Global Trustee and Fiduciary Services Bite-Sized Issue 11 2024

13 QUICK LINKS CULTURE CRYPTOASSETS ELTIFS EMIR FINANCIAL STABILITY BOARD FINTECH MIFID II/MIFIR OPERATIONAL RESILIENCE SUSTAINABILITY T+1 ASIA/PACIFIC EUROPE LUXEMBOURG NORTH AMERICA UNITED KINGDOM Global Trustee and Fiduciary Services Bite-Sized | Issue 11 | 2024 The Joint Statement says that in order not to lose momentum, details of the governance structure will follow shortly. It will be important that this governance is inclusive and ensures balanced sectorial and geographical representation. Link to Joint Statement here ASIA/PACIFIC SFC Engages Securities Industry on Regulatory Trends and Market Development On 24 October 2024, the Securities and Futures Commission (SFC) hosted a seminar with more than 200 financial sector representatives at its headquarters to engage the industry in ongoing discussion of key challenges and opportunities. During the seminar, the SFC shared its proactive measures to foster continued growth and stability for Hong Kong’s capital markets as well as recent developments related to virtual assets, the integrated funds platform and RMB fixed-income instruments. The SFC also provided an overview of the current capital market landscape through recent data on licensing, securities markets, sale of investment products and asset and wealth management. In addition, the SFC and industry participants engaged in a constructive dialogue on the evolving market dynamics. Link to SFC Press Release here SFC Fast-tracks Simple Fund Authorisation to Bolster Hong Kong Market Appeal On 21 October 2024, SFC announced it will expedite the processing of applications from simple investment funds by launching the Fund Authorisation Simple Track (FASTrack) on 4 November 2024. Under FASTrack, the SFC says it aims to grant fund authorisations within 15 business days after receiving complete and quality submissions from applicants. The SFC states that the new approach will cover simple funds from jurisdictions which have mutual recognition of funds (MRF) arrangements with the SFC. As the regulatory regimes of MRF jurisdictions provide comparable investor protection to that of Hong Kong and the SFC has entered into cooperation arrangements with their home regulators, the SFC considers it appropriate to streamline the authorisation process of eligible funds. These include equity, bond and mixed funds, among others. The SFC says that it will monitor the operation of FASTrack during a six-month pilot period ending 4 May 2025 and refine it as appropriate before formal adoption. The SFC also issued a pamphlet setting out the new features and a circular explaining the new authorisation process. Link to SFC Press Release here SFC Flags Asset Manager Misconduct in Managing Private Funds and Discretionary Accounts On 9 October 2024, the SFC issued a circular flagging various deficiencies and substandard conduct identified during its supervision of licensed corporations engaged in managing private funds and discretionary accounts (referred to as asset managers in the SFC’s circular). The SFC says that the severity of misconduct in many of these cases has seriously jeopardised investor interests, thereby undermining confidence in Hong Kong’s market integrity and status as an international asset management centre. The SFC states that these instances also reflected a lack of integrity on the part of the asset managers or their senior management who were involved, as well as failure of the senior management to provide effective supervision. The SFC circular highlighted cases involving breaches of regulatory requirements in areas ranging from conflicts of interest, risk management and investment within mandate, information for investors, to valuation methodologies. It also sets out the existing obligations applicable to asset managers in these circumstances. The SFC says that asset managers should review the areas of concern set out in the circular and take measures to rectify any deficiencies identified accordingly.