News & Insights

SFC compliance and licensing hints – Feb 2017

New items in new licensing forms

There are a few new items found in the new paper-based licensing forms. Existing licensed individuals applying to become an RO for new regulated activities, or for a new corporate applicant, now need to complete those questions about disciplinary actions and investigations, financial status, character and mental health again to confirm or update information previously supplied. The SFC has also incorporated some of their usual follow up questions in the application form(s), for example how often does an offshore RO intend to travel to Hong Kong to conduct regulated activities; and questions on time allocation and conflicts of interest issues for individuals that have other directorships, partnerships, proprietorships or business interests.

Take immediate actions to rectify AML / CFT breaches or deficiencies

The SFC issued a circular on compliance with AML / CFT requirements on 26 January 2017 after the completion of thematic inspections. It also published key inspection findings, examples of deficiencies, inadequacies and good practices. As the SFC will continue to focus on AML / CFT compliance in the coming year, licensed companies should do their own assessment to see if they need to make any further enhancements of their existing AML / CFT policies and procedures taking into account the examples of deficiencies, inadequacies and good practices given by the SFC.

SFC enhances supervision of entities licensed with SEC

The SFC announced on 19 January 2017 that it has entered into a memorandum of understanding with the U.S. Securities and Exchange Commission. They will assist each other in supervising entities that operate on a cross-border basis in Hong Kong and the US. They will exchange information about regulated entities as well as collaborate in conducting on-site inspections of regulated entities.

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