SFC consults on changes to Competency Requirements for Licensed Intermediaries and Individuals

Julia CharltonPartner, Charltons

The Securities and Futures Commission of Hong Kong (SFC) published a Consultation Paper on Proposed Enhancements to the Competency Framework for Intermediaries and Individual Practitioners[1] on 11 December 2020 proposing to amend the entry requirements for licence applicants and the ongoing competency standards for individual practitioners. The proposals will apply to responsible officers and licensed representatives of SFC-licensed corporations and to executive officers and relevant individuals of authorised institutions registered by the Hong Kong Monetary Authority (HKMA). The deadline for responding to the consultation is 10 February 2021.

The SFC notes in the Consultation Paper the substantial changes in Hong Kong’s regulatory landscape and the increase in the number of SFC licensees since its Fit and Proper Guidelines, Guidelines on Competence and Guidelines on Continuous Professional Training were published in March 2003. It also notes that many other local and overseas regulators recently updated their competence standards. The SFC is also seeking to address its concerns about the quality of the work performed by some financial advisers who advise on matters regulated by the Hong Kong Codes on Takeovers and Mergers and Share Buy-backs (Takeovers Code) in recent years by raising the competence requirements for individuals advising on matters or transactions under the Hong Kong Takeovers Code.

The proposals involve amendments to the SFC Guidelines on Competence and the SFC Guidelines on Continuous Professional Training which respectively set out the entry and ongoing competence requirements expected of a person engaging in regulated activities.

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