Following the end of a 6-month transition period, the Manager-In-Charge (MIC) regime introduced by the Securities and Futures Commission (SFC) is now fully implemented, starting from 17 October 2017.
The regime seeks to heighten the accountability of senior management at licensed corporations and to promote greater awareness of their obligations. Under the MIC regime, licensed corporations are required to review their current organisational structure, the roles of senior management and their current responsible officers (ROs) in light of the SFC’s classification of core functions within licensed corporations and its guidelines on identifying MICs. The MIC regime also imposes new reporting requirements on licensed corporations.
Around 10,000 MICs were appointed during the transition period. Of these, roughly 40% are not (and are not required to be) licensed persons as they do not conduct regulated activities. Rather, these MICs are primarily responsible for managing operations or control functions, such as compliance, risk management, finance, information technology and anti-money laundering.
MICs with overall management oversight and key business functions are expected to be ROs and the majority of them are already so. The SFC is currently dealing with applications from a further 500 MICs who are responsible for these two functions.
Separately, on 16 October 2017, the Hong Kong Monetary Authority (HKMA) issued a circular requiring banks which are registered with the SFC (registered institutions) to submit their up-to-date management structure information and organisational charts via email to both the HKMA and the SFC between 16 March 2018 and 16 April 2018. Registered institutions are advised to start preparing the required information ahead of time.
For more information on the MIC regime, please refer to the SFC’s circular issued on 16 December 2016, and our previous publication which contains some key questions to help licensed corporations assess their compliance with the MIC regime. A copy of HKMA’s circular can also be found here.