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Screenshot of a breaking news alert e-mail from Q2 2017
The Hong Kong Securities and Futures Commission (SFC) has released consultation conclusions on proposed Guidelines on Online Distribution and Advisory Platforms.
The guidelines provide tailored guidance to the industry on the design and operation of online platforms, including specific guidance on the provision of automated or robo-advice. The guidelines also clarify that the posting of factual, fair and balanced materials on online platforms should not in itself trigger the suitability requirement.
We hope that the clarifications and guidance will facilitate the growth of online platforms, giving investors greater choice of products and advice,” said Mr Ashley Alder, the SFC’s Chief Executive Officer.
The SFC will implement the requirement for platform operators to ensure the suitability of complex products sold, recognising that retail investors should be in a position to take responsibility for their decisions to invest in simple products which they can reasonably be expected to understand.
The guidelines represent a balanced regulatory approach. They allow more flexibility for investors to manage their investments online, whilst providing them with additional protection in relation to complex products whose features and risks retail investors may have difficulty in fully understanding,” Mr Alder added.
The guidelines will become effective 12 months after gazettal. The SFC will publish frequently asked questions to provide further guidance to the industry.
The SFC proposes to apply the same requirement to ensure suitability to the offline sale of complex products and has commenced a two-month consultation on this proposal.