Hong Kong SFC publishes consultation conclusions on asset management regulation and launches further consultation

On 16 November 2017, the Securities and Futures Commission (SFC) in Hong Kong published its consultation conclusions on proposals to enhance asset management regulation and point-of-sale transparency (the Proposals) (please click here for our e-bulletin on the SFC’s consultation).

The SFC received 38 written submissions from key players in the asset management industry and, as the majority of respondents supported the Proposals, the SFC has largely adopted them and the proposed changes to the Fund Manager Code of Conduct (FMCC) and the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission (Code of Conduct), with certain modifications or clarifications of the regulatory intent. The revised FMCC and Code of Conduct will come into effect on 17 November 2018 and 17 August 2018 respectively. The SFC has indicated that it will provide further guidance to the industry by way of a set of frequently asked questions, which will be updated from time to time.

The SFC has also launched a further consultation on disclosure requirements applicable to discretionary accounts under the Code of Conduct. The deadline for submitting written comments is 15 January 2018. Our recent e-bulletin outlines the above in more detail. We will be holding a seminar on 4 December 2017 in Hong Kong to discuss the implications of the above for asset managers. Further details will be provided. In the meantime, please do not hesitate to reach out to William Hallatt, Hannah Cassidy, Jeremy Birch or your usual Herbert Smith Freehills contact.

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Filed under Asset management, Hong Kong, Non-UK regulation, Regulatory Reform, Sector Updates by Herbert Smith Freehills


On 13 November 2017, the EU Council unanimously voted to impose a wide range of targeted sanctions on Venezuela in response to the growing political crisis in the country. Notably, the new EU sanctions go further than current US measures against Venezuela by including an arms embargo, as well as a travel ban and an asset freeze.

Further to a similar regime being imposed on Mali in order to target those seeking to derail the 2015 peace agreement, the UK has laid the legal groundwork for financial sanctions to be imposed once relevant individuals have been identified. Please click here for our full briefing.

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Filed under Announcements, Europe, Sanctions and Money Laundering, Sector Updates by Herbert Smith Freehills

Singapore’s MAS issues Guide to Digital Token Offerings

On 14 November 2017, the Monetary Authority of Singapore (MAS) issued a guide during the first day of the Singapore FinTech Festival to provide general guidance on the application of the securities laws administered by the MAS, namely the Securities and Futures Act (SFA) and the Financial Advisers Act, to offers or issues of digital tokens in Singapore.

This follows the MAS’s clarification on 1 August 2017 that an offer or issue of digital tokens would be regulated if these tokens constitute products which are regulated under the SFA. Our e-bulletin in August 2017 regarding the clarification can be accessed here.

In our recent bulletin, we highlight the key points in the MAS guide and set out our observations. If you wish to discuss this further, please do not hesitate to reach out to our Asia team (the contact details of which are set out in the bulletin) or your usual Herbert Smith Freehills contact.

Herbert Smith Freehills LLP is licensed to operate as a foreign law practice in Singapore. Where advice on Singapore law is required, we will refer the matter to and work with licensed Singapore law practices where necessary.


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Filed under Announcements, Regulatory Reform, Singapore


The Supreme Court has held that the correct test for dishonesty is whether or not the defendant’s conduct is dishonest by the objective standards of ordinary reasonable and honest people: Ivey v Genting Casinos (UK) Ltd t/a Crockfords [2017] UKSC 67. Albeit that the Court did not need to rule on the point, the judgment would remove the second limb of the previous two-phase objective and subjective test for dishonesty as set out in R v Ghosh [1982] QB 1053. The Court also concluded that the tests for dishonesty in criminal and civil proceedings should be the same. Please click here for our full briefing on the case.

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Filed under Announcements, Sector Updates by Herbert Smith Freehills, UK, UK Legislation

Hong Kong corporate crime team publishes article addressing the thorny issue of privilege in Asia investigations

Given the variety of civil law and common law systems across Asia, and the fact that corporate investigations in the region almost always involve multi-jurisdictional elements, protecting privilege is a complex topic. With the differing approaches to privilege adopted both in Asia and in aggressive enforcement jurisdictions like the US and the UK, this topic occupies lawyers, law enforcement agencies and regulators alike.

This article, first published in Global Investigations Review’s The Asia-Pacific Investigations Review 2018, summarises the position in Asian civil law countries as well as in key common law jurisdictions like Hong Kong and Singapore. It also highlights recent developments in the UK including in the RBS Rights Issue and ENRC cases, as well as the position in the US. Finally, it covers practical steps to be taken to maintain privilege over relevant documents and evidence in the context of investigations.  The article, authored by Kyle Wombolt, Christine Cuthbert and Anita Phillips, is available to download here. The Asia-Pacific Investigations Review 2018 is available to download here.

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Filed under Announcements, Asia, Hong Kong, Investigations


Last month the Communist Party of China held its 19th National Congress. One of the key themes that came out of the Congress was the desire to increase the focus on combatting financial crime and systemic financial risk.

This increased focus follows on the back of the stock market crash in summer 2015 and enforcement actions against those considered responsible for the crash, including investigations into allegations of bribery and stock market manipulation involving senior officials at the China Securities Regulatory Commission (CSRC) and the China Insurance Regulatory Commission (CIRC), as well as criminal proceedings against brokerages. Continue reading

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Filed under Announcements, China, Regulatory Reform

Hong Kong regulators warn of common instances of non-compliance in asset management

The Hong Kong Securities and Futures Commission (SFC) has recently conducted around 250 inspections of licensed corporations engaged in asset management business, and has identified a number of common instances of regulatory non-compliance among them, which it has set out in its circular of 15 September 2017 (with appendix). In the circular, the SFC also sets out its expectations and calls on asset managers to review their internal control procedures and operational capabilities and enhance them (if necessary) to meet the SFC’s expectations. The Hong Kong Monetary Authority (HKMA) has also issued a circular to bring the SFC circular to the attention of registered institutions engaging in asset management business. Continue reading

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Filed under Announcements, Asset management, Hong Kong


On 8 November 2017, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) published significant amendments to the Cuban Assets Control Regulations (CACR) and Export Administration Regulations (EAR). These amendments were made following President Trump’s June 2017 National Security Presidential Memorandum (NSPM) setting out changes of policy direction towards Cuba.

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Filed under Announcements, Sanctions and Money Laundering, US

Hong Kong SFC publishes consultation conclusions and guidelines for reducing and mitigating hacking risks related to internet trading

On 27 October 2017, the Securities and Futures Commission (SFC) in Hong Kong issued a circular and Guidelines for Reducing and Mitigating Hacking Risks Associated with Internet Trading (Guidelines), which require all licensed or registered persons engaged in internet trading to implement 20 baseline requirements to enhance their cybersecurity resilience and reduce and mitigate hacking risks. The Guidelines were issued following the SFC’s publication of their conclusions on the related consultation on the same day. Continue reading

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Filed under Announcements


A jury has failed to reach a verdict in relation to a bribery charge against the former Chief Executive of Hong Kong, Donald Tsang Yam-kuen. On Friday 3 November, after 14 hours of deliberation, the jury advised the court that it was unable to reach a verdict and was dismissed. This is the second time a jury has been unable to reach a verdict on this charge. In February, Mr Tsang was convicted of misconduct in public office but the jury was hung on the concurrent bribery charge and a retrial was ordered. Yesterday, the prosecution indicated that the Department of Justice is not intending to seek a second retrial.

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Filed under Announcements, Bribery and Corruption, Hong Kong