SFC licensing and compliance hints

Is the SFC more flexible under the new AML Guideline about who can verify ID documents?

Yes, licensed corporations may now accept a wider group of professional persons as certifiers. They still have to exercise caution before accepting certified copy documents and always take additional measures if they have any doubt about the authenticity of the certified copies to mitigate the risk of money laundering. The list of appropriate certifiers in the SFC Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Licensed Corporations) is not exhaustive but corporations should bear in mind that they remain ultimately liable for a failure to carry out the prescribed customer due diligence measures. It would be prudent therefore to set out what other types of ‘professional persons’ are acceptable as certifiers, in the AML policies/procedures.

If a manager of a discretionary account does not receive any benefits from issuers of funds in which the manager invests client money, does this need to be specifically disclosed?

No, the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission does not require such “negative” disclosure, i.e. it is not necessary to tell an investor that the manager will not receive any benefits (whether monetary or non-monetary, direct or indirect) from product issuers in connection with managing the client assets. However, firms that decide not to take retrocessions from product issuers, may wish to use this as a positive point because this demonstrates the managers’ independence and objectivity in making investment decisions.