The SFC announces new regulatory framework for virtual assets trading platforms

At the Hong Kong Fintech week, the Chief Executive Officer of the Securities and Futures Commission (SFC), Mr Ashley Alder, announced the rollout of a new regulatory framework for virtual asset trading platforms.  The regulation of virtual asset trading platforms (and whether they should fall within the SFC’s regulatory oversight) has been a key regulatory … Continue Reading

The HKMA issues guidance on use of artificial intelligence by banks

In response to the growing use of artificial intelligence (AI) by banks, the Hong Kong Monetary Authority (HKMA) has provided guidance to the banking industry on the use of AI applications.  These are high level principles (set out briefly below) which banks are expected to take into account when designing and adopting their AI and … Continue Reading

The SFC issues guidance on the use of external electronic data storage

The Securities and Futures Commission (the SFC) has issued a circular (the Circular) to licensed corporations (LCs) on the use of external electronic data storage providers[1] (EDSPs) and updated the frequently asked questions on the premises for business and record keeping in light of the Circular. In addition to setting out the SFC’s expectations for … Continue Reading

Financial services monthly wrap up – October 2019

In October 2019, the much-anticipated bill to end grandfathered conflicted remuneration was passed, with the ban effective from 1 January 2021. There have also been recent developments in the Courts in relation to the definition of personal advice as well as a joint ASIC report on the role and shortcomings of disclosure in financial services. … Continue Reading

The HKMA clarifies consumer protection expectations under Open API Framework

The Hong Kong Monetary Authority (the HKMA) has issued a circular to authorized institutions (AIs) to clarify expectations around the minimum level of consumer protection required under the Open API Framework.  For background information on Hong Kong’s Open API Framework, please refer to our previous blog post on its initial launch here as well as … Continue Reading

The HKMA revises SPM on risk management of e-banking

The Hong Kong Monetary Authority has revised its supervisory policy manual module TM-E-1 (SPM) on risk management of e-banking.  This SPM is a non-statutory guideline issued as a guidance note. The revisions are intended to strengthen risk management controls for e-banking given the rise in cyber threats and fraud risks, introduce changes to cater for … Continue Reading

Insurance Authority issues guidance on licensing requirements for banking sector dealing with insurance under new insurance intermediaries regime

The Insurance Authority has issued an explanatory note to provide guidance on the extent to which certain banking activities involving insurance would be regarded as regulated activities under the new regulatory regime for insurance intermediaries (to read further on the new regime which came into operation on 23 September 2019, please refer to our blog … Continue Reading

Enhancements to investor compensation regime gazetted – effective 1 January 2020

On 11 October 2019, the Government and the Securities and Futures Commission (SFC) published the Securities and Futures (Investor Compensation – Levy) (Amendment) Rules 2019, the Securities and Futures (Investor Compensation – Compensation Limits) (Amendment) Rules 2019 and the Securities and Futures (Investor Compensation – Claims) (Amendment) Rules 2019 (together, the IC Amendment Rules) in … Continue Reading

SFC publishes pro-forma terms and conditions for licensed corporations which manage portfolios that invest in virtual assets

On 4 October 2019, the Securities and Futures Commission (SFC) published the pro forma terms and conditions (the Terms and Conditions) applicable to licensed corporations managing a fund (or portion of a fund) that invests in virtual assets and meet the de minimis threshold [1] (Virtual Assets Fund Manager) . This follows the SFC’s earlier … Continue Reading

SFC consults on new regulatory regime for depositaries of SFC-authorized collective investment schemes

On 27 September 2019, the Securities and Futures Commission (SFC) issued a consultation paper on the proposed regulatory regime for depositaries of SFC authorised collective investment schemes (the Proposals). The Proposals, which are part of the SFC’s strategy to strengthen Hong Kong as an international, full service asset management centre and to enhance the regulation … Continue Reading

Singaporean court’s decision in relation to cryptocurrency trading has implications for cryptocurrency trading mistakes, smart contracts, artificial intelligence and whether cryptocurrency is property

The Singapore International Commercial Court has published its first cryptocurrency judgment. In this briefing note we discuss the key novel points arising from the case (B2C2 Ltd v Quoine Pte Ltd [2019] SGHC(l) 3) and consider the implications for digital assets, smart contracts and artificial intelligence.… Continue Reading

German regulator updates its guidance on the EU-US Covered Agreement

The German regulator BaFin has updated its guidance on the conduct of reinsurance business by US insurers in Germany under the provisions of the 2017 EU-US Covered Agreement (“Bilateral Agreement between the European Union and the United States of America on prudential measures regarding insurance and reinsurance”). An English language version has also been published, … Continue Reading

Insurance intermediaries countdown to 23/09 – are you ready?

With less than a week before the Insurance Authority (IA) takes over the regulation of insurance intermediaries on 23 September 2019 (please refer to our earlier blog post), we round up the following recent related announcements: On 30 August 2019, the IA issued a circular reminding each authorized insurer that upon the commencement of the … Continue Reading

FATF releases Hong Kong Mutual Evaluation Report

On 4 September 2019, the Financial Action Task Force (FATF) published their mutual evaluation report (the Report) on the level of compliance with the FATF recommendations and the effectiveness of Hong Kong’s anti-money laundering (AML) and counter-terrorist financing (CTF) system. Overall, the Report is positive and concludes that Hong Kong has generally sound and effective … Continue Reading

Hong Kong: The HKMA introduces a new Resolution Facility for banks

On 26 August 2019, the Hong Kong Monetary Authority (HKMA) announced that it has completed a review of its framework for the provision of Hong Kong dollar liquidity (the Liquidity Facilities Framework) to authorized institutions (AIs) in light of its ongoing work on Hong Kong’s resolution regime.  As part of this, the HKMA has introduced … Continue Reading

Global Asset Management Quarterly

The latest issue of Global Asset Management Quarterly is now available here. In this issue we cover: Sustainable finance is a trend set to stay Brexit: latest developments Luxemburg update Ireland update The proposed Australian corporate collective investment vehicle SFC raises disclosure requirements for Green or ESG funds Mutual recognition of funds: Netherland – Hong … Continue Reading

What do ASIC’s proposals mean for foreign financial services providers?

Introduction As noted in our earlier update, ASIC has released its updated proposals for the licensing relief available to foreign financial services providers (FFSPs) servicing wholesale clients in Australia, with the release of Consultation Paper 315. In summary, ASIC has proposed to: extend the expiry of the sufficient equivalence relief and limited connection relief until … Continue Reading

Financial services monthly wrap up – June 2019

In June 2019 ASIC released its estimates for the Industry Funding levy for the 2018-19 financial year. Further, ASIC and APRA have formally commenced consultation on product intervention powers and product responsibility under the Banking Executive Accountability Regime respectively. 1 July 2019 also marks the commencement date of a variety of new and updated legislation … Continue Reading

Open Banking around the world | A global comparative guide

The UK continues to be the global pioneer in open banking through the implementation of the EU PSD2 and the CMA open banking initiative. However, through regulatory reforms and/or market-led initiatives, many jurisdictions are now catching up. Working with our colleagues across the globe, we have produced a comparative guide to open banking as part … Continue Reading

Consensus New York & Blockchain week – key takeaways

Partners from our global FinTech team flew in from Hong Kong, Vancouver, London and Dallas to join our New York team to attend Consensus and Blockchain week in NYC (13-15 May).  Consensus is an annual global conference which brings together the world’s most innovative minds to explore and debate the future of blockchain and crypto. … Continue Reading

Hong Kong: Insurance Authority to take over regulation of intermediaries from 23 September 2019

With effect from 23 September 2019, the Hong Kong Insurance Authority (the IA), an independent statutory body, will take over regulation of insurance intermediaries from the three existing self-regulatory organisations (the Hong Kong Confederation of Insurance Brokers, the Professional Insurance Brokers Association, and Insurance Agents Registration Board) and administer a new statutory licensing regime. The … Continue Reading

Global Regulatory Enforcement and Sanctions Trends for 2019

In this on-demand webinar, members of our Regulatory, Compliance and Investigations team in London, France, the US and Hong Kong give their thoughts on likely regulatory enforcement and sanctions trends for the rest of this year based on recent enforcement cases and forward looking statements from the regulators. Topics discussed include individual accountability, anti-money laundering … Continue Reading

Hong Kong: SFC releases consultation conclusions on proposed guidelines for securities margin financing activities

On 4 April 2019, the Securities and Futures Commission (SFC) released the conclusions of its consultation on proposed guidelines for securities margin financing activities (the Guidelines). The existing conduct requirements for securities margin financing activities are mainly prescribed in the Code of Conduct for Persons Licensed by or Registered with the SFC and the Management, … Continue Reading

Hong Kong: SFC issues reminder about security token offerings

On 28 March 2019, the Securities and Futures Commission (SFC) published a statement reminding parties who engage in security token offerings (STOs) to be aware of the applicable legal and regulatory requirements.  This statement is helpful given that STOs are a relatively new form of token issuance. STOs are specific offerings which are structured to … Continue Reading