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Markets and Securities Services |
China
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The SFC expects an MIC to have authority
(apparent or actual) over the Core Function(s) for
which the MIC is responsible. The SFC expects an
individual who is appointed as an MIC to have:
• A position in the licensed corporation that is
of sufficient authority to enable the individual
to exert a significant influence of the conduct
of the Core Function.
• Authority to make decisions (e.g. assume
business risk within preset parameters or
limits) for that Core Function.
• Authority to allocate resources or incur
expenditures in connection with the particular
department, division or functional unit
carrying on the Core Function.
• And authority to represent a particular
department, division or functional unit
carrying on that Core Function, e.g. at senior
management meetings or in meetings with
outside parties.
Identifying MICs of a licensed corporation within
an international organisation with multiple
reporting lines can present some challenges.
Where a Core Function involves a local, regional
and global reporting structure, the question to be
considered is to what extent the Hong Kong-based
individual has sufficient day-to-day authority in
the execution of such function. A lack of authority
by a locally based individual is likely to result in
having to trace the authority up the chain for the
purposes of identifying the relevant MIC.
The SFC has also indicated that it expects
licensed corporations to be satisfied that MICs
are “fit and proper” to act as MICs for the
relevant Core Functions.
In practice, that is likely to mean the individual
has sufficient knowledge, skill and expertise
to assume the authority and responsibility of
a senior manager in respect of the relevant
Core Function and has not been subject to a
disciplinary, regulatory or other sanction that
adversely affects his or her ability to perform
the relevant Core Function.
Once an individual has been identified, the
licensed corporation will need to obtain
acknowledgement from the individual of his or
her appointment as an MIC.
If an individual will be appointed as the MIC
responsible for either the overall management
oversight or a key business-line function, then