New Type 13 License Effective by SFC

With the development of financial markets, the Securities and Futures Commission (SFC) of Hong Kong has officially announced that the new Type 13 regulated activity regime will take effect on October 2, 2024. This regime aims to enhance the regulation of public fund depositaries and promote transparency and stability in Hong Kong's financial markets.

Background and Purpose of the New Regime

Under the new regime, all depositaries of SFC-approved collective investment schemes operating in Hong Kong must obtain a license or registration from the SFC to conduct Type 13 regulated activities. This initiative aligns with international standards and aims to strengthen investor protection.

Regulated Depositaries

On the effective date of the new regime, 19 depositaries and over 300 of their staff will be granted licenses or registrations for Type 13 regulated activities. These depositaries are affiliated with major banking or insurance groups, demonstrating the industry's robust foundation and adaptability to new regulations. Among them are:

AIA Company (Trustee) Limited
China Life Trustees Limited
HSBC Institutional Trust Services (Asia) Limited
Standard Chartered Trustee (Hong Kong) Limited

Compliance Requirements

The SFC has updated a series of systems that licensed or registered depositaries must comply with, including applicable codes of conduct and regulatory requirements similar to those for other licensed entities or registered institutions. The implementation of this regime will enhance market transparency, strengthen investor protection, and reduce potential risks. Updated regulations include, but are not limited to:

Code of Conduct for SFC Licensees or Registered Persons
Code of Conduct for Fund Managers
Guidance on Competence
Guidelines on the Application Process for Recognized Unit Trusts and Mutual Funds

The SFC has also added a section on "Frequently Asked Questions Related to Type 13 Regulated Activities" to provide more information, including definitions of "plan documents" and "plan assets."

Conclusion

The new Type 13 regulated activity regime will officially take effect on October 2, 2024, marking a new milestone in Hong Kong's financial regulation. With the introduction of this regime, the SFC aims to further enhance Hong Kong's competitiveness in the international financial market and provide investors with a safer and more reliable investment environment. Updated codes, guidelines, and other regulatory materials are now available on the SFC website, and the industry should actively monitor developments and prepare accordingly.