Regulatory Alerts2024-02-23
Added · Updated
Guidance on Adoption of Portfolio-based Approach to Suitability Assessment
The Hong Kong Monetary Authority has updated and consolidated its guidance on the portfolio-based approach to suitability assessment to address industry inquiries and facilitate adoption by registered institutions. This approach allows institutions to conduct front-loaded suitability assessments via investment agreements, thereby reducing transaction-level mismatches and eliminating the need to record rationale for each individual recommendation. The circular clarifies considerations for risk tolerance and portfolio calculation while explicitly stating that no new supervisory requirements are imposed.
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