Regulatory Alerts2024-04-18
Added · Updated
Concurrent SFC-HKMA Thematic Review of the Distribution of Non-Exchange Traded Investment Products
The Securities and Futures Commission and the Hong Kong Monetary Authority issued this joint circular to address deficiencies in intermediaries' product due diligence and suitability assessments identified during a concurrent thematic review. The regulators highlighted that many firms overlooked critical risk factors in structured products like accumulators and decumulators, leading to inadequate client disclosures and potential inappropriate recommendations. Intermediaries are required to enhance their internal risk-scoring methodologies, ensure staff are fully trained on complex product features, and strictly adhere to obligations regarding accurate information disclosure and client suitability.
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