Due to the current COVID-19 pandemic and ensuing disruption to the securities industry, the Securities and Futures Commission (SFC) has announced, in its recent circular, that it will extend various upcoming regulatory compliance deadlines by a period of six months. In the same circular, the SFC has also reminded intermediaries of the alternative order recording options that may be adopted during the pandemic.
Snapshot of extensions to regulatory compliance deadlines
|Relevant circular||Summary of regulatory obligation||Original compliance deadline||Extended deadline|
|Circular on use of external electronic data storage
(To read our previous blog post on this circular, please click here.)
|Where a data centre of an external electronic data storage provider (EDSP) used by a licensed corporation (LC) has been approved under section 130 of the Securities and Futures Ordinance (the SFO) before 31 October 2019, the LC must provide the prescribed documents set out in paragraph 25 of the circular to the SFC.||30 June 2020||31 December 2020
Please note that LCs currently keeping records exclusively with EDSPs, whether in Hong Kong or overseas, are required to notify the SFC without delay.
|Circular on new measure to protect client assets||Intermediaries are required to have the countersigned acknowledgement letters in place from relevant banks (in the prescribed form) before depositing any client money or securities into any new client or trust account.||31 July 2020||31 January 2021|
|Circular on Data Standards for Order Life Cycles||In-scope licensed securities brokers are expected to implement system changes and make other related arrangements to comply with data standards set out in the circular.||31 October 2020||30 April 2021|
Compliance with order recording requirements
In light of the COVID-19 pandemic, the SFC is aware that many intermediaries have provided their staff with remote access to order management systems, which are capable of centralised order recording for orders placed from a remote location.
However, certain intermediaries may encounter challenges in complying with the order recording requirements set out in the Code of Conduct for Persons Licensed by or Registered with the SFC. The SFC has therefore reminded intermediaries of the availability of alternative order receiving and recording options for complying with regulatory requirements. These options can be adopted by intermediaries as appropriate to meet the needs of their existing circumstances, although the SFC expects intermediaries to have in place appropriate control measures for the proper implementation of the alternative options.
For further details, please refer to the circular.