Vivien Teu & Co spoke to Asian Private Banker on the new regulatory development effective 25 March 2016, which impacts sale and distribution of financial products to professional investors who are high-net-worth individuals or their corporate or trust vehicles.   (See our client update which details the regulatory change.)

We were quoted as follows:

• Private banks in Hong Kong face stricter and tighter due diligence requirements as the city’s Securities and Futures Commission (SFC) introduces a new regime, on how licensed and registered persons deal with professional investors.
• The changes will affect intermediaries with reared to high net worths individuals, also small-and-medium enterprises with investible portfolio or assets of US$8 million and US$40 million respectively.
• Previously professional investors that are not institutional investors, such as high net worths individuals,s trust corporations and corporate professional investors could be exempted from suitability processes, but now will have to undergo the same question-and-answer procedures as any other retail customer for assessing investment experience and situation to gauge suitability.
• The new requirements will impact the distribution of products at private banks, with the exception of sophisticated high-net-worth clients who invest under a corporate structure and satisfy an assessment of investment knowledge, experience of the investment decision market and decision-making process, which may include family offices.