Dechert LLP (JD Supra Hong Kong)

The Hong Kong Government released the conclusions of its public consultation on a proposed licensing regime for virtual asset services providers ("VASPs") on 21 May 2021 (the "Consultation Conclusions"). Having received broad support for its proposals, the Government will now proceed to prepare draft legislation without any significant changes to the consultation proposals and aim to introduce a...

Hong Kong Exchanges and Clearing Limited (the “HKEx”) on 27 November 2020 issued a consultation paper outlining its proposal to increase the profit requirement for listing of shares on the Main Board of HKEx (the “Proposed Profit Requirement”).

On 30 June 2020, the Hong Kong Inland Revenue Department (IRD) published Departmental Interpretation and Practice Note No. 61 (DIPN 61) on the Profits Tax Exemption for Funds. DIPN 61 clarifies the IRD’s interpretation and application of the profits tax exemption for funds that became effective on 1 April 20191 (Unified Funds Exemption). Prior to the introduction of the Unified Funds Exemption,...

The Hong Kong government on 20 March 2020 published the Limited Partnership Fund Bill ("Bill") which provides for a new limited partnership regime for private funds ("LPF") in Hong Kong.1 As we see a greater number of fund managers looking to align their business activities with their fund's domicile, achieving this by moving their fund structures from an offshore to an onshore jurisdiction (parti

The Hong Kong Securities and Futures Commission (SFC) issued a circular (Circular) on January 7, 2020, which clarifies that private equity firms conducting, or holding themselves out as conducting, regulated activities in Hong Kong would be required to be licensed by the SFC under the Securities and Futures Ordinance (SFO). This is a significant development for the private equity industry in Hong

The Hong Kong Securities and Futures Commission (SFC) issued a circular (Circular) on January 7, 2020, which clarifies that private equity firms conducting, or holding themselves out as conducting, regulated activities in Hong Kong would be required to be licensed by the SFC under the Securities and Futures Ordinance (SFO). This is a significant development for the private equity industry in Hong

The Hong Kong Financial Secretary announced in his 2019-20 Budget speech that the government was seeking to establish a limited partnership regime for funds (LPF), in order to facilitate industry development while maintaining market integrity and investor protection. This development is timely and could (with some caveats described below) prove to be transformational for private equity firms...

In light of an increasing demand for virtual asset investment products, the Hong Kong Securities and Futures Commission (SFC) has been taking steps to clarify the legal and regulatory requirements for this market. In this regard, on October 4, 2019 the SFC issued “Proforma Terms and Conditions for Licensed Corporations which Manage Portfolios that Invest in Virtual Assets (T&Cs). The T&Cs set...

The Hong Kong Securities and Futures Commission (SFC) has announced that it reprimanded and fined a Hong Kong private equity firm, SEAVI Advent Ocean Private Equity Limited (PE Firm), for employing or appointing unlicensed persons to perform regulated functions for its asset management business. This disciplinary action, following the SFC's recent confirmation to exclude private offshore...

The Guidelines on Online Distribution and Advisory Platforms (Guidelines) issued by the Hong Kong Securities and Futures Commission (SFC) will become effective on 6 July 2019. With the recent expansion of various online financial platforms, the SFC began a public consultation in mid-2017 to introduce guidelines applicable to all SFC-licensed or registered persons when conducting their regulated...

A new profits tax exemption ordinance (Bill)1 became effective on 1 April 2019. The Bill introduces a Private Funds Exemption, which has significant implications for the private funds industry. Benefits include: fund managers no longer will need to artificially locate central management and control of the fund outside of Hong Kong; covered funds can enjoy the profits tax exemption when investing...

After a year of consultation with the mutual funds industry regarding changes that aim to modernise the regulatory regime for SFC-authorised funds, the Hong Kong Securities and Futures Commission (SFC) revised the Code on Unit Trusts and Mutual Funds (Revised UT Code), effective as of 1 January 2019. New funds with new managers and trustees/custodians that have not previously been vetted by the...

The Hong Kong International Arbitration Centre (HKIAC) recently released a new version of the HKIAC Administered Arbitration Rules, effective November 1, 2018. The new version updates the 2013 HKIAC Administered Arbitration Rules, and makes significant changes in the rules as discussed below.

Hong Kong is increasingly a popular jurisdiction for fund distribution, given its nexus with the People’s Republic of China. Historically, investment funds usually have been established in the form of offshore mutual funds, segregated portfolio companies or limited liability partnerships. To further develop Hong Kong into a full-service asset management hub, the Hong Kong government introduced an

Following an initial “soft” consultation with industry participants and relevant stakeholders, the Securities and Futures Commission (SFC) launched a three-month consultation on proposed amendments to the Code on Unit Trusts and Mutual Funds (UT Code). The consultation ended on 19 March 2018.

The Hong Kong Securities and Futures Commission (SFC) on 16 November 2017 published its Conclusions on its one-year consultation in relation to enhancement of asset management regulation and point-of-sale transparency (Conclusions). The SFC largely adopted its initial proposals, with a few modifications and clarifications as to regulatory intent. Further, in order to align with recommendations of

The Hong Kong Securities and Futures Commission (SFC) recently released a circular outlining its views on how asset managers should address certain conflicts of interest between private funds and separately managed accounts and avoid practices that undermine market integrity (Circular). The Circular sets out several examples of inappropriate conduct on the part of asset managers and informs the...

Recently, the Hong Kong Securities and Futures Commission (SFC) published a consultation paper on the Securities and Futures (Open-ended Fund Companies) Rules (Rules) and Code on Open-ended Fund Companies (Code) which, if adopted, will provide the detailed legal and regulatory requirements for the new open-ended fund company vehicles (OFCs) introduced pursuant to legislation last year. As...

The use of online platforms for distribution of financial products has become increasingly popular in Hong Kong. In May 2017, the Hong Kong Securities and Futures Commission (SFC) issued a Consultation Paper inviting comments on investor protection measures with respect to financial products offered on online platforms....

The Securities and Futures Commission of Hong Kong (SFC) recently introduced the “Senior Management Accountability Regime” (regime), in an effort to make senior managers (particularly those who are not already designated as “responsible officers”1) aware of their responsibilities as senior managers of SFC-licensed businesses and hold them accountable.

The Securities and Futures Commission of Hong Kong (SFC) and the China Securities Regulatory Commission (CSRC) issued a joint announcement on 25 November 2016 approving the launch of the long-awaited Shenzhen-Hong Kong Stock Connect and trading commenced on 5 December 2016. This supplements the prior joint official announcement made by the SFC and the CSRC in August 2016.

The official announcement of the launch of the long-awaited Shenzhen-Hong Kong Stock Connect was jointly made by the Securities and Futures Commission of Hong Kong (SFC) and the China Securities Regulatory Commission (CSRC) in August 2016. Originally expected to go “live” more than a year ago, it is now anticipated that the Shenzhen-Hong Kong Stock Connect will be operational by the end of 2016.

Similar to the situation in many other jurisdictions, fund managers, banks and other market participants in Hong Kong were, until recently, not required to apply the same regulations to high net worth, corporate or institutional investors as were applied to retail investors. Licensed intermediaries in Hong Kong were exempt from applying various regulatory requirements under the Hong Kong...

The Inland Revenue (Amendment) (No.2) Ordinance 2015 (the “Amendment Ordinance”) came into effect on July 17, 2015, extending Hong Kong profits tax exemption to offshore private equity (“PE”) funds.

1st Day of Christmas – UCITS V* - The UCITS V Directive (UCITS V) introduces specific provisions on: - (i) eligibility, liability and delegation of depositaries; - (ii) remuneration policies; and - (iii) new administrative sanctions and provisions encouraging whistle-blowing.

The Hong Kong Securities and Futures Commission (SFC) formally announced on 9 October 2015 the long-awaited overhaul of the retail fund authorization process, which comes into effect on 9 November 2015 for a six month trial period until 9 May 2016. The SFC also released a new information checklist to be used for new fund applications, as well as a set of FAQ on the revised procedures and...

On 1 July 2015, two significant developments in the Asian funds space will come into effect. Hong Kong’s Mutual Recognition of Funds Scheme (MRF) with the PRC will – for the first time – allow international managers to distribute their funds to domestic Mainland Chinese retail investors, after such funds have been registered by the local Chinese Securities Regulatory Commission (CSRC). Also, the...

2008 marked the height of the global financial crisis. The intervening years have seen criticism of financial regulators, a variety of enforcement activities and a raft of regulatory reforms. Hong Kong and its Securities and Futures Commission (SFC) are generally considered to have fared well in their response to the financial crisis. Five years on, we have analysed regulatory and enforcement...

In March of this year, the Hong Kong government issued an industry consultation paper (Proposal) introducing a new regime for establishing Hong Kong-domiciled open-ended fund companies (OFCs) that might be structured as investment funds. The Proposal has been a long time coming in response to industry feedback that such a regime – and the ability to establish OFCs in Hong Kong – is in line with...

Market participants were unsure what to expect when “Stock Connect” launched the morning of Monday, November 17, 2014.1 The program, sometimes called the Shanghai-Hong Kong “through-train”, provides a trading link between the Hong Kong and Shanghai Stock Exchanges that enables the participants of one exchange to trade certain equities on the other. With access to the Chinese securities markets...