Hong Kong SFC urges intermediaries to review compliance with AML/CFT requirements following identification of deficiencies

On 26 January 2017, the Securities and Futures Commission (SFC) issued a circular (with Appendix 1, Appendix 2 and Appendix 3) highlighting its concerns regarding compliance by licensed corporations (LCs) and associated entities (AEs) with anti-money laundering and counter financing of terrorism (AML/CFT) requirements.  The circular sets out the deficiencies and inadequacies in intermediaries' AML/CFT policies, procedures and controls (AML/CFT systems) identified by the SFC in the course of its routine and thematic inspections conducted in 2016.  To assist intermediaries, the SFC has further set out some examples of good practices which LCs and AEs are encouraged to consider adopting.

The SFC has reiterated that intermediaries should have appropriate and effective AML/CFT systems in place to mitigate money laundering and terrorist financing risks.  In particular, the SFC has stated that AML/CFT compliance will continue to be a focus of its supervision in the coming year.  LCs and AEs should without delay review their AML/CFT systems against the deficiencies and inadequacies highlighted by the SFC and take immediate remediation action to address any similar issues that may exist in their own policies, procedures and controls.

Please click here to read our recent e-bulletin on the circular.  If you wish to discuss this further, please do not hesitate to contact William Hallatt, Alice Dillon, Jackie Lam or your usual Herbert Smith Freehills contact.

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Filed under Asia, Hong Kong, Sanctions and Money Laundering

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