News & Insights

The SFC’s revised application lapse policy

On 29 November 2013, Hong Kong’s Securities and Futures Commission (SFC) announced that, from 1 January 2014, applications for the authorisation of investment products will automatically lapse if, for any reason, authorisation is not granted within six months of the SFC’s take up of the application. The SFC’s circular is available here.

The policy will apply to applications for the authorisation of unit trusts and mutual funds (including ETFs), investment-linked assurance schemes, unlisted structured products and real estate investment trusts, but will not apply to applications for authorisation of approved pooled investment funds under both the Code on Unit Trusts and Mutual Funds and the SFC Code on MPF Products.

This revised policy reduces the time allowed for the application process to six months from the 12-month period introduced in 2010. The SFC’s stated aim is to “enhance the authorisation process”, noting that delays by applicants “adversely impact other applicants who are ready and able to launch … but whose applications could not be processed speedily because the SFC’s resources are taken up by applicants that are not ready.”

Once an application has lapsed, the application fee will not be refunded. If the applicant wishes to continue to seek authorisation for the product, it will be required to submit a new application and pay an application fee.

The lapse period runs from the date the SFC accepts the application, which is known as the “take-up date”. Applicants are reminded that the SFC may refuse to take up the application where materials submitted are not in good order or otherwise not considered suitable for processing.

The revised policy comes into effect on 1 January 2014. Applications received before that date will continue to be subject to the 12-month lapse policy.

Key Contacts

Jeremy Lam

Partner | Financial Services

Email or call +852 2825 9732

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