Guidelines for Sponsors and Compliance Advisers

5 Sep 2006



The SFC is pleased to update the market and the public on the implementation progress of new sponsors regulatory regime that is aimed to increase protection for investors. In order to assist the industry to prepare for the new regime set out under the Guidelines for Sponsors and Compliance Advisers (Sponsor Guidelines), the SFC has published the following documents.

Sponsor Guidelines

Further to the Consultation Conclusions on the Regulation of Sponsors and Compliance Advisers released in April 2006, the SFC published the Sponsor Guidelines in the 1 September 2006 edition of the Government Gazette under Section 399 of the Securities and Futures Ordinance (Note 1). The Sponsor Guidelines, which is part of the Fit and Proper Guidelines, will become effective on 1 January 2007 (Effective Date).

Submission forms for intermediaries intending to act as sponsors (Note 2)

The SFC has published on its website the submission forms for existing intermediaries holding or new corporations seeking Type 6 Regulated Activity (RA 6) licences and which intend to act as sponsors and/or compliance advisers after the Effective Date. Intermediaries should submit these forms as soon as practicable for the SFC’s assessment. The submission forms were also published in the Government Gazette on 1 September 2006.

FAQs

The SFC has published on its website a set of frequently asked questions to clarify and elaborate certain issues in relation to the Sponsor Guidelines.

Circulars to remind intermediaries of the implementation of the Sponsor Guidelines and Financial Resources Rules (FRRs) implications

The SFC has issued two circulars to existing intermediaries holding RA 6 licences to remind them of the forthcoming implementation of the Sponsor Guidelines.

The first circular contains information regarding the implementation of the Sponsor Guidelines and what intermediaries need to do in view of the new regime. The SFC also requests intermediaries currently holding RA 6 licences to indicate whether they intend to act as sponsors and/or compliance advisers on or after the Effective Date. Existing intermediaries holding RA 6 licences that do not intend to act as sponsors or compliance advisers should indicate their intentions to the SFC by completing and returning the reply slip attached to the circular on or before 6 October 2006.

The second circular relates to the new minimum paid-up share capital requirement for licensed corporations acting as sponsors under the Securities and Futures (Financial Resources) (Amendment) Rules 2006. In the circular, the SFC sets out the key items affecting licensed corporations licensed for Type 6 regulated activity as a result of the changes in the FRRs (Note 3). Both circulars can also be found on the SFC website.

The SFC will continue to closely communicate with the industry regarding the new regime for sponsors and compliance advisers. Intermediaries should not assume they would automatically meet the eligibility criteria under the Sponsor Guidelines. For further information regarding the eligibility criteria for sponsors, please refer to the Sponsor Guidelines, available as part of the Fit and Proper Guidelines, on the SFC website.

Ends

Notes:

1. On 10 April 2006, the SFC released the Consultation Conclusions to the Consultation Paper on the Regulation of Sponsors and Compliance Advisers, which introduced the Sponsor Guidelines, outlining the specific eligibility and ongoing requirements for corporate finance advisory firms wishing to act as sponsors and compliance advisers.

2. Intermediaries include licensed corporations or registered institutions under the Securities and Futures Ordinance.

3. The Securities and Futures (Financial Resources) (Amendment) Rules 2006 provisions relating to the minimum paid-up share capital requirement for licensed corporations acting as sponsors will come into effect on 1 August 2007.

4. The Sponsor Guidelines, sponsors submission forms, FAQs and the two circulars can be downloaded from the SFC website (http://www.sfc.hk) under “Licensing Related Matters” of the Intermediaries, Licensing and Investment Products section.




Page last updated : 1 Aug 2012