News Headlines

Hong Kong accounting group fights for changes by government over audit reforms
SCMP, 1 Jan 2017
The government is now drafting a bill to be submitted to the Legislative Council in October 2016 to seek changes by shifting more regulatory power from the HKICPA to the Financial Reporting Council (FRC).
The government-appointed FRC, which was first established in 2007, has already taken over power from the HKICPA to investigate audit failures.
The new reform measure will also allow FRC to handle practice reviews and to discipline accountants, is also aimed at matching the international trend of letting an independent non-accountancy body handle the regulation of auditors.
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Hackers hit Hong Kong share trading accounts for over HK$126 million in first three quarters of 2016
SCMP, 3 Jan 2017, Page C1
Police uncovered more than HK$126 million in unauthorised share trading in the first three quarters of 2016 – double the 2015 full-year total – with hackers employing new tactics designed to distract victims while taking control of their accounts.
The number of cases relating to unlawful trading in the city also surged year-on-year from 24 ­during the first nine months of 2015, to 61 last year.
Although some victims may not have incurred financial losses, police said cyber criminals had used “pump and dump” tactics while controlling their victims’ trading accounts so as to profit from market rigging.
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Market Misconduct Tribunal finds Greencool’s former chairman and senior executives culpable of market misconduct
SFC Press Release, 30 Dec 2016
The Market Misconduct Tribunal (MMT) has found that the former chairman and chief executive officer of Greencool Technology Holdings Limited (Greencool), Mr Gu Chujun, and four former senior executives (including its former financial controller) disclosed false or misleading information inducing transactions and so engaged in market misconduct under the Securities and Futures Ordinance (SFO) following proceedings brought by the Securities and Futures Commission (SFC).
The four ex-Greencool senior executives are former directors, Mr Zhang Xihan, Mr Hu Xiaohui, and Mr Xu Wanping, and former financial controller, Mr Henry Mok Wing Kai.  Mok was also a qualified accountant appointed under the GEM Listing Rules and the company secretary of Greencool.
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Foreign fund managers struggle for China foothold
Financial Times, 3 Jan 2017
Foreign asset managers are putting on a brave face as Chinese regulators throw them crumbs in the form of incremental market opening, even as a clampdown on capital outflow dims their prospects.
The chief executive of Australian fund manager AMP Capital, Adam Tindall, says his company’s two China joint ventures have achieved profitability ahead of schedule and are contributing significantly to the group.
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Revised disclosure rules and amendment notice under Banking Ordinance gazette
HKSAR Press Release, 30 Dec 2016
The Banking (Disclosure) (Amendment) Rules 2016 and the Banking (Specification of Class of Exempted Charges) (Amendment) Notice 2016 (the Amendment Notice) were gazetted today (December 30) to implement, or facilitate the implementation of, recent international standards for banking regulation in Hong Kong.
The Rules seek to enhance the regulatory disclosure made by authorised institutions in terms of its comprehensiveness, user-relevance and comparability (both between institutions and across jurisdictions), and require disclosure of certain key regulatory metrics on a quarterly basis.
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HKEX Announces Launch Date for VCM in Derivatives Market
HKEx Press Release, 28 Dec 2016
Hong Kong Exchanges and Clearing Limited (HKEX) announced it will implement the Volatility Control Mechanism (VCM) in its derivatives market on 16 January 2017.
The rollout was deferred on 13 November 2016 when a technical issue was identified during the final preparation.  All necessary analysis and follow-up to resolve the technical issue have been completed.
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News Headlines

Hong Kong’s Future Fund likely to have fallen short of investment target
SCMP, 4 Jan 017, Page A3
A major fund set up a year ago to generate higher investment returns for government fiscal reserves might not have performed as well as hoped in its first 12 months due to lower-than-expected yields and low interest rates, Hong Kong’s top financial official has warned.
Acting Financial Secretary Chan Ka-keung did not provide figures on Tuesday as he gave lawmakers a heads-up on the performance of the “Future Fund”, which is designed to help cushion any deficits to come.
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Hedge funds embrace machine learning, but humans are still in charge
SCMP, 4 Jan 2017, Page B5
Machine learning has become the topic de jour for hedge funds, but while Tim Wong, chairman of Man AHL and Man Group Asia, says they have had some success using such techniques, he doesn’t expect to put his feet up and leave all the decision making to machines just yet. What’s more, he warns that there are dangers that come from leaving humans totally out of the picture.
When it comes to hedge funds, the idea is that with a vast quantity of historic data available, algorithms are better able than humans to find patterns of behaviour in markets that offer investing opportunities.
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SFC reprimands and fines MIS Services Limited (formerly known as Standard Chartered Investment Services Limited) $3 million for regulatory breaches
SFC Press Release, 3 Jan 2017
The Securities and Futures Commission (SFC) has reprimanded and fined MIS Services Limited (formerly known as Standard Chartered Investment Services Limited) (SCIS) $3 million for its failure to comply with regulatory requirements under the SFC Code on MPF Products (MPF Code) and Fund Manager Code of Conduct.
An SFC investigation found that SCIS failed to ensure there were at least two key personnel who met the minimum investment experience of five years in managing retirement funds or public funds as required by the MPF Code for a period of over nine years from October 2000 to July 2015.
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News Headlines

Advisory body calls for tax rule changes to attract financial firms from UK to Hong Kong
SCMP, 5 Jan 2017, Page B3
Hong Kong should change the tax laws to attract international financial firms to relocate their booking business to the city, according to a research paper published by the Financial Services Development Council.
Florence Yip, convener of the new business committee at the FSDC, a government advisory body, said the reforms should be considered given the changing political environment in Europe.
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Falcon Bank’s ex-Singapore branch manager slapped with 16 1MDB-related charges
The Straits Times, 5 Jan 2017
Singapore authorities have charged Falcon Private Bank’s former Singapore branch manager Jens Sturzenegger with 16 offences relating to Singapore’s probe into Malaysian state fund, 1Malaysia Development Bhd (1MDB).
Sturzenegger, 42, is expected to plead guilty on Jan 11, it was disclosed in a Singapore court on Thursday (Jan 5). He was released on bail of S$80,000.
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Phillip Securities scraps sales fees for unit trusts traded online
The Straits Times, 5 Jan 2017
Phillip Securities executive director Lisa Lee told The Straits Times that having no charges for unit trust trades on Poems is part of its strategy to allow customers to consolidate their assets with the platform.
Brokerage Phillip Securities has stepped up competition in the industry by removing sales charges and switching fees for unit trusts traded online.
The move will mean these fees no longer eat into the returns of retail investors.
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Fidelity enters China private funds industry, readies products
Asian Investors, 4 January 2017
Fidelity has become the first foreign asset manager to enter China’s $1 trillion private fund industry through a wholly-owned firm in Shanghai, and is working on its first strategies and identifying product trends.
Meanwhile, more firms are expected to get the green light from the regulator in the coming weeks to compete with peers in the mainland onshore private fund industry for the first time.
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News Headlines

SFC bans Cheung Kwan Po for six months
SFC Press Release, 5 Jan 2017
The Securities and Futures Commission (SFC) has banned Mr Cheung Kwan Po, a former employee of Citibank (Hong Kong) Limited (Citibank), from re-entering the industry for six months from 5 January 2017 to 4 July 2017.
The SFC found that in August 2015, Cheung, when processing a client’s bond application, photocopied the client’s signature from her account opening documents and pasted the signature on her risk assessment form, and attempted to use the form to deceive Citibank into accepting the signature as genuine.
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Former Falcon Manager in Court on 1MDB Charges
Regulation Asia, 6 Jan 2017
The former manager of Swiss private bank Falcon’s Singapore office has become the first foreigner to face trial for alleged offences related to the 1MDB scandal.
Jens Sturzenegger faces 16 counts including involvement in Falcon failing to comply with anti-money laundering regulations related to USD1.27 billion in two accounts.
He will plead guilty to some of the charges, The Straits Times reported.
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