SFC outlines regulation of collective investment schemes

27 Aug 2013



In view of recent enquiries concerning the regulation of collective investment schemes (CIS), the Securities and Futures Commission (SFC) today outlines the relevant provisions in the Securities and Futures Ordinance (SFO) governing the offer and promotion of CIS, and reminds those intending to market a CIS that breaching the provisions may constitute a criminal offence.

Under the SFO (Note 1), generally a CIS has four relevant elements:

A CIS may cover any property, including real estate, whether located in Hong Kong or overseas.

It is an offence under the SFO to issue any marketing material which contains an offer to the Hong Kong public to acquire an interest or participate in a CIS unless it has been authorized by the SFC or an exemption applies (Note 2). 

Promoting a CIS may, in addition, constitute a business in a regulated activity which requires a licence from the SFC, failing which may lead to an offence under the SFO (Note 3).

Any person who wishes to offer or promote any investment arrangement to the Hong Kong public should be aware of the restrictions under the SFO, and seek professional advice if in doubt to ensure compliance with the law.

Investors in doubt about the nature and regulatory status of any investment arrangement are also advised to seek professional advice prior to making an investment. 

End

Notes:

  1. Schedule 1 to the SFO
  2. Section 103 of the SFO
  3. Section 114 of the SFO


Page last updated : 12 Nov 2013