SFC concludes consultation on prescribing professional investors

18 May 2018



The Securities and Futures Commission (SFC) today released consultation conclusions on proposed amendments to the Securities and Futures (Professional Investor) Rules (PI Rules) to standardise the rules for prescribing professional investors (Note 1).

The amendments allow portfolios held in joint accounts with non-associates and in investment corporations wholly-owned by an individual to count towards meeting the threshold to qualify as a professional investor (Note 2). The categories of professional investors will be expanded to include corporations which have investment holding as their principal business and are wholly-owned by one or more professional investors, as well as corporations which wholly own another corporation which is a qualified professional investor. In addition, alternative forms of evidence will be allowed to demonstrate qualification as a professional investor (Note 3).

"The changes to the rules for prescribing professional investors are in the best interest of the industry to ensure a level-playing field and consistent application of the regulations," said Ms Julia Leung, the SFC's Deputy Chief Executive Officer and Executive Director of Intermediaries. "They will introduce consistency and flexibility and this will better serve the interests of both firms and their clients."

The proposed amendments, gazetted today, will be submitted to the Legislative Council for negative vetting. Subject to the legislative process, the SFC expects the amended rules to come into effect on 13 July 2018.

End

Notes:

  1. On 1 March 2017, the SFC launched a one-month consultation on proposed amendments to the PI Rules which aim to incorporate modifications previously granted by the SFC under section 134 of the Securities and Futures Ordinance.
  2. "Portfolio" is defined in the PI Rules as a portfolio comprising securities, certificates of deposit issued by banks or money held by custodians for a person. The PI Rules define the term "associate" as the spouse or any child of an individual.
  3. These refer to public filings made under legal or regulatory requirements and certificates issued by custodians. Certificates issued by auditors or certified public accountants will be allowed for all professional investors.


Page last updated : 18 May 2018