Regulatory Alerts2025-02-26 | 84059Authorities Propose Comprehensive Measures to Prevent Mis-selling of Highly Complex Investment Products
The Financial Services Commission and the Financial Supervisory Service introduced measures to prevent the mis-selling of highly complex financial investment products following significant investor losses from Hong Kong index-linked ELS products. The regulations mandate that ELS sales be restricted to qualified branches with physically separated counters and certified personnel, while requiring clear visual distinctions for other complex products at regular branches. Additionally, financial institutions must prioritize consumer protection by revising internal controls, strictly applying suitability tests, and redesigning performance metrics to discourage excessive sales solicitation.
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