SFC highlights concerns noted in licensing applications

16 May 2018



The Securities and Futures Commission (SFC) today published the latest issue of its SFC Compliance Bulletin: Intermediaries to highlight its concerns when it considers licensing applications and provide an update on the implementation of the Manager-In-Charge (MIC) regime (Note 1).

Case studies illustrate the SFC’s regulatory focus and areas of concern which could result in the refusal of licensing applications and even criminal prosecution. These include failure to meet the SFC’s fitness and properness requirements or to provide complete, true and accurate information to the SFC (Note 2).

The bulletin also provides examples of steps which licensed corporations have taken to strengthen corporate governance and senior management accountability following the introduction of the MIC regime, and notes that the SFC will soon conduct a thematic review of the structure and effectiveness of the management of licensed corporations, including board governance and the responsibilities of MICs.

"With the number of SFC licensees reaching record highs and the industry landscape evolving rapidly, we are reviewing our process to ensure that our gatekeeping function continues to be carried out in a fair, efficient and transparent manner", said Ms Julia Leung, the SFC's Deputy Chief Executive Officer and Executive Director of Intermediaries. "Licensees have to remain fit and proper and in this connection, we are pleased to note that licensed corporations have strengthened their senior management accountability which in turn is driving proper behaviour."

Major trends in the SFC’s licensing statistics are also noted in the bulletin along with an overview of how greater integration between the Mainland and Hong Kong financial markets affected the population of SFC licensees after the November 2014 launch of Shanghai-Hong Kong Stock Connect.

SFC Compliance Bulletin: Intermediaries is a regular publication which provides guidance on the SFC’s regulatory and supervisory priorities. It is available on the SFC website where the public can subscribe to receive future issues electronically.

 

 

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Notes:

  1. The MIC regime, introduced in December 2016 and fully implemented on 16 October 2017, makes it easier for the SFC to keep track of information about a firm’s senior management regardless of whether they are licensed persons.
  2. Under section 383 of the Securities and Futures Ordinance, providing false or misleading information to the SFC may have criminal consequences.


Page last updated : 16 May 2018