Circular to issuers of SFC-authorized paper gold schemes

20 Apr 2020



    1. This circular is directed to all issuers (“PGS Issuers”) of SFC-authorized paper gold schemes (the “PGS”).

    2. In view of the recent volatility in local and international markets caused by the COVID-19 outbreak, PGS Issuers are reminded to:

      (i) exercise due skill, care and diligence in the operations of the PGS;

      (ii) closely monitor the dealings by investors under the PGS;

      (iii) ensure that units of PGS are fairly and accurately valued in good faith and in the best interests of investors in accordance with the constitutive and offering documents of the PGS as well as applicable laws and regulations;

      (iv) ensure the continuous provision of material information and services to investors (including pricing and dealings of the units of PGS) in accordance with the constitutive and offering documents of the PGS; and

      (v) keep investors informed in a timely manner and immediately report to the Investment Products Division of the SFC (“IPD/SFC”) any untoward circumstances relating to their PGS (including any decision to suspend subscription and/or redemption) and potential impact on the PGS.

    3. In particular, for any decisions to suspend dealings of the PGS, PGS Issuers are reminded that:

      (i) such decisions should be made in the best interests of investors in accordance with the constitutive and offering documents of the PGS and applicable laws and regulations;

      (ii) they should inform IPD/SFC immediately upon any decision to suspend and they should notify investors1 in a timely manner;

      (iii) they should regularly review any prolonged suspension of dealings and take any necessary steps to resume normal operations as soon as practicable;

      (iv) they should notify IPD/SFC as well as investors immediately upon any decision to uplift suspension/resume dealing; and

      (v) the offering documents of the PGS should contain information necessary for investors to make an informed judgement about the PGS. This includes information on suspension of dealing of units of PGS, for example, the circumstances under which dealings can be suspended and how investors are notified as a result.

    4. The notices in 3(ii) and (iv) above must be made in the language(s) in which the PGS is offered to investors. They do not require SFC’s prior approval and should be filed with the SFC immediately after its issuance.

      General 

    5. PGS Issuers are reminded to give IPD/SFC early alerts of any material issues affecting their PGS. They are strongly encouraged to consult us if in doubt.

Investment Products Division
Securities and Futures Commission

1 The notice to investors should contain, amongst others, (i) legal basis for suspension (by making reference to the provisions in the constitutive documents); (ii) reasons for suspension; (iii) effective date and where appropriate, the duration of suspension; (iv) date of publication of notice; and (v) details of a Hong Kong contact for enquiries.


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Page last updated : 20 Apr 2020