Hong Kong SFC’s New Regime on Unlisted Structured Investment Products


Hong Kong’s Securities and Futures Commission (the “SFC”) has published rule changes on unlisted structured investment products. This follows a three month public consultation triggered by the global financial crisis, and in particular by the collapse of Lehman Brothers in 2008. The Hong Kong Monetary Authority (“HKMA”) has also conducted a study and introduced rule changes for the banking institutions regulated by it.

The SFC has published its Consultation Conclusions on Proposals to Enhance Protection for the Investing Public and the final form of its Handbook for Unit Trusts and Mutual Funds, Investment-Linked Assurance Schemes and Unlisted Structured Investment Products. In addition, the HKMA has issued its own circular on Implementation of Pre-investment Cooling-off Period for Retail Customers.

The implementation of the new regimes will include a "mystery shopper" scheme, under which the SFC and HKMA will deploy senior citizens and pregnant women to act as "investors" to monitor compliance with the new rules.

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