Hong Kong: SFC concludes consultation on code amendments for professional investors and launches further consultation regarding client agreement requirements

The Securities and Futures Commission (SFC) has concluded its consultation on proposals to enhance the professional investor regime in Hong Kong.
 
Commencing on 25 March 2016, the 'Code of Conduct for Persons Licensed by or Registered with the SFC' (Code) will be amended so that for:

• Individual professional investors – intermediaries will need to comply with all Code requirements (with the exception of specified requirements which are more administrative in nature) when dealing with such individuals, without exception;
• Corporate professional investors (including investment vehicles wholly owned by individual professional investors and family trusts) – a principles-based knowledge and experience assessment, rather than the existing bright-line tests, will need to be conducted on such investors before certain Code requirements can be waived.

The SFC will conduct a further consultation on a revised proposal relating to client agreement requirements.  In response to comments received during its earlier consultation, the SFC has proposed the requirement that a specific clause relating to the suitability of solicitations and recommendations to clients (rather than the suitability requirement under the Code) be incorporated into all client agreements.

Click here for our Hong Kong team's more detailed briefing.