On 5 May 2017, the Hong Kong SFC launched a three-month consultation in relation to proposed guidelines on online distribution and advisory platforms (Proposed Guidelines). The aim of the Proposed Guidelines is to provide tailored guidance and clarity on the design and operation of online platforms in compliance with existing regulatory requirements, including the Suitability Requirement.
Significantly, the Proposed Guidelines extend the Suitability Requirement to the sale of certain complex products on an online platform. This extension also applies in circumstances where no solicitation, recommendation or advice has been provided.
Depending on consultation feedback and whether this proposal is implemented, the SFC will also consider extending this new basis for triggering the Suitability Requirement to the offline environment. Submissions on the Proposed Guidelines must be received by the SFC no later than 4 August 2017.
The Consultation Paper issued by the SFC and accompanying Proposed Guidelines can be found on the SFC's website here. For an overview of the rationale, scope and key focus areas of the Proposed Guidelines from our FSR team in Hong Kong, please click here.
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