What should be your action items for 2016?
This is our list of hot compliance action items for Hong Kong asset managers and distributors:
Who doesn’t use WhatsApp?
Many people nowadays “talk” to each other via WhatsApp or some form of instant messaging rather than talking face to face or on the phone. On 23 December 2015, the SFC suspended a licensed person for three months because he received and discussed a client’s order instructions using WhatsApp Messenger on a mobile phone. This breached his company’s internal policies because he conducted business activities using electronic communications that were not supported by the company’s IT department. The licensed company therefore could not monitor the licensed person’s activities to ensure that he was carrying out his activities in compliance with his regulatory obligations.
Compliance manuals usually prohibit the use of mobile phones for client order instructions. However, it is worth reminding staff that such a provision extends to all kinds of electronic communications / applications on mobile phones (even on a device provided by the company) that are not supported by the company. It is also worth amending the compliance manual when new technology is introduced. As we can do so much with our mobile phones these days, if staff conduct business activities using applications that are not supported by the company, the licensed company could face the risk of leaking client information or cyber hacking, as well as not being able to monitor staff activities and retain the records adequately.