Revamped SFC Code on Unit Trusts and Mutual Funds targeted for implementation on 1 January 2019 with transitional period

On 6 December 2018, the Securities and Futures Commission (SFC) published the conclusions to its consultation on proposed amendments to the Code on Unit Trusts and Mutual Funds (UT Code). The proposed amendments are aimed at updating the regulatory regime for SFC-authorised funds and addressing the risks posed by financial innovation and other developments. Continue reading

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 8 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.

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