News & Insights

Hong Kong SFC licensing and compliance hints – November 2021

Authored by: Connie Chan

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New financial return form to be used soon

The new financial return form will become effective on 1 January 2022 so licensed firms need to start collecting the newly required data if they have not done so yet. The new financial return requires additional pieces of information including breakdown of proprietary investments by product types, analysis of clients by geographical location and type, as well as AUM analysis by investment strategy and account type. Licensed firms will then need to submit the financial returns via the WINGS platform. A marked-up version of the new financial return form against the current one is available at this link.

Are you familiar with the revised competency regime?

The enhanced entry requirements for licence applicants and the ongoing competency standards for intermediaries and individual licensees will also come into effect on 1 January 2022. Licensed firms will need to assess the competence of individuals applying to be licensed with the SFC based on the new standards. In terms of CPT requirements, a minimum of 10 CPT hours and 12 CPT hours will be required for licensed representatives and Responsible Officers respectively. Ethics and compliance is also brought to the forefront with licensed individuals having to complete no less than two CPT hours on such topics per year. For a summary of the revised competency regime, please see our newsletter articles of 25 January 2021 and 24 June 2021.

The SFC issued new FAQs on reporting obligations under National Security Law

The revised AML FAQs issued by the SFC on 22 October 2021 included the reporting of suspicious transaction reports under the National Security Law (NSL), as well as what is meant by “offence related property” under the NSL (see Q20, Q21 and Q22). Licensed firms need to disclose property held by any client whom they become aware has been arrested or charged for an offence endangering national security or when they have knowledge or suspicion that a property is “offence related property” (as defined under the NSL) to the Joint Financial Intelligence Unit “as soon as reasonably practicable”, the FAQs say. The reporting framework under the NSL is similar to the framework under the Organized and Serious Crimes Ordinance.

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