Regulatory Alerts2009-01-09
Added · Updated
HKMA Recommendations on Distribution of Structured Products Connected to Lehman Group Companies
The Hong Kong Monetary Authority mandates registered institutions to implement immediate and near-term safeguards for the distribution of structured products linked to Lehman Group companies. Key requirements include attaching health warnings to derivative products, separating risk assessments from sales processes, and ensuring comprehensive audio recording of customer interactions and sales procedures. Additionally, institutions must enhance documentation for risk mismatches, establish mystery shopper programs, and revise staff remuneration structures to prevent incentives based solely on financial performance.
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