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Code of Conduct

FAQ on description of services in client agreements

Q1 : Are intermediaries required to describe in client agreements all the services to be provided to the client?


Intermediaries are expected to include in client agreements descriptions of only those services that are relevant to the “regulated activities” for which they are licensed or registered to engage.  They are not expected to include services in client agreements falling outside the scope of “regulated activities” under the SFO. 

Intermediaries should clearly and accurately describe in client agreements the nature of the account as well as the types of services relating to the relevant regulated activities (“regulated services”) to be provided to the client (e.g., brokerage service, discretionary portfolio management service), the nature of the client relationship (e.g., advisory relationship), and the types of financial products involved (e.g., securities, futures contracts or leveraged foreign exchange contracts).  If intermediaries are to provide different types of regulated services to the client through different types of accounts (e.g., brokerage account, discretionary investment management account), they should set out in specific terms the types of those services to be provided through each particular type of account.  The description in client agreements should be consistent with the nature of actual regulated services to be provided to the client.  For example, if an intermediary offers advisory services to its client, it shall not misdescribe them as otherwise.  

Last update: 22 Jan 2015

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