On 12 February 2019, the Hong Kong Monetary Authority (HKMA) announced in a briefing to the Legislative Council Panel on Financial Affairs that the Treasury Markets Association (TMA) will hold a long-awaited consultation this quarter on alternative reference rates.
The announcement follows signals from regulators globally that firms should transition away from the London Interbank Offered Rate (LIBOR) and other IBORs to alternative, risk-free, reference rates.
While there is no immediate plan to discontinue the Hong Kong Interbank Offered Rate (HIBOR), the HKMA noted that “as a FSB member, [the HKMA] has an obligation to put in place an alternative reference rate as a contingent fall-back”, tentatively suggesting the HKD Overnight Index Average (HONIA) as the most suitable alternative. Click here to read more.
Authors: Kyle Wombolt and Anita Phillips
Kyle Wombolt, global head of corporate crime and investigations, and Anita Phillips, professional support consultant, have updated their guide to corporate investigations in China. This forms part of GIR’s acclaimed text, The Practitioner’s Guide to Global Investigations 2019, third edition. It is regarded as the only text covering the nuts and bolts of multi-jurisdictional corporate investigations.
Welcome to the December 2018 edition of our corporate crime update – our round up of developments in relation to corruption, money laundering, fraud, sanctions and related matters.
This month, we would like to wish all of our regular readers a very happy, and hopefully corporate crime free, festive season!
For the full update on each jurisdiction, please click on the name of the jurisdiction below. Continue reading
On 19 December 2018, the Hong Kong Monetary Authority (HKMA) announced that it will introduce supervisory measures (Supervisory Measures) focused specifically on measuring authorised institutions’ (AI) progress in implementing reforms to their culture. The Supervisory Measures include requiring AIs to complete and return self-assessment forms regarding their culture to the HKMA, and undertaking on-site reviews focused specifically on culture. For our full briefing on the supervisory measures, please click here.
As investment services go digital, Hong Kong regulators have found it necessary to issue tailored guidance to protect investors.
From 6 April and 23 August 2019 respectively, new guidelines from the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority will increase the regulatory requirements for financial institutions offering investment products via online platforms. Continue reading
The SFC has issued a circular to remind intermediaries to comply with the self-reporting obligation under paragraph 12.5 of the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission. Licensed corporations and registered institutions should review their incident escalation and reporting mechanisms as soon as possible and consider whether any enhancements are required.
Paragraph 12.5 requires intermediaries to report to the SFC immediately upon the happening of (among other things) any material non-compliance with any law, rules, regulations and codes administered by the SFC or any such suspected non-compliance.
The SFC has recently observed that some intermediaries have not promptly reported to the SFC non-compliance with various legal or regulatory requirements, such as suspected unlicensed dealing activities, non-compliance with the suitability requirements and order recording requirements under the above code of conduct, and breaches of record keeping rules.
The SFC reminds intermediaries that:
- registered institutions (although primarily regulated by the HKMA) are required to fulfil their reporting obligation by making the report directly to the SFC, in addition to reporting to the HKMA;
- all material non-compliance referred to under paragraph 12.5 should be reported as soon as practicable upon identification, ie, not after the intermediary has completed its investigation, obtained legal advice or taken remedial action;
- failure to comply with the reporting obligation may result in disciplinary action against intermediaries and their management.
The SFC also reminds intermediaries of:
The Hong Kong Monetary Authority (HKMA) has recently released its first Guidance Note on Cooperation with the HKMA in Investigations and Enforcement Proceedings.
In releasing the guidance note, the HKMA has expressly signalled its desire to encourage and facilitate cooperation, noting that its benefits include time, cost and resource savings to both the HKMA and institution or individual concerned. Continue reading
On 18 July 2018, the HKMA announced that it had concluded a consultation on its intended approach to open application programming interface (API) for the Hong Kong banking sector, and had published its final framework and implementation plan.
The open API is one of seven initiatives announced by the HKMA in September 2017 to bring Hong Kong into a “new era of smart banking”. Brief details of the consultation can be found in our briefing of February 2018.
The framework focuses at this stage on retail banking, but banks are welcome to extend the framework to other banking businesses as they consider appropriate. Please click here to read more.
On 5 July 2018, the Securities and Futures Commission (SFC) issued a consultation paper on proposals to amend the Guideline on Anti-Money Laundering and Counter-Terrorist Financing (Main Guideline) and the Prevention of Money Laundering and Terrorist Financing Guideline issued by the Securities and Futures Commission for Associated Entities (Guideline for AEs). Comments on the proposals are required to be submitted by 9 August 2018. Continue reading
On 20 April 2018, the Financial Stability Board (FSB) released its long awaited toolkit (Toolkit) for firms and regulators’ use in fighting misconduct risk. The Toolkit forms part of the FSB’s workplan to mitigate misconduct risk, and builds on existing measures such as the FSB’s guidance on sound compensation practices. Continue reading