Financial Services Regulatory

Overview

Our Financial Services Regulatory practice has been consistently recognized as an outstanding, leading and recommended practice by independent editorial publications, including the International Financial Law Review 1000 (ILFR1000), the Legal 500, Chambers and Partners and Asialaw Profiles. Our lawyers in this area have consistently recognized as “market-leading”, “leading”, “highly regarded” and “well regarded” lawyers.

Our expertise in financial services regulation complements our practices in hedge funds, private equity, investment funds and retail funds, for which we have also been internationally recognized as leading practices by the IFLR1000, the Legal 500, Chambers and Partners and Asialaw Profiles.

Our Financial Services Regulatory practice also complements our White Collar Crime and Regulatory Defence practices in SFC Investigations & Prosecution, SFC Appellate matters and Market Misconduct Tribunal proceedings.

Securities and Futures Markets

Our market-leading regulatory lawyers frequently represent firms licensed by the Securities and Futures Commission (“SFC”) (“licensed corporations”), individuals licensed by the SFC (“licensed representatives”), responsible officers (“ROs”) and senior managers of licensed corporations.

Hedge fund managers, private equity sponsors, managers of units trusts and mutual funds, brokerage firms, wealth managers and independent financial advisers routinely trust us to advise on applying for an SFC licence.

Our work includes advising on the following:

  • SFC licensing, including whether an SFC license is required, what type of SFC license is required and how to meet SFC license requirements

  • SFC inspections and audits, including how to prepare for an SFC inspection and respond to SFC enquiries or requests for information and documents as part of an inspection

  • SFC investigations and prosecutions, including how to prepare for an SFC interview and respond to an SFC notice to produce documents and answer written questions, a notice of proposed disciplinary action or a summons

  • SFC regulatory compliance, including ongoing compliance with regulatory requirements and obligations under the Securities and Futures Ordinance (“SFO”) and the expectations of the SFC as set out in various codes, guidelines and circulars from time to time, including the Code of Conduct for Persons Licensed by or Registered with the SFC (“SFC Code of Conduct”), the Fund Manager Code of Conduct (“FMCC”), the Fit and Proper Guidelines, the Guidelines on Competence and responsible officer requirements

  • AML and economic sanctions, including compliance with Hong Kong anti-money laundering laws and regulatory guidance

  • M&A advisory for SFC regulated firms, including mergers and acquisitions involving SFC licensed corporations and banks and insurance companies sponsoring SFC authorized mutual funds, unit trusts or investment linked assurance schemes (“ILAS”) and compliance with regulatory obligations arising from a change of control, change of substantial shareholder, or both

Financial Market Infrastructure

Our market leading regulatory lawyers have extensive experience advising clients Hong Kong laws and regulations governing financial market infrastructure both in Hong Kong and overseas, including operators of trading and clearing platforms. Our work includes:

  • assisting a number of electronic trading system and clearing system operators to determine the need for authorization by the SFC as an automated trading service (“ATS”) and, where necessary, to apply for authorization by the SFC as an ATS provider

  • issuing legal opinions to the SFC on the insolvency of clearing members on behalf of clearing systems for futures contracts and derivatives

  • advising on the application of insolvency provisions of the SFO, the Companies (Winding-up and Miscellaneous Provisions) Ordinance (“CWUMPO”) and the Financial Institutions (Resolution) Ordinance (“FIRO”) to trading and clearing arrangements

  • reviewing the scope of the stock market monopoly granted to the Stock Exchange of Hong Kong (“SEHK”) operated by Hong Kong Exchanges and Clearing (“HKEx”) and the statutory restrictions in the operation of futures markets and commodities exchanges in Hong Kong

Insurance

Our regulatory team advises insurance companies, insurance agents and insurance brokers regulated by the Insurance Authority (“IA”). Our work includes advising on the following:

  • ongoing regulatory obligations under the Insurance Ordinance (“IO”) and codes and guidelines issued by the IA and the SFC from time to time, including the Code on Investment Linked Assurance Schemes (“ILAS Code”)

  • Mandatory Provident Fund arrangements governed by the Mandatory Provident Fund Schemes Ordinance (“MPFSO”) and regulated by the Mandatory Provident Fund Schemes Authority (“MPFA”)

  • applications for licensing under the IO and ongoing compliance with regulatory obligations by insurance brokers and insurance agents, including those set out in the Code of Conduct for Licensed Insurance Brokers and the Code of Conduct for Licensed Insurance Agents

In addition, through our market leading M&A practice, we have significant experience with mergers and acquisitions involving IA regulated insurers and insurance brokers.

Banking, Lending and Money Services

On the banking, lending and money services side, our work includes:

  • assisting authorised institutions including banks in complying with ongoing regulatory obligations under the Hong Kong Monetary Authority (“HKMA”) Supervisory Manual and guidelines issued by the HKMA, as well as with conduct of business requirements administered by the SFC in the case of SFC registered institutions

  • providing legal advice to electronic payment system operators, including stored value facility operators, on applicable regulatory requirements and obligations, including those set out in the Payment Systems and Stored Value Facilities Ordinance (“PSSVF”) and the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (“AMLO”)

  • assisting lenders in complying with applicable regulatory obligations including licensing requirements under the Money Lenders Ordinance (“MLO”) and advising on exemptions from licensing requirements and information disclosure and interest rate regulations

  • advising on money service operator (“MSO”) businesses, including licensing under the AMLO for money changing services and remittance services as part of our AML & Economic Sanctions practice.

With highly skilled corporate lawyers possessing years of experience in Hong Kong, we combine strong technical capabilities with a deep understanding of the Hong Kong and international business environment to provide sophisticated advice, strategic insights and pragmatic solutions to meet client commercial needs.

Awards

Chambers and Partners

Financial Services Regulatory

Leading Practice

2011

Chambers and Partners

Financial Services Regulatory

Leading Individual

2016

Chambers and Partners

Financial Services Regulatory

Leading Lawyer

2018

Chambers and Partners

Financial Services Regulatory

Well Regarded Lawyer

 

IFLR 1000

Financial Services Regulatory

"Positively Ranked"

2018

IFLR 1000

Financial Services Regulatory

Highly Regarded Lawyer

2019

Legal 500

Financial Services Regulatory

Leading Individual

 

Legal 500

Financial Services Regulatory

“Recommended Practice”

 

Asialaw Profiles

Financial Services Regulatory

Leading Practice

2016

Asialaw Profiles

Financial Services Regulatory

Outstanding Practice

2018

Asialaw Profiles

Financial Services Regulatory

Market Leading Lawyer

2017

Asialaw Profiles

Financial Services Regulatory

Leading Lawyer

2018

 

Experience

Acquisition of Trading Membership in Stock Exchange of Hong Kong for U.S Based Global Institution

Lead counsel to a US based global institutional agency broker in connection with the acquisition of a Trading Right and the application to become an Exchange Participant and the establishment of third party clearing arrangements.

Establishment of Broking-Dealing Office in Hong Kong for a Fortune Global 200 Financial Institution

Lead counsel to a Fortune Global 200 financial institution in relation to the establishment of a non-equities broking and dealing business in Hong Kong.

Global Corporate Re-Organization of Financial Institution

Hong Kong counsel to a Fortune Global 200 financial institution advising on complex tax and securities and insurance regulatory issues in connection with a global re-organization in connection with US Government TARP funding.

Defence of Regulatory Investigation into Crypto Exchange

Lead counsel to one of the world’s largest cryptocurrency exchanges in connection with an SFC investigation and an HKMA investigation. The exchange has daily digital asset trading volume exceeding US$4 billion.

Spin-off of Global Commodities Business

Hong Kong counsel to a Fortune Global 200 financial institution in respect of the US$430 million spin-off of its global commodities brokerage and derivatives business.

Sale of HK Life Insurer and FinTech ListCo Investment

Hong Kong counsel to a U.S. based insurer with over US$500 billion of assets under management in respect of the US$1.7 billion sale of an interest in its Hong Kong life insurance operations in exchange for an interest in Hong Kong listed fintech focused financial services provider.

Structuring of Gold Backed Stablecoin

Lead counsel to one of the world’s largest precious metals trading exchanges in respect of the structuring and issuance of a stablecoin which was created and redeemed upon delivery of underlying precious metal.

Tax Driven Corporate Restructuring for Fortune Global 500 Financial Institution

Hong Kong counsel to Fortune Global 200 financial institution in connection with a multi-step global corporate restructuring which triggered complex tax and regulatory issues.

Employment Dispute Between Former Portfolio Manager and Asset Management Group

Lead counsel to a portfolio manager of a PRC based asset management firm with over US$110 billion of assets under management in connection with potential employment, regulatory and negligence claims arising from a trading loss exceeding US$100 million.

Precedent Setting Market Misconduct Tribunal Case Relating to Activist Short Selling

Lead counsel before the Market Misconduct Tribunal, the Court of Appeal and the Court of Final Appeal in precedent setting market manipulation case stemming from the issuance of a short selling report targeting a PRC based company listed on the Stock Exchange of Hong Kong.

Successful Appeal to Court of Final Appeal in Precedent Setting Securities Law Case

Lead counsel to a hedge fund manager in a successful appeal to the Court of Final Appeal in a precedent setting case which defined the scope and application of the professional investors exemption.

Criminal Defence of Former Employee of Financial Institution on Suspicion of Fraud and Dishonesty

Lead counsel to former employee of a US based bank in respect of suspicions of fraud and dishonesty arising from trading activities. Advised on potential criminal offences and prepared submissions which ultimately resulted in no prosecution moving forward.

US$102 Million Sale of Private Wealth Management Business

Hong Kong counsel to U.S. based Fortune Global 200 financial institution with a market capitalization of over US$35 billion in respect of US$102 million sale of its private wealth management business to a European based financial institution.

SFC Inspection of Asset Management Firm with Over USD15 Billion of Assets Under Management

Lead counsel to PRC based asset manager with US$15 billion of assets under management in connection with an SFC inspection of its Hong Kong offices. Successfully assisted client to avoid adverse findings following initial compliance concerns.

Establishment of Hong Kong Operations by US Hedge Fund

Lead counsel to New York based hedge fund manager with over US$4 billion of assets under management on establishment of Hong Kong operations. Fund focused on volatility and convertible arbitrage and special situations. Addressed all corporate, tax, employment and regulatory issues.

Investment and Private Equity Real Estate Joint Venture

Co-counsel to US private funds manager on an investment into a Hong Kong private equity real estate fund manager with US$450 million of assets under management.

SFC Authorization of Retail Funds with €500 Billion AUM

Hong Kong counsel to European based asset manager with over €500 billion of assets under management in respect of the marketing of its flagship UCTIS funds in Hong Kong and mainland China.

Insights

Crypto Regulation in Hong Kong

New crypto regulation for SFC regulated intermediaries governs distribution, dealing and advising on virtual assets and virtual asset related...

Read Article>

M&A in Hong Kong: Due Diligence

We look at how M&A due diligence and M&A reps and warranties work in tandem in business acquisitions to meet the purchaser’s expectations.

Read Article>
Read Article>