”), collectively the “SFC AML Guidelines”.