Regulatory Alerts2021-10-29
Added · Updated
SFC Thematic Review Findings on Spread Charges and Practices of Licensed Corporations
The Securities and Futures Commission issued findings from a thematic review of licensed corporations regarding their handling of spread charges and distribution of non-exchange-traded investment products. The regulator identified significant deficiencies in internal controls, such as failing to pass on price improvement benefits to clients, and inadequate disclosures regarding trading capacity, affiliate independence, and specific monetary benefits. The document highlights these non-compliances while providing examples of good practices, including robust staff training, independent monitoring, and transaction-specific disclosure of fees and conflicts of interest.
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