Daily News Headlines

  • News Headlines – 24 Dec -05 Jan 2021

    [Hong Kong] SFC issues restriction notice to a broker to freeze client accounts linked to suspected market manipulation

    SFC News, 23 Dec 2020

    The SFC has issued a restriction notice to CNI Securities Group Limited (CNI), prohibiting it from dealing with or processing certain assets held in three client accounts, which are related to suspected market manipulation in the shares of a company listed on The Stock Exchange of Hong Kong Limited. The restriction notice prohibits CNI, without the SFC’s prior written consent, from disposing of or dealing with, or assisting, counselling or procuring another person to dispose of or deal with, any assets in any way in the client accounts up to a certain amount.

    Full text: click here

    [Hong Kong] Circular to Intermediaries - Frequently Asked Questions on Compliance with Suitability Obligations and Requirements for Complex Products

    SFC Circulars, 23 Dec 2020

    The industry has recently raised a number of questions about compliance with suitability obligations when providing services to high net worth investors who also exhibit financial expertise. The SFC has updated its FAQs in order to:


    • clarify how to conduct suitability assessments;
    • clarify the obligations of licensed or registered persons to explain product risks to clients with different degrees of financial sophistication; and
    • provide guidance in complying with paragraph 5.5 of the Code of Conduct, particularly on how to perform product due diligence, disclose product information and provide warning statements for the sale of complex products on an unsolicited basis.


    Full text: click here; Appendix: click here

    [Hong Kong] Frequently Asked Questions on Investor Protection Measures

    HKMA Circulars, 23 Dec 2020

    The HKMA would like to provide further guidance regarding provision of investment services using non-face-to-face channels and assessment of customer’s concentration risk, in light of development of the market, enquiries received and recent dialogues with the banking industry. Further, flexibility is given to streamlining of the product disclosure of investment products for non-retail banking customers that have financial sophistication to understand the investment products.

    Full text: click here; Appendix: click here

    [Mainland China] China orders Ant to return to its roots in payments services

    Straits Times, 27 Dec 2020

    Chinese regulators ordered Jack Ma’s online financial titan Ant Group to return to its roots as a provider of payments services, threatening to throttle growth in its most lucrative businesses of consumer loans and wealth management.

    Full text: click here

    [Hong Kong] Consultation conclusions on the Insurance (Group Capital) Rules

    IA News, 28 Dec 2020

    The Insurance Authority (IA) published the consultation conclusions on the draft Insurance (Group Capital) Rules (the Group Capital Rules) in respect of the new supervisory framework for multinational insurance groups (GWS framework), tentatively to be implemented in the first quarter of 2021. The main objective of the proposed Group Capital Rules is to set out the requirements in relation to capital, regulatory reporting and public disclosure that apply to an insurance holding company in relation to its insurance group. The Group Capital Rules will apply to insurance holding companies which are designated by the IA as being subject to the GWS framework.

    Full text: click here; consultation conclusions: click here

    [Hong Kong] Circular to Licensed Corporations - Launch of iAM Smart

    SFC Circulars, 29 Dec 2020

    The Office of the Government Chief Information Officer (OGCIO) launched iAM Smart1 initiative on 29 December 2020. The Securities and Futures Commission (SFC) encourages licensed corporations to actively consider adopting iAM Smart, one of the key infrastructure projects for smart city development which provides all Hong Kong residents with a single digital identity and authentication method to conduct government and commercial transactions online. The SFC would accept iAM Smart for client identity verification and the associated digital signing for onboarding purposes. LCs which wish to explore potential use cases for iAM Smart can do so by participating in the iAM Smart Pilot Sandbox Programme.

    Full text: click here

    [Mainland China] First-ever margin trading and securities lending deals by foreign QFII investors completed in China

    Business Times, 29 Dec 2020

    The first-ever margin trading and securities lending deals by qualified foreign institutional investors (QFII) in China's mainland stock market have been completed, brokerage Guotai Junan Securities said.

    Full text: click here

    [Mainland China] China mulls harsher punishment for securities, futures crimes

    China Daily, 29 Dec 2020

    China has adopted an amendment to its criminal law to intensify crackdowns on securities and futures crimes, aiming to provide a stronger legal guarantee for the country's ongoing capital market reform and promote healthy development of the sector. The criminal acts of fraudulently issuing securities and disclosing information, providing false supporting documents and manipulating the market will attract tougher punishment, according to Amendment XI to the Criminal Law adopted at a Standing Committee session of the National People's Congress. Under the amendment, the maximum sentence for fraudulent securities issuances will be raised to 15 years from five, while the maximum prison term for fraudulent information disclosures will be increased to 10 years, with the cap on fines to be abolished. In addition, Intermediaries such as lawyers and accountants who provide false supporting documents shall be sentenced to imprisonment of up to 10 years.

    Full text: click here

    [Hong Kong] Designation of Domestic Systemically Important Authorized Institutions

    HKMA News, 30 Dec 2020

    The Hong Kong Monetary Authority (HKMA) has completed its annual assessment of the list of Domestic Systemically Important Authorized Institutions (D-SIBs). Based on the assessment results, the list of authorized institutions designated as D-SIBs remains unchanged compared to the list of D-SIBs published by the HKMA on 24 December 2019. The latest list of D-SIBs is shown in the Annex.

    Full text: click here; Annex: click here

    [Hong Kong] Circular to Money Service Operators - New Online Functions of Money Service Operators Licensing System

    C&ED Circular, 30 Dec 2020

    Starting from 30 December 2020, the Money Service Operators Licensing System (“MSOS”) extends the coverage of electronic services. In addition to the existing online functions relating to the Money Service Operator (“MSO”) licence, the MSOS commences the provision of new online functions for MSOs to submit the following forms:

    1. 1.Fit and Proper Person Declaration Form for Individual (Form 3A);
    2. 2.Fit and Proper Person Declaration Form for Corporation (Form 3B);
    3. 3.Notification of Changes in Particulars (From 6);
    4. 4.Notification of Cessation of Operating Money Service (Form 7); and
    5. 5.Supplementary Information Sheet for Licensed Money Services Operators.

    Full text: click here

    [Singapore] Compliance Toolkit for Approvals, Notifications and Other Regulatory Submissions to MAS for Financial Advisers

    MAS Regulation, 30 Dec 2020

    This Compliance Toolkit is to facilitate financial advisers’ compliance with the various MAS approval and reporting requirements and timelines. It provides guidance to financial advisers on (1) Applications requiring approval from MAS; (2) Notifications to be submitted to MAS; and (3) Regulatory submissions to MAS (e.g. financial returns).

    Full text: click here

    [Singapore] Compliance Toolkit for Approvals, Notifications and Other Regulatory Submissions to MAS for Insurance Brokers

    MAS Regulation, 30 Dec 2020

    This Compliance Toolkit is to facilitate insurance brokers’ compliance with the various MAS approval and reporting requirements and timelines. It provides guidance to insurance brokers on (1) Applications requiring approval from MAS; (2) Notifications to be submitted to MAS; and (3) Regulatory submissions to MAS (e.g. financial returns).

    Full text: click here

    [Singapore] Terrorism Financing National Risk Assessment 2020

    MAS Publications, 30 Dec 2020

    The Terrorism Financing National Risk Assessment (TF NRA) seeks to further deepen the understanding by law enforcement agencies, supervisors/regulators and the private sector of Singapore’s key TF threats and vulnerabilities, so that appropriate prevention and mitigation measures may be taken. The TF NRA has found that Singapore continues to be exposed to TF threats posed by terrorist groups both regionally and internationally, in particular the propensity for individuals in Singapore to be radicalised and influenced to carry out TF activities.

    Full text: click here

    [Hong Kong] Consultation conclusion on rules on contractual stays on termination rights in financial contracts for authorized institutions

    HKMA News, 31 Dec 2020

    The HKMA has released the consultation conclusion on the public consultation relating to rules on contractual stays on termination rights in financial contracts for authorized institutions (Stay Rules) proposed to be made as subsidiary legislation pursuant to section 92 of the Financial Institutions (Resolution) Ordinance (Cap. 628). The Stay Rules require authorized institutions incorporated in Hong Kong and certain of their group companies to include an appropriate provision in certain non-Hong Kong law governed financial contracts to the effect that the parties to the contracts agree to be bound by a temporary suspension of termination rights that may be imposed by the Monetary Authority as a resolution authority under section 90 of the FIRO.

    Full text: click here; Consultation conclusion: click here

    [Hong Kong] Coronavirus disease (COVID-19) and Money Laundering and Terrorist Financing (ML/TF) risks – An Update

    HKMA Circulars, 31 Dec 2020

    The HKMA would like to draw the industry’s attention to the most recent update from the Financial Action Task Force (FATF) on COVID-19-related ML/TF risks. The update highlights developments since the last report published in May 2020, details how criminals continue to attempt to exploit the global financial systems, and provides a selection of case studies, some provided by Hong Kong, which illustrate how the risks have evolved as along with the situation. The HKMA has been monitoring the COVID-19 related impact on ML/TF risks and working closely with Authorized Institutions (AIs) and stored value facility (SVF) licensees to cope with the development. The Fraud and Money Laundering Intelligence Taskforce has established an Operation Priority on COVID-19 related deceptions delivering alerts and case-based intelligence.

    Full text: click here

    [Mainland China] China regulator suspends Moody's Chinese JV over Yongcheng default

    Business Times, 31 Dec 2020

    The National Association of Financial Market Institutional Investors (NAFMII) said they had suspended China Chengxin International Credit Rating Co (CCXI), the credit rating business of Moody's Chinese joint venture, for three months, over its role in the default of a state-owned coal miner that stunned the domestic bond market last month. CCXI was investigated after its client, Yongcheng Coal & Electricity Holding Group Co, defaulted on a one billion yuan bond on Nov 10, just weeks after it sold fresh debt, sending shockwaves across China's bond market.

    Full text: click here

    [Hong Kong] SFC bans Yung Lap Hong for life

    SFC Enforcement News, 4 Jan 2021

    The SFC has banned Mr Yung Lap Hong, a former branch manager of China Construction Bank (Asia) Corporation Limited (CCBA), from re-entering the industry for life for misappropriation of $3.6 million from a customer’s bank account. The SFC found that in April 2019, Yung used a cashier’s order application form pre-signed by a customer of CCBA to obtain a cashier’s order for $3.6 million payable to his wife.  After depositing the cashier’s order into his wife’s bank account, the monies were transferred to his wife.  Yung then transferred the monies to himself from his wife’s bank account.

    Full text: click here

    [Mainland China] China makes ratings firm pay for corporate fraud for the first time

    Business Times, 4 Jan 2021

    Hangzhou Intermediate People's Court ruled that Dagong Global Credit Rating, a local ratings firm, should help compensate some creditors for Wuyang Construction Group’s 1.4 billion yuan bond defaults three years ago, a first in the country as Beijing raises pressure on agencies to improve their due diligence. Wuyang Construction defaulted on two onshore bonds totalling nearly 1.4 billion yuan in 2017 and was later alleged by China's securities regulator of falsifying financial documents to win regulatory approval to sell bonds. The Hangzhou court's ruling also sets the precedent for bond underwriters, accounting and law firms to be financially responsible for bondholders' losses, potentially offering a new roadmap for handling such cases in the future.

    Full text: click here