Regulatory Alerts2022-10-21
Added · Updated
Guidance on Enhanced Investor Protection Measures on Sale and Distribution of Debt Instruments with Loss-absorption Features and Related Products
The Securities and Futures Commission mandates that registered institutions restrict the sale and distribution of loss-absorption products exclusively to professional investors. Institutions must assign appropriate risk ratings, conduct rigorous suitability assessments, and provide comprehensive disclosures regarding the complex nature and potential for substantial losses associated with these instruments. Exemptions from specific suitability and disclosure requirements are granted for transactions involving institutional or qualifying corporate professional investors.
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