Hong Kong SFC licensing and compliance hints – March 2023

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Authored by: Rebecca Yip

SFC in-person on-site inspections are back

The Securities and Futures Commission (SFC) commenced 54 on-site inspections on licensed corporations during October to December 2022 according to the latest Quarterly Report (October to December 2022), which was slightly lower than 61 in the same quarter ended 31 December 2021.

For nine months ended 31 December 2022, the SFC found fewer breaches during on-site inspections (974) compared to the same period in 2021 (1056) according to the Quarterly Report. Having said that the SFC found more breaches in areas like failure to comply with the Financial Resources Rules, failure to make filing/notification and breaches of the Code of Conduct compared to the same period in 2021.

Separately, we understand that the SFC has resumed conducting in-person on-site inspections. We can assist licensed companies to prepare in advance of an SFC inspection and provide guidance to senior management during such inspections.

Asset and Wealth Management Activities Survey

The SFC commenced its Asset and Wealth Management Activities Survey 2022 on 17 February 2023 (link). The purpose of this annual exercise is to collect information on the state of the Hong Kong asset and wealth management industry for regulatory and market facilitation purposes.

Licensed companies are recommended to participate in the survey to assist the SFC in better understanding the industry. Licensed companies which had gross operating income derived from asset management, giving advice on funds / portfolios and / or private banking / private wealth management during 2022 should complete the whole survey. For licensed companies that did not engage in any of these activities throughout 2022, they should still complete the General Information section of the survey. The deadline for submitting the survey through WINGS is 21 April 2023.

CPT 2023

The first quarter of 2023 will end shortly. It is time to remind all licensed individuals to start planning their 2023 CPT requirements, especially for those who found it challenging to fulfill the “new” CPT requirements towards the end of 2022. A useful reminder that appropriate internal training can be counted as CPT, provided it meets the SFC’s requirements as set out in the Guidelines on Continuous Professional Training.