FUTURE DEVELOPMENT
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FUTURE DEVELOPMENT
5) Money Lending
The Money Lenders Ordinance (“MLO”) advocated by the Consumer Council has been enacted for 40 years with no major reform. In order to protect consumers and to ensure that money lenders practice responsible lending, the Council suggests amending existing legislation and code of conduct and establish a Sector Specific Regulator to oversee the money lending industry.
2) Depositaries
The SFC has issued Consultation Paper on the Proposed Regulatory Regime for Depositaries of SFC-authorized Collective Investment Schemes. The SFC proposes to introduce a new regulated activity under the Securities and Futures Ordinance (SFO) – Type 13 regulated activity which will be constantly overseen by the SFC or the Hong Kong Monetary Authority (27 September 2019).
4) Licensed Insurance Intermediaries
On 23 September 2019, the Insurance Authority (IA) will take over from the three Self-Regulatory Organizations to regulate insurance intermediaries in Hong Kong. According to the Press Release from the Government of HKSAR, “IA will be responsible for all aspects of the regulation of insurance intermediaries in Hong Kong, including granting licences, conducting inspections and investigations, and imposing disciplinary sanctions where applicable.” The Consultation Paper for the Code of Conduct issued by the Authority in March, set out 8 General Principles and their standards and practices for Licensed Insurance Agents and Brokers, include: Honesty and Integrity, Acting Fairly and in the Client’s Best Interests, Exercising Care, Skill and Diligence, Competence to Advise, Disclosure of Information, Suitability of Advice, Conflicts of Interest and Client Assets.
1) OTC Derivative Products
The Securities and Futures Commission (SFC) has issued the Consultation Paper and will regulate intermediaries who serve as dealers, advisers and clearing agents in the OTC derivatives market in connection with Type 11 (Dealing in OTC derivative products or advising on OTC derivative products) and Type 12 (Providing client clearing services for OTC derivative transactions) regulated activities (RA).
3) Virtual Asset
Following the development of the market and technology, the SFC issued an announcement in October 2019 that terms and conditions will be imposed on licensed corporations which manage or plan to manage portfolios in virtual assets.
Applicable to:
A. Fund Distributor – Type 1 (Dealing in Securities)
B. Cryptocurrency Exchange – Type 7 (Providing Automated Trading Services)
C. Fund Management – Type 9 (Asset Management)
With recent market development, there are more diversified products, increasing number of participants and more rapid cash flow movement. Regulatory authorities implement stricter regulations on different industries in order to strengthen risks management and protect public interest.
6) Money Service Operator (MSO)
The Customs and Excise Department has implemented new licensing requirements to strengthen the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (“AMLO”). The scope of new requirements includes: an MSO licensee must operate a money service; an MSO must lodge a periodic return to the Commissioner of Customs and Excise (“CCE”); an MSO licensee without a particular premises needs to submit a new application. The CCE may exercise the powers under the AMLO to revoke or suspend the concerned licence.