SFC announces “Manager in Charge” regime to heighten senior management accountability for financial institutions in Hong Kong

In its recent circular (with annexes 1 and 2 and a set of FAQs), the Securities and Futures Commission (SFC) introduced new measures to heighten the accountability of the senior management of all licensed corporations (LCs). The circular clarifies who should be regarded as the senior management of a LC and requires the LCs to designate fit and proper individuals to be “Managers In Charge” of certain Core Functions (MICs, MIC Regime).

The SFC's increased focus on senior management accountability is part of a global trend to make it easier for regulators to hold individuals to account, and comes following the recent introduction in the UK of the Senior Managers and Certification Regime. While the SFC emphasises that the MIC Regime does not impose any additional civil or criminal liability on the senior management of LCs, individuals must consider carefully whether they should be appointed as MICs and, if so, what their responsibilities for the designated Core Function are.

Breakfast Seminar – 10 January 2017

We will be holding a breakfast seminar on 10 January 2017 to discuss the regime in more detail and its implications for firms. If you would like to attend please click here to RSVP. In the meantime we consider the issues raised by the regime in our full briefing.

Timetable

  • 18 April 2017 – The SFC intends to commence the collection of up-to-date management structure information from LCs and corporate licence applicants.
  • 17 July 2017 Existing LCs are expected to submit the required information via the SFC Online Portal on or before this date.
  • 16 October 2017  MICs who head certain Core Functions are also required to be approved as Responsible Officers (ROs) and the SFC generally expects that on or before this date (i.e. within six months from the commencement date), these MICs will have applied for approval to become ROs.

Given the tight timeline, LCs should begin reviewing their organisational structure and identifying potential MICs for each of the Core Functions, and making any necessary changes to comply with the new MIC Regime.

Please click here to read the full briefing.

 

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