Securities & Futures Commission of Hong Kong

Unsolicited Calls Exclusion Rules and section 174 of the SFO

Q1:

Is distribution of promotional materials to the general public is prohibited under the requirements?

A:

No. However, intermediaries should be cautious that in the process of distribution, their staff or agents do not enter into any interactive dialogue with the recipient on the contents of the materials unless the recipient has first asked for more information in relation to the materials.

Section reference: (Unsolicited Calls – Exclusion) Rules

Q2:

Are events for the introduction or promotion of products or services (e.g. seminars and talks) that are open to the general public prohibited?

A:

No, these are not prohibited. However, intermediaries should only follow up if an attendee leaves a request in whatever form requesting for information. Leaving his/her name card or contact details alone cannot be taken to amount to an express invitation for the intermediary to call and offer its products or services.

For the avoidance of doubt, intermediaries may of course continue to offer previous attendees the opportunity to attend other events. 

Section reference: (Unsolicited Calls – Exclusion) Rules

Q3:

Can intermediaries offer financial planning to the general public without breaching the prohibition?

A:

Yes, they can. However, intermediaries may not use this opportunity to offer their products or services unless the client specifically requests such products or services.

Section reference: (Unsolicited Calls – Exclusion) Rules

Q4:

I am an intermediary licensed for dealing in securities and futures contracts. Will I breach the prohibition by offering to sell futures contracts to clients who only maintain with me a securities account, or vice versa?

A:

No, given that cross-selling by intermediaries is permissible under section 174 of the SFO where an “existing client” has, within the last 3 years, entered into a client contract or has been given services where the subject matter of the contract or the services constitutes a regulated activity.

However, registered institutions are reminded that they are not permitted to cross-sell securities or futures products to a client for whom they provide services in leveraged foreign exchange trading or securities margin financing, unless such client is also an “existing client” in respect of a regulated activity (other than Type 3 and Type 8) for which they are registered.

Section reference: (Unsolicited Calls – Exclusion) Rules

Q5:

Can intermediaries market investment-linked insurance products or MPF schemes?

A:

Yes, but only if the intermediaries do not enter into any discussion on the underlying securities (other than passing on certain factual information such as the composition of the product, e.g. proportion of equity versus bond and allocation to different geographical markets).

Section reference: (Unsolicited Calls – Exclusion) Rules

4.5190 s