Regulatory Alerts2018-10-30
Added · Updated
Requirements Applicable to Online and Offline Distribution of Non-SFO-Regulated Structured Investment Products Annex 2
The Securities and Futures Commission issued this appendix to establish suitability requirements for the online and offline distribution of non-SFO-regulated structured investment products. It distinguishes between standardized non-leveraged structured deposits and complex products, applying different compliance obligations based on whether solicitation or recommendation is involved. The document outlines specific criteria regarding investment experience, principal protection, and concentration thresholds to determine if investors meet the necessary suitability standards.
Appendix Online and Offline Distribution and Advisory Activities for Non-SFO-regulated Structured Investment Products 1 It refers to customers who have executed five or more transactions in the product of the subject transaction within the past three years. 2 It means investors will receive at least 100% of the principal amount if the investors hold the investment until maturity and there is no issuer default. 3 Meaning investment in a specific product on a cumulative basis is within a reasonable threshold as determined by the AI. No Yes Yes No Yes No Comply with 5.1A and 5.3 of SFC’s Code of Conduct Suitability Requirement Suitability Requirement Low concentration? 3 100% Principal-protected? 2 Have sufficient investment experience? 1 Without solicitation or recommendation With solicitation or recommendation Non-SFO-regulated structured investment products Standardised Non-SFO-regulated Structured Deposits
- non-leveraged currency-linked deposits of a major currency pair
- non-leveraged interest rate-linked deposits Complex products
- non-SFO-regulated structured investment products(other than Standardised Non-SFO-regulated Structured Deposits)
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