COVID-19 Governance: SFC extends deadline for data storage compliance (Hong Kong)

The Hong Kong Securities and Futures Commission (SFC) has extended its deadline for licensed corporations to confirm compliance with its new data storage regulations, due to the COVID-19 outbreak.

On 31 March 2020, the SFC granted a six-month extension to the implementation deadline for aspects of its 31 October 2019 circular on the use of external electronic data storage providers (EDSPs) by licensed corporations for the storage of regulatory records (EDSP Circular).

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SFC clarifies licensing obligations of PE firms and family offices which conduct business in Hong Kong

On 7 January 2020, the Securities and Futures Commission (SFC) issued two circulars to clarify aspects of the licensing obligations applicable to private equity (PE) firms and family offices which conduct business in Hong Kong.

The circulars have been issued in response to enquiries from industry participants and their professional advisers.

An overview of the key aspects covered by the circulars is set out below. New entrant PE firms and family offices should take note of the circulars when determining whether an application for a licence should be made to the SFC. Existing PE firms and family offices should also review the circulars to ensure that they comply with the relevant licensing requirements.

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Hong Kong SFC publishes licensing conditions for virtual asset fund managers

On 4 October 2019, the Securities and Futures Commission (SFC) published proforma terms and conditions which will apply to virtual asset fund managers that meet specified criteria.

This follows the SFC’s statement of 1 November 2018 regarding the regulatory framework for virtual asset fund managers, fund distributors and trading platform operators (see our e-bulletin of 2 November 2018 for further details), in which the SFC indicated (among other things) that it would impose terms and conditions on certain virtual asset fund managers.

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Hong Kong SFC highlights inadequacies and deficiencies in fund managers’ liquidity risk management practices

The Securities and Futures Commission (SFC) has recently issued a circular on the outcome of its survey and inspection of selected fund managers regarding their liquidity risk management practices.

The SFC noted inadequacies and deficiencies in a number of areas. These are set out in the appendix to the circular, together with observations and examples of such inadequacies and deficiencies, and the SFC’s expected standards (see overview below).

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Hong Kong SFC launches key risk indicator platform to enhance risk monitoring

Last Friday, the Securities and Futures Commission (SFC) issued a circular to announce the launch of a key risk indicator (KRI) platform to collect and analyse KRI data from selected licensed corporations (LCs).

The platform is aimed at facilitating the SFC’s supervision of global firms which are exposed to the changing dynamics of global markets. It supplements the SFC’s existing monitoring tools and enhances the SFC’s information gathering and analytical capabilities to better identify and manage existing and emerging risks.

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Hong Kong Stock Exchange revises Listing Rules to tighten restrictions on backdoor listings

The Hong Kong Stock Exchange has finalised its proposed amendments to the Listing Rules to tighten restrictions on backdoor listings and continuing listing criteria. The changes are aimed at combatting listed company shell activities which have been the subject of ongoing regulatory scrutiny in recent years. Continue reading