SFC reprimands and fines Mega International Commercial Bank Co., Ltd. $7 million for regulatory breaches over CIS sale

SFC, 7 May 2020

The Securities and Futures Commission (SFC) has reprimanded and fined Mega International Commercial Bank Co., Ltd. (MICBC) $7 million over MICBC’s internal system and control failures in relation to the sale of collective investment schemes (CISs). Following a referral from the Hong Kong Monetary Authority (HKMA), the SFC conducted an investigation which found that, in the course of selling CISs to clients between August 2014 and July 2015, MICBC had failed to implement adequate and effective systems and controls.

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Circular to licensed corporations Margin requirements for non-centrally cleared OTC derivative transactions 

SFC, 7 May 2020

This circular informs licensed corporations (LCs) that the Securities and Futures Commission (SFC) will defer the introduction of initial margin (IM) requirements for non-centrally cleared over-the-counter (OTC) derivative transactions1 by one year to provide operational relief amidst the COVID-19 situation. 

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Circular to Licensed Corporations which are Participants of The Stock Exchange of Hong Kong Limited or Hong Kong Futures Exchange Limited - Licence Holders Insurance Scheme for Exchange Participants 

SFC, 7 May 2020

This circular sets out the arrangements of the licence holders insurance scheme applicable to the following categories of licensed corporations for the scheme year from 1 April 2020 to 31 March 2021 (both dates inclusive):-

Category 1:   Participants of The Stock Exchange of Hong Kong Limited and licensed for Type 1 regulated activity (i.e. dealing in securities);

Category 2:   Participants of Hong Kong Futures Exchange Limited and licensed for Type 2 regulated activity (i.e. dealing in futures contracts). 

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Coronavirus disease (COVID-19) and Anti-Money Laundering and CounterFinancing of Terrorism (AML/CFT) measures

HKMA, 7 May 2020

HKMA would like to share observations gathered through our recent engagement with Authorized Institutions (AIs) and set out the type of support, guidance and assistance in relation to money laundering and terrorist financing (ML/TF) risk management that the HKMA is providing to support swift and effective implementation of measures in response to COVID-19. The HKMA acknowledges that COVID-19 poses unprecedented challenges, which impact the normal operations of the AML/CFT systems and customer due diligence processes of AIs. 

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The Financial Services Regulatory Initiatives Forum launches Grid to help financial firms’ planning

UK FCA, 7 May 2020

The introduction of the Grid – announced by Chancellor of the Exchequer Rishi Sunak in March’s Budget – has been brought forward by the Forum to help firms stretched by the impact of coronavirus (Covid-19). The Grid lays out the planned timetable for major initiatives - including the transition from LIBOR and the introduction of financial services legislation to prepare for the end of the EU withdrawal transition period.

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Beijing allows asset investment companies to conduct asset management business

Business Times, 6 May 2020

China has allowed asset investment companies (AIC) to conduct asset management business to invest in debt-to-equity assets as regulators seek to expand equity financing and reduce leverage in the economy.

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