SFC to standardise rules for prescribing professional investors

The Securities and Futures Commission (SFC) today launched a consultation on proposed amendments to the Securities and Futures (Professional Investor) Rules (PI Rules) to allow joint accounts with non-associates and assets held in investment vehicles owned by individuals to be counted in ascertaining whether individuals meet the monetary threshold to qualify as professional investors.

In addition, the categories of professional investors would be expanded to include corporations which have investment holding as their principal business and are wholly owned by one or more professional investors, as well as corporations which wholly own another corporation that is a qualified professional investor. Alternative forms of evidence would also be allowed to demonstrate qualification as a professional investor.

The proposed amendments are intended to enhance market transparency and promote consistency in the application of the PI Rules,” said Mr Ashley Alder, the SFC’s Chief Executive Officer. “Our key consideration is that the proposals should cater for the business needs of intermediaries and their clients without compromising investor protection.

Under the proposals, the SFC envisages that more persons will qualify as professional investors. Nevertheless, intermediaries remain subject to the suitability requirement and other fundamental requirements when serving them.

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