Regulatory Alerts2018-10-18
Added · Updated
Investment horizon and suitability assessment
The Hong Kong Monetary Authority issued this circular to clarify how authorized institutions must incorporate a customer's investment horizon into suitability assessments. Regulators require a holistic approach that matches product risks with personal circumstances, explicitly rejecting rigid mechanical matching of investment horizons to product tenors. Institutions must also evaluate liquidity needs, portfolio composition, and product-specific factors such as termination conditions and transaction costs.
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