New updates relating to virtual asset trading and the Anti-Money Laundering and Counter-terrorist Financing Ordinance (Cap.615)

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Authored by: Simon Deane and Ruby Hui

There have recently been a number of new releases by different organisations and authorities relating to virtual asset trading and the Anti-Money Laundering and Counter-terrorist Financing Ordinance (Chapter 615) (“AMLO”) respectively.

AMLO

On 28 April 2023, the Commissioner of Customs and Exercise (“Commissioner”) released the Disciplinary Action Guideline on Imposition for Pecuniary Penalty indicating the way that the Commissioner proposes to exercise the disciplinary power to impose a pecuniary penalty on a Category B registrant.

The amendments to the AMLO which were published in the Gazette (Ord. No. 15 of 2022) came into effect on 1 June 2023, and each of the following authorities and organisations also released its own guidelines pursuant to the amended AMLO and the Insurance Ordinance (Chapter 41) (where applicable) on 25 May 2023:

1. the Commissioner released the revised Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Category B Registrants Dealing in Precious Metals and Stones) and Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Money Service Operators);

2. Estate Agents Authority released the revised Guidelines on Compliance of Anti-Money Laundering and Counter-Terrorist Financing Requirements for the Estate Agency Sector;

3. The Securities and Futures Commission (“SFC”) released the SFC Disciplinary Fining Guidelines;

4. Hong Kong Institute of Certified Public Accountants released the revised Guidelines on Anti-Money Laundering and Counter-Terrorist Financing for Professional Accountants;

5. The Hong Kong Monetary Authority (“HKMA”) released the revised Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Authorized Institutions) and Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Stored Value Facility Licensees);

6. Insurance Authority released the revised Guideline on Anti-Money Laundering and Counter-Terrorist Financing; and

7. The Law Society of Hong Kong released the revised Guidelines on Anti-Money Laundering and Terrorist Financing (Practice Direction P).

Virtual Asset Trading

On 25 May 2023, the SFC published the following guidelines on virtual asset trading relating to the Securities and Futures Ordinance (Chapter 571) and the AMLO:

• the revised Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Licensed Corporations and SFC-licensed Virtual Asset Service Providers) and Prevention of Money Laundering and Terrorist Financing Guideline issued by the Securities and Futures Commission for Associated Entities of Licensed Corporations and SFC-licensed Virtual Asset Service Providers; and

• Guidelines for Virtual Asset Trading Platform Operators.

On the same day, in addition to the above, the SFC released the paper forms or (where applicable) revised paper forms used for the following purposes:

1. licensing applications and notifications to the SFC under Part V of the SFO and the Securities and Futures (Licensing and Registration) (Information) Rules (Chapter 571S) only when WINGS is not in service (please see here for the relevant paper forms); and

2. analysis of client assets as at the end of the financial year for an associated entity of an intermediary to the SFC required under section 3 of the Securities and Futures (Account and Audit) Rules (Chapter 571P) (please see here for the relevant revised paper forms).

Key Contacts

Simon Deane

Consultant | Banking and Finance

Email or call +852 2825 9209