The Hong Kong Monetary Authority (HKMA) has issued a circular announcing that it will defer the implementation of the Basel III final reform package,[1] in line with the revised timeline announced by the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision (BCBS). The … Continue Reading
The Hong Kong Monetary Authority (the HKMA) has issued a circular to registered institutions (RIs) drawing their attention to the circulars recently published by the Securities and Futures Commission (the SFC), namely: (i) circular on extended deadlines for implementation of regulatory expectations and reminder of order recording requirements under COVID-19 pandemic (the Order Recording Circular) … Continue Reading
The Securities and Futures Commission (SFC) has published a set of frequently asked questions (FAQs) on licensing related matters to facilitate intermediaries and licensing applicants in navigating their compliance challenges during the COVID-19 pandemic. The SFC aims to provide regulatory flexibility whilst ensuring that market integrity and investor protection principles are maintained. The FAQs cover … Continue Reading
The Securities and Futures Commission (SFC) has published a set of frequently asked questions (FAQs) on licensing related matters to facilitate intermediaries and licensing applicants in navigating their compliance challenges during the COVID-19 pandemic. The SFC aims to provide regulatory flexibility whilst ensuring that market integrity and investor protection principles are maintained. The FAQs cover … Continue Reading
The Securities and Futures Commission (SFC) has issued a circular to intermediaries reminding licensed and registered persons to take extra care to comply with their Code of Conduct[1] obligations to ensure that they are acting in their clients’ best interests given the potential impact of the COVID-19 outbreak on market volatility and liquidity, as well … Continue Reading
Further to the Phase 1 temporary facilitative measures (TFMs) introduced by the Insurance Authority (IA) on 21 February 2020, the IA has announced the second phase of TFMs in view of the development of the COVID-19 pandemic, in order to reduce the risk of infection from in person meetings during the sales process for insurance … Continue Reading
In response to the increasing prevalence of algorithmic trading (algo-trading) in the banking industry (e.g. for executing trade orders and market making for foreign exchange-related transactions), the Hong Kong Monetary Authority (the HKMA) has issued a circular setting out its supervisory expectations with regard to risk management practices for algo-trading activities which authorized institutions (AIs) … Continue Reading
The Hong Kong Monetary Authority (the HKMA) has published a consultation paper (the Consultation) on rules relating to contractual stays on termination rights in certain financial contracts (Stay Rules) for authorized institutions (AIs) under the Financial Institutions (Resolution) Ordinance (FIRO). The Stay Rules require in scope AIs to adopt appropriate provisions in certain non-Hong Kong … Continue Reading
The Securities and Futures Commission (SFC) has issued its consultation conclusions on the proposed margin requirements for non-centrally cleared OTC derivative transactions set out in its consultation paper issued on 19 June 2018 (the Consultation Paper) following submissions from industry associations, market participants and other stakeholders. By way of recap, the Consultation Paper contains proposals … Continue Reading
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
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
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
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
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
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
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
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 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 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 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
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
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
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
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
