To some of us it feels like just yesterday that the asset management industry was grappling with the legislative powers in the EU to make sense of the early drafts of the AIFMD. And yet here we are again, as the European Commission yesterday published its public consultation on the review of the AIFMD (the “Consultation”). The Consultation marks the Commission’s first deep engagement with the public on the road to what could end up being a significant reform and it brings up again some of the issues that vexed engagement during the introduction of the AIFMD.
Tag: investor protection
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 Financial Dispute Resolution Centre (FDRC) in Hong Kong has issued its conclusions to its consultation on proposals to significantly expand the jurisdiction of the Financial Dispute Resolution Scheme (FDRS), its alternative dispute resolution scheme for conflicts between financial institutions and their individual customers. The FDRC’s consultation met with mixed responses, with respondents from the banking and securities sectors opposing the proposed changes while other respondents, including the Department of Justice and consumer rights groups, supported the suggested reforms. Given this, the FDRC has chosen to implement a more moderate package of reforms than those it originally contemplated (as outlined in our October e-bulletin).
The key changes from the consultation paper include:
- raising the maximum claimable amount to HK$1,000,000. This is an increase from the current limit of HK$500,000, but significantly lower than the proposed increase to HK$3,000,000;
- extending the limitation period for lodging claims from 12 months to 24 months from the date of purchase of the financial instrument or date of first knowledge of loss, whichever is later, rather than the 36 months previously suggested; and
- that the FDRC will cease its current practice of providing case information such as application forms, mediated settlement agreements or arbitral awards, to the Securities and Futures Commission and Hong Kong Monetary Authority. However, it will continue to provide monthly reports regarding the number and type of disputes handled by the FDRC and information regarding systemic issues and suspected serious misconduct.
The FDRC also announced that it will enact a range of other reforms in a form largely unchanged from that proposed in its consultation paper. These include:
- expanding the scope of eligible claimants by allowing “small enterprises” to bring complaints against financial institutions (FIs);
- accepting applications for claims which are under current court proceedings without requiring the claimant to withdraw the case from court; and
- introducing a voluntary referral system.
These reforms amount to a sizeable expansion of the FDRC’s jurisdiction. As foreshadowed in our previous bulletin, FIs are likely to see an increase in claims being accepted by the FDRC once these reforms are enacted, though this increase is likely to be smaller than that which would have resulted from the enactment of the FDRC’s original proposals. The amended terms of reference for the FDRS are expected to take effect on 1 January 2018, with the exception of the reforms allowing small enterprises to bring claims, which will take effect on 1 July 2018.
Our recent e-bulletin sets out the reforms in more detail. If you wish to discuss these further, please do not hesitate to contact our Hong Kong team featured on the e-bulletin or your usual Herbert Smith Freehills contact.
On 28 June 2017, the FCA published the highly anticipated final findings of its Asset Management Market Study ("Final Report"), which can be accessed here. This follows the release of its interim report in November 2016 and the subsequent intensive consultation process with industry, in which some 153 submissions were filed.