News & Insights

New senior management accountability regime for SFC licensed corporations

On 16 December 2016, Hong Kong’s Securities and Futures Commission (SFC) announced a new initiative to augment the accountability of senior management of SFC licensed corporations (LCs). Details of the regime are set out in a Circular and 40 FAQs.

The SFC has now made it clear that the senior management of an LC includes directors, Responsible Officers (ROs), and a new designation referred to as “Managers-In-Charge of Core Functions” (MICs). There are eight core functions (covering front, middle and back office) and each of these will need at least one designated MIC (although the same individual can be the MIC for more than one core function). MICs will only need to hold an SFC licence if they conduct an activity regulated under the Securities and Futures Ordinance and no new regulated activities are being created, but the MIC will nevertheless be regulated due to his or her involvement in the management of the LC’s business. The SFC is also going to mandate that individuals with responsibility for the Overall Management Oversight core function and each Key Business Line core function be approved as ROs if they are not already.  

The key dates for the implementation of the new regime are:

18 April 2017: The SFC will start to accept MIC information and management organisational charts from all LCs and new corporate licence applicants

17 July 2017: Deadline for LCs to have submitted these details

16 October 2017: Deadline for MICs who need to be approved as ROs to submit applications

For many of the 2000+ LCs, compliance with the regime within the given timeframe will be a challenge. We will issue more detailed analysis and practical guidance for LCs and MICs in January 2017. If you are not on our mailing list, please sign up here.

Key Contacts

Mary Nieto

General Counsel | Financial Services

Email or call +852 2826 5366

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