HKMA and PWMA in Hong Kong collaborate to develop a Treat Customers Fairly Charter for the PWM industry

On 8 June 2017, the Hong Kong Monetary Authority (HKMA) announced that it has been working together with the Private Wealth Management Association to develop a Treat Customers Fairly Charter (the Charter) to further promote a customer-centric culture in the private wealth management (PWM) industry.  The Charter is designed to complement, not change, current laws and regulations and the existing terms and conditions between banks and their customers.  It is stated to be a commitment by PWM institutions in Hong Kong to support and implement the principle of treating customers fairly.

The Charter draws reference from good practices locally and overseas and from the G20 High-Level Principles on Financial Consumer Protection.  For example, it bears resemblance to the UK FCA’s consumer outcomes, in particular principle 6 which requires a firm to pay “due regard to the interests of its customers and treat them fairly”.  It comprises five high-level principles (the TCF principles) which are supplemented by examples to illustrate how such principles may be implemented by PWM institutions. However, these examples are not comprehensive, but are stated to be illustrations to enhance understanding of the “spirit” of the TCF principles.

The HKMA expects all Authorised Institutions which operate as private banks, or which have dedicated private banking units, to follow the TCF principles.  It has stated that it expects senior management and boards of directors to ensure that their institutions and relevant staff abide by the TCF principles.  Our recent bulletin outlines further details on each principle.

If you would like to discuss the above further, please do not hesitate to contact Will Hallatt, Richard Norridge, Hannah Cassidy, Joanna Caen, or your usual Herbert Smith Freehills contact.

William Hallatt
William Hallatt
Partner, Financial services regulatory Hong Kong
Email | Profile
+852 2101 4036
Richard Norridge
Richard Norridge
Partner, Head of private wealth - Asia
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+44 (0)20 7466 2686
Hannah Cassidy
Hannah Cassidy
Partner, Financial services regulatory Hong Kong
Email | Profile
+852 2101 4133
Joanna Caen
Joanna Caen
Senior consultant, Private wealth Hong Kong
Email | Profile
+852 2101 4167

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