The following updates are examinable from 7 September 2022




Updates to SFC:
  • The directors of SFC are appointed by the Chief Executive of HKSAR and are:
    • The Chairman
    • The Chief Executive Officer
    • The Deputy Chief Executive Officer
    • Executive and non-executive directors, the majority of whom must be non-executive directors from suitable sectors of community with industry involvement (directors of listed companies, bankers, lawyers and accountants)
  • Products Advisory Committee (PAC)
    • Set up for the purpose of consultation and advice on matters relating to the Handbook
    • Purely advisory – the power to authorise products, offering documents and advertisements is retained by SFC
    • Consists of industry representatives, professionals and academics with market knowledge and expertise
    • Chairperson, 16 members, six SFC reps and a secretary
Updates to MPFA:
  • Management Board of MPFA:
    • Chairman with 4 executive directors and 9 non-executive directors
    • Managing Director oversees day-to-day operations
    • Member protection and services report to the Executive Director; supervision and enforcement divisions report to Chief Operating Officer
Updates to Guidelines on Continuous Professional Training (CPT):
  • A licensed representative or relevant individual must complete 10 CPT hours per calendar year, irrespective of the number or type of regulated activities involved
  • A responsible/executive officer must complete a minimum of 12 CPT hours per calendar year, with the 2 additional hours being related to regulatory compliance
  • Each individual practitioner must complete at least 5 CPT hours per calendar year on topics directly relevant to the regulated activity he/she is involved in
  • No less than 2 CPT hours per calendar year must relate to ethics or compliance
  • Each new individual practitioner in Hong Kong must complete 2 CPT hours on ethics within 12 months as a one-off requirement (not applicable to temporary lcensees)
  • Activities allowed as CPT:
    • Attending courses, workshops, lectures and seminars
    • Distance learning
    • Self-study with submission of assignments to recognized institutions, including online learning courses
    • Industry research
    • Publication of papers
    • Delivery of speeches
  • Activities not allowed as CPT:
    • Reading financial journals, newspapers and other technical publications
    • Normal work
    • Activities which do not involve interaction with other individuals
Update to Internal Control Guidelines:



  • Policies and procedures shall be established to ensure that the intermediary and its staff comply with all applicable laws and regulations and with the intermediary’s own internal policies and procedures. In particular, the intermediary should establish anti-bribery policies and codes of conduct with essential probity requirements for its directors, staff members and agents, and adopt the statutory definition of “advantages” as stated in the Prevention of Bribery Ordinance
Updates to Anti-money laundering guidelines:
  • One of the eight MIC functions is AML/TF and at least one person should be appointed as the MIC responsible for that function
  • The GAML (only applicable to licensed corporations) and the HKMA guidelines do not have the force of law but may be taken into account during court proceedings under the AMLO/SFO
  • As part of AML, licensed corporations should take a risk-based approach, with two quite different risk assessments:
    • An risk assessment regarding adoption of appropriate policies, procedures and controls; and
    • A customer risk assessment varying with each customer or proposed business relationship
  • The institutional risk assessment should be approved by senior management and kept up to date by undertaking a review at least every two years
  • The GAML suggests four main categories of risk factors that should normally be considered:
    • Country risk
    • Customer risk
    • Product/service/transaction risk
    • Delivery/distribution channel risk



No updates to report




Material added regarding Climate-Related Risks (CRR):
  • Fund managers with responsibility for a fund’s overall operation, should ensure that relevant information about a fund should be adequately disclosed to allow investors to make informed decisions
  • Particularly, information should be provided on climate-related risks, including:
  • How climate-related risks are assessed, managed and monitored, including tools and metrics used
  • If climate-related risks are considered relevant but immaterial, details of how risks have been identified and assessed
  • SFC has issued a Circular to licensed corporations – Management and Disclosure of Climate-related Risks by Fund Managers, providing detailed guidance (see section 9 below)


  • SFC has stipulated that fund managers must take into account climate-related risks during their investment and risk management processes
  • Climate-related risks are risks associated with climate change that may affect asset values
  • Climate-related risks can be:
    • Physical risks such as damage to assets or supply chain disruptions; and
    • Transition risks such as the ongoing viability of a company as a result of transitions in society to a low-carbon economy
  • The potential for liability risks should also be factored into the risk assessment process
  • Greenwashing, which can be a problem, refers to the marketing of products or services as being green or sustainable without fully integrating relevant climate-related considerations into such products or services
  • Important objectives of the SFC’s Climate Related Risks (CRR) Circular are:
    • To increase awareness of the impact of carbon emissions and the associated risks
    • To ensure proper handling of climate-related risks, which are a source of financial risk
    • To promote disclosures that are of high-quality and provide more useful information which enable investors to make informed decisions and help combat greenwashing: and
    • To develop appropriate regulatory requirements in a context where methodologies and terminologies around the concepts of green and sustainable investment practices are still evolving
  • SFC has also issued sample industry practices based on inputs from a Climate Change Technical Expert Group:
Circular to Licensed Corporations – Management and Disclosure of Climate-Related Risks by Fund Managers
  • The CRR Circular is made up of four key elements, for which baseline requirements and enhanced standards have been set by the SFC:
    • Governance
    • Investment management
    • Risk management
    • Disclosures
  • All fund managers are expected to comply with the baseline requirements (see below), although the SFC has indicated that risk management governance structure and procedures should be commensurate with each firm’s activities
  • The enhanced standards apply to “Large Fund Managers” which are fund managers with monthly CIS assets under management (AUM) of HK$8 billion or more for any three months in the previous reporting year

Baseline Requirements Applicable to All Fund Managers


  • The Board, or a committee of the Board, should oversee climate-related considerations
  • Management should set goals, develop action plans and determine the appropriate management structure and process for the management of climate-related risks
  • Sufficient human and technical resources should be committed to the management of climate-related risk

Investment Management

  • Relevant and material climate-related risks should be identified for each investment strategy and each fund
  • An assessment should be made of how each risk could impact the performance of underlying investments:

Risk Management

  • Risk management procedures should properly incorporate climate-related risk considerations
  • Involves identification, assessment, management and monitoring of climate-related risks by using appropriate tools and metrics


  • The roles of the board and management, and the means by which they exercise oversight of climate-related risks, should be disclosed
  • The steps taken to incorporate climate-risk related considerations into the investment and risk management processes should be disclosed

Enhanced Standards Applying to Large Fund Managers

Risk Management

  • Large Fund Managers should consider whether scenario analysis is useful to evaluate the resilience of investment strategies to climate-related risks
  • If scenario analysis is to be used, an implementation plan should be developed within a reasonable timeframe
  • If relevant, material and available, carbon emissions associated with underlying investments should be identified


  • Large Fund Managers should describe their engagement policy and how it is implemented, as well as disclose how material climate-related risks are managed in practice
  • Data on carbon emissions associated with underlying investments should be disclosed with details of methodology/assumptions/limitations. Proportion of investments covered by quantitative data should be given

Format and Frequency of Disclosures

  • Climate-related risk disclosures may be made through various channels, including websites, newsletters and reports
  • Disclosures should be proportionate, adequate, be reviewed at least annually and updated when considered appropriate
  • Material changes affecting climate-related risks or disclosures previously made should be brought to the attention of investors as soon as practicable

Transition Period

  • Large Fund Managers will need to comply with the baseline requirements by 20 August 2022 and with the enhanced standards by 20 November 2022
  • Other fund managers will need to comply with the baseline requirements by 20 November 2022



No updates to report


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