On 16 October 2017, the Hong Kong Monetary Authority (HKMA) introduced by way of a circular new measures to heighten management accountability at Registered Institutions (RIs) for conducting or supervising the conduct of businesses that constitute regulated activities (RAs). These measures are detailed in a set of FAQs accompanying the circular.
This clarification is not unexpected given questions raised around how the Securities and Futures Commission’s (SFC) Manager in Charge (MIC) regime would be harmonised with the regime administered by the HKMA under section 72B of the Banking Ordinance (please see our briefing on the MIC regime here). However, the new guidance will require RIs to consider their existing governance frameworks and amend where appropriate to ensure full compliance with the HKMA’s expectations.
- 16 March 2018 – RIs may commence submitting to the HKMA and the SFC relevant information on individuals who are principally responsible for businesses conducting RAs, together with an organisation chart depicting the RI’s management and governance structure (Required Information).
- 16 April 2018 – Existing RIs are expected to submit the Required Information to the HKMA and the SFC on or before this date. Authorised institutions applying for registration as an RI or for addition of RAs on or after this date should submit the Required Information to the HKMA in support of their applications.
Given the tight timeline, RIs should begin reviewing their organisational structure and identifying who is principally responsible for each business conducting RAs, and making any necessary changes to comply with this new guidance.
Our recent e-bulletin highlights the key elements of this new guidance and their impact on RIs. If you wish to discuss this further, please do not hesitate to reach out to our Hong Kong team (the contact details of which are set out in the e-bulletin) or your usual Herbert Smith Freehills contact. Our Hong Kong team will also be holding a breakfast seminar on Thursday 26 October 2017 to discuss the new guidance and its implications – details of the seminar can be found here.