Asia

Topic: Regulation and compliance

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SFC provides licensing guidance for private equity firms and family offices

On 7 January 2020, the SFC issued guidance on the licensing obligations of private equity (PE) firms and family offices which conduct business in Hong Kong. This guidance took the form of two circulars, the first of which relates to PE firms (the First Circular) and the second relates to family offices (the Second Circular). … Continue Reading

Global Asset Management Quarterly – 13th edition now available online

The latest issue of Global Asset Management Quarterly is now available here. This issue contains the following articles: UK/Europe UK and European overview The new EU prudential regime for investment firms Navigating the AIFMD EU progresses on its Sustainable Finance Action Plan Contracting for indices EU/UK regulatory roundup Luxembourg update Ireland update Asia Pacific The … Continue Reading

MAS Consultation Paper on Proposed Regulatory Approach for Derivatives Contracts on Payment Tokens

The Monetary Authority of Singapore (MAS) recently issued a consultation paper setting out its proposed regulatory approach for derivatives contracts that reference payment tokens as underlying assets (Payment Token Derivatives). What is this approach meant to address? A well-regulated market for derivatives – particularly one anchored by institutional investors with sophisticated risk management and investment … Continue Reading

SFC issues guidance to asset managers to tackle market misconduct

The SFC has identified a growing number of arrangements and transactions involving dubious private funds or discretionary accounts during recent inspections conducted on asset managers, raising concerns that asset managers are simply following investor’s instructions when structuring private funds or discretionary accounts and effecting transactions, and turning a blind eye to potential red flags. The … Continue Reading

ASIFMA launches new industry white paper on Tokenised Securities

We have recently partnered with the Asia Securities Industry & Financial Markets Association (ASIFMA) on its new industry white paper titled, “Tokenised Securities – A Roadmap for Market Participants and Regulators.” The report analyses how the new value chain will impact market participants, including incumbent financial institutions (FIs) and issuers, and looks at areas they … Continue Reading

The HKMA issues consumer protection guidance for banks using big data analytics and artificial intelligence

Following the guidance issued by the Hong Kong Monetary Authority (HKMA) to authorized institutions (AIs) on use of artificial intelligence earlier this month (to read our previous blog, please click here), the HKMA has issued a further set of guiding principles to AIs, focusing on consumer protection, when adopting big data analytics and artificial intelligence … Continue Reading

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

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

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

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

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

Hong Kong: BCBS issues statement on crypto-assets

The Basel Committee on Banking Supervision (BCBS) have shone a light on the risks associated with crypto-assets in a statement issued on 13 March 2019, calling on banks who acquire exposures to crypto-assets to take appropriate and specific measures to mitigate such risks. The BCBS is the primary global standard setter for the prudential regulation … Continue Reading

Hong Kong: HKMA publishes Open API Framework

The Hong Kong Monetary Authority (HKMA) has recently (18 July 2018) released its final Open API Framework. The formulation of the Open API Framework is one of the seven initiatives announced by the HKMA in September 2017 to facilitate the move into a new era of Smart Banking. The framework sets out a phased approach to … Continue Reading
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