New Proposals to Regulate Mis-Selling of Investment Funds & Structured Products in Hong Kong: Right or Wrong?

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New Proposals to Regulate Mis-Selling of Investment Funds & Structured Products in Hong Kong: Right or Wrong?

The recent global financial crisis has resulted in an

upswing in regulatory action throughout world markets. In Hong

Kong, the Securities and Futures Commission

("SFC") has proposed a slew of

new requirements, some of which have already been implemented

retroactively and without industry consultation. In this article we

examine these ongoing developments in SFC policy and their

effectiveness in reaching a fair balance between investor

protection and costs to the investor and the financial

industry.

The past few months have seen major developments in the approach

taken by the Securities and Futures Commission

("SFC") in regulating the sale of

investment products, including mutual funds, unit trusts and

structured products. The developments continue to crescendo:

On October 3, 2008, the SFC issued a circular

("Retail Products Circular") to issuers

of retail investment products reminding them of various existing

regulatory du...

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