External assessment reports for licence applications
Q1 : Why does the SFC require a corporation applying to be licensed as a Platform Operator to submit external assessment reports for its licence application?
To streamline the application process, the SFC requires applicants to engage an external assessor to assess its policies, procedures, systems and controls , and submit the assessor’s reports to the SFC (i) when submitting the licence application (Phase 1 Report) and (ii) after approval-in-principle is granted (Phase 2 Report).
Q2 : What should be contained in the Phase 1 Report and Phase 2 Report?
The Phase 2 Report should be the assessor’s assessment of the implementation and effectiveness of the actual adoption of the planned policies, procedures, systems and controls. The SFC will grant final approval only if it is satisfied with the findings of the Phase 2 Report.
For more details, please refer to the Scope of External Assessment Reports on the SFC’s website.
Q3 : Is there any selection criteria on the external assessor for the external assessment reports?
In relation to the selection and appointment of external assessors:
- the VA trading platform applicant should exercise due skill, care and diligence in the selection and appointment of the external assessor and should consider its expertise, experience and track record in reviewing the areas concerned. The external assessor’s capability statement should be submitted to the SFC together with the external assessment report.
- separate external assessors may be engaged to review different areas of the business, depending on their expertise, experience and track records.
- the external assessor should be independent in the sense that the service provider of a particular system should not also act as the external assessor for the same system.
Last update: 31 May 2023