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ARTICLE · 22 AUGUST 2017

SFC (The "Commission") Expresses Concern Over Irregularities In Asset Management Activities

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Asset managers should maintain proper and effective risk management policies and procedures to identify and manage the risks to which each fund or discretionary account is, or may be, exposed.

Hong KongFinance and Banking
Anne-Marie Godfrey
Anne-Marie Godfrey
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Key Points 

  • The Commission has identified a number of regulatory concerns with respect to private funds and discretionary accounts, in particular, funds with concentrated, illiquid and interconnected investments.
  • The Commission has reminded asset managers and their senior management to maintain appropriate standards of conduct and to strengthen their supervisory and compliance policies and procedures.
  • The Commission has reminded asset managers that failure to act in the best interests of clients impacts their fitness and properness to hold a licence. 

Irregularities Identified by the Commission Relating to Investments in Listed Companies

On 31 July 2017, the Commission published a circular to asset managers in respect of irregularities identified in private funds and discretionary accounts (the "Circular"). The Commission has become aware of instances in which asset managers have engaged in practices of which the nature and commercial substance were

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