SFC licensing and compliance hints – Apr 2015

Do you have the resources? The SFC issued a circular to brokers on 15 April 2015 reminding them to monitor their financial and operational capabilities closely and maintain sufficient resources to cope with the recent market turnover and volatility.

The SFC reminded brokers about General Principle 3 (Capabilities) of the Code of Conduct. Asset managers should also take note of the circular and remember to:

• closely monitor changes in the required liquid capital caused by increases in the size of business and maintain sufficient liquid capital to ensure compliance with the Financial Resources Rules at all times;
• diligently supervise operations in order to mitigate operational risks and safeguard clients’ interests as under changing market conditions, operational failures, mistakes or omissions can result in significant adverse financial and operational consequences; and
• constantly monitor and review its operating capability, both in terms of human resources and system capacity, to ensure the proper performance of its business activities.

Another break in SFC annual licensing fees:  On 2 April 2015 the SFC reminded the industry of its announcement in March 2014 regarding a two-year wavier of annual licensing fees from 1 April 2014 for all licensed corporations and registered institutions:
http://www.sfc.hk/edistributionWeb/gateway/EN/circular/openFile?refNo=14EC13

The waiver covers fees payable by firms as well as licensed individuals. The waiver applies to annual licensing fees but not to fees for licence applications or transfers of accreditation.

Let’s talk about CPT:  The first quarter of 2015 is already behind us so it is time to remind all licensed individuals to plan ahead for meeting their 2015 CPT requirements in order to avoid a year-end rush. Internal training can be counted for these purposes provided it meets the SFC’s requirements as set out in the Guidelines on Continuous Professional Training.