James Parker (HK)

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Hong Kong: Hong Kong companies subject to a new “significant controllers” regime – effective 1 March 2018

Further to our previous blog post, the provisions of the Companies (Amendment) Ordinance 2018 will take effect on 1 March 2018. This amendment to the Companies Ordinance (Cap 622) (the Companies Ordinance) introduces new requirements on a company to identify persons who have “significant control” over the company and to maintain certain information about such … Continue Reading

Hong Kong: Proposed amendments to the Companies Ordinance to enhance the transparency of beneficial ownership of Hong Kong companies

The Companies (Amendment) Bill 2017 (the Bill) was recently published by the Hong Kong government and is under consideration by Hong Kong’s Legislative Council. The Bill seeks to amend the Companies Ordinance (Cap 622) (the Companies Ordinance) to require certain companies incorporated in Hong Kong to obtain and maintain information about beneficial owners. Subject to … Continue Reading

Hong Kong: SFC consults on proposed measures to improve cyber security for internet trading of securities in Hong Kong

A two-month consultation on proposed measures to reduce and mitigate cyber security risks associated with internet trading of securities in Hong Kong (the Consultation) was launched on 8 May 2017 by the Securities and Futures Commission (the SFC). The Consultation follows a recent review by the SFC of resilience of brokers in Hong Kong to … Continue Reading

Hong Kong securities regulator launches consultation on proposed amendments to the Professional Investor Rules

The Securities and Futures Commission (the SFC) recently launched a public consultation process in respect of proposed amendments to the Securities and Futures (Professional Investor) Rules (Chapter 571D of the Laws of Hong Kong) (the Professional Investor Rules).  The public consultation process was launched on 1 March 2017. The principal changes proposed in respect of … Continue Reading

Hong Kong: Changes to the Guidance Note on Corporate Governance

What you and your board need to know Changes to GN10 From 1 January 2017, the first phase of changes to the Hong Kong Insurance Authority’s Guidance Note on the Corporate Governance of Authorized Insurers (GN10), will take effect. The second phase of changes (which are more substantive) will take effect from 1 January 2018, … Continue Reading

Hong Kong securities regulator to commence ‘regtech’ project

The Hong Kong securities regulator, the Securities and Futures Commission (SFC), will commence a pilot project next month to assess how ‘fintech’ can be used in its regulatory monitoring processes with a view to implementing new systems. A sample group of 20 banks will be participating in the pilot project along with an external technology … Continue Reading

Hong Kong Monetary Authority’s fintech sandbox

On 6 September 2016, the Hong Kong Monetary Authority (HKMA) released a circular advising the launch of its Fintech Supervisory Sandbox (Sandbox). The Sandbox is intended to facilitate pilot trials of newly developed technologies and applications by authorized institutions (AIs) without the need to achieve full compliance with HKMA’s requirements, thereby allowing AIs to collate … Continue Reading

Hong Kong: Changes ahead in insurance regulation

The Office of the Commissioner of Insurance (OCI) recently released its 2015 Annual Report, highlighting the considerable challenges and changes ahead for the insurance industry and the OCI. Essential preparation is underway for the OCI to be succeeded by Hong Kong’s new insurance regulator, the Independent Insurance Authority (IIA), which is expected to start operation … Continue Reading

Hong Kong: Insurance regulator issues guidance note on reinsurance activities

The Office of the Commissioner of Insurance (OCI) issued on 1 June 2016 a new guidance note on prudent practices relating to reinsurance management and general guiding principles in assessing the adequacy of the reinsurance arrangements of authorized insurers (the Guidance Note). The purpose of the Guidance Note is to set out Hong Kong reinsurance … Continue Reading

Hong Kong: PRC residents to receive fact statements when purchasing insurance policies in HK

The Insurance Commissioner recently announced that his office is working with the Hong Kong Federation of Insurers to better protect Chinese residents who purchase insurance policies in Hong Kong. From mid-2016, all Chinese residents who purchase Hong Kong insurance policies will be required to sign and acknowledge a fact statement that they understand key differences … Continue Reading

Hong Kong: Increased supervision and oversight in HK and the USA of regulated entities

On 20 May 2016, the Securities and Futures Commission (SFC) announced it had entered into a memorandum of understanding (MoU) with the United States’ Financial Industry Regulatory Authority (FINRA). The MoU records the authorities’ willingness to provide mutual assistance in the supervision and oversight of regulated entities that operate on a cross-border basis in Hong … Continue Reading

Hong Kong: SFC announces timetable for implementation of Code of Conduct changes

On 21 March 2016, the Securities and Futures Commission (SFC) announced that it would synchronise the implementation of certain changes to the SFC’s Code of Conduct for Persons Licensed by or Registered with the SFC (Code). These changes relate to: new paragraph 15 of the Code, which came into effect on 25 March 2016, and … Continue Reading

Hong Kong: Proposed introduction of open-ended fund company structure welcomed

Currently, open-ended investment funds may be established in Hong Kong as unit trusts, but not in corporate form due to restrictions on capital reduction under the Companies Ordinance (CO). The Securities and Futures (Amendment) Bill 2016 (Bill), which was gazetted on 15 January 2016, seeks to amend the Securities and Futures Ordinance (SFO) to introduce … Continue Reading

Hong Kong financial services: SFC introduces “suitability clause” to protect investors

Key points: The Securities and Futures Commission has introduced a “suitability clause” for client agreements governing the sale of financial products by intermediaries. The clause will provide a mechanism for investors to claim contractual damages against an intermediary where the licensed person either recommends a financial product or solicits its sale and the product is … Continue Reading

Hong Kong: Much-anticipated Financial Institutions (Resolution) Bill Gazetted

On 20 November 2015 the Hong Kong Government published the Financial Institutions (Resolution) Bill (the Bill). The Bill seeks to bring Hong Kong into line with the latest international standards – the Financial Stability Board (FSB) ‘Key Attributes of Effective Resolution Regimes for Financial Institutions’ (Key Attributes) and to establish an effective cross-sector resolution regime … Continue Reading

Implementation of Enhanced Competency Framework for Private Wealth Management Practitioners

On 23 October 2015, the Hong Kong Monetary Authority (HKMA) published a circular on the progress of Registered Institutions’ implementation of the enhanced competency framework (ECF) for private wealth management practitioners, following the HKMA’s survey on private banks’ implementation progress and plans for the ECF. The ECF was launched in June 2014 and the initial … Continue Reading

Revised Capital Rules for Banks

The Financial Services and the Treasury Bureau have recently stated that as an international banking and financial centre, Hong Kong supports the consistent implementation of international standards across all Basel Committee member jurisdictions. The statement was made in relation to the gazetting of the Banking (Capital) (Amendment) Rules 2015 on 23 October 2015 which introduced … Continue Reading

Hong Kong Monetary Authority: Revised guideline on the application of the Banking (Disclosure) Rules following implementation of Basel III framework standards

On 6 August 2015, the Hong Kong Monetary Authority (HKMA) issued an updated version of Supervisory Policy Manual module CA-D-1: Guideline on the Application of the Banking (Disclosure) Rules (Guideline). The revised Guideline reflects the amendments to the Banking (Disclosure) Rules (Cap. 155M) made in light of the implementation of Basel III framework standards[1] in … Continue Reading

Hong Kong: Extension of profits tax exemption to PE funds welcomed

The Inland Revenue (Amendment) (No. 2) Ordinance 2015 (Amendment Ordinance) was gazetted and came into force on 17 July 2015. It amends the Inland Revenue Ordinance. Before the enactment of the Amendment Ordinance, the Inland Revenue Ordinance offered a profits tax exemption for certain transactions conducted by offshore funds in respect of eligible overseas portfolio … Continue Reading

Breaking news – Hong Kong: Passing of Insurance Companies (Amendment) Bill 2014

The Hong Kong Legislative Council passed the Insurance Companies (Amendment) Bill 2014 today (10 July 2015). The Bill will need to be gazetted before it becomes law. The Secretary for Financial Services and the Treasury, Professor KC Chan, indicated that the Ordinance will be brought into force in three stages. This is to facilitate the … Continue Reading

Hong Kong Consultation Conclusions on supervisory assistance to overseas regulators

On 5 June 2015, the Securities and Futures Commission (SFC) published its consultation conclusions on proposed amendments to the Securities and Futures Ordinance (SFO) for providing assistance to overseas regulators in certain situations. The proposed amendments will give the SFC discretion to provide supervisory assistance to an overseas regulator, but will not impose an obligation … Continue Reading

Financial Institutions Symposium hosted by Norton Rose Fulbright in Sydney

Technology-led innovation has the potential to truly disrupt existing business models and distribution channels in the financial services industry. In Australia and more broadly, we have seen start-ups build innovative payment systems, peer-to-peer lending platforms, crypto-currencies, robo-advice and automated investment management. However, the large institutions are well capitalised, have large customer bases and are adapting … Continue Reading

Hong Kong Joint HKMA and SFC Consultation Conclusions on OTC Derivative Transactions Reporting and Record Keeping Rules Published

Consultation Conclusions on reporting and record keeping rules for OTC derivatives On 15 May the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) published Consultation Conclusions on their further consultation on rules on mandatory reporting and related record keeping obligations under the new over-the-counter (OTC) derivatives regime (Rules). The consultation considered … Continue Reading

Enhancements to the Deposit Protection Scheme: Hong Kong Consultation Conclusions Published

On 8 May 2015, the Hong Kong Financial Services and the Treasury Bureau (FSTB) and Hong Kong Monetary Authority (HKMA) jointly published their Consultation Conclusions on Enhancements to the Deposit Protection Scheme (DPS) (the Consultation Conclusions).The Consultation Conclusions set out the FSTB’s and HKMA’s responses to the three-month public consultation (the Consultation) with the intention … Continue Reading