The Hong Kong Securities and Futures Commission (SFC) has reprimanded UBS AG and UBS Securities Asia Limited (UBSSAL) (collectively, UBS) and fined them HK$9.8 million and HK$1.75 million respectively for multiple regulatory breaches, including the failure to obtain standing authorities when investing for non-Professional Investors (PIs). According to the SFC notice, UBS AG was fined for breaches in areas including […]

The post Hong Kong SFC fines UBS HK$11.55 million over regulatory breaches appeared first on Asian Private Banker.

Regulators in Hong Kong and Singapore have each issued a notice in the wake of the recent market volatility caused by social media hyping up stock of GameStop, AMC and BlackBerry. The Hong Kong Securities and Future Commission (SFC) cautions investors on trading volatility, while the Monetary Authority of Singapore (MAS) warns against the risk related to trading incited by […]

The post SFC reminds intermediaries to act in the best interests of clients when trading highly volatile securities appeared first on Asian Private Banker.

In its latest information paper guiding private banks on sales and advisory practices, the Monetary Authority of Singapore (MAS) tends to converge with the client suitability standards set by the Hong Kong Monetary Authority (HKMA), according to Synpulse. MAS released its Information Paper on Private Banking Sales and Advisory Practices this February, reviewing the standards of governance, investment suitability, pricing […]

The post MAS shows signs of moving towards Hong Kong standard of suitability: Synpulse appeared first on Asian Private Banker.

The Monetary Authority of Singapore (MAS) has found instances where PB clients were charged more than what was agreed in fee schedules and where RMs had alluded to risk profiling as a “paper exercise”. It has urged PBs to improve the design and effectiveness of control processes in the areas of investment suitability and pricing controls and disclosures. More generally, […]

The post Some PBs overcharge clients and are perfunctory in risk profiling: MAS appeared first on Asian Private Banker.

Credit Suisse Private Banking’s penetration rate in managed solutions reached record levels in 2019, with an unprecedented growth of 30% in advisory mandates and over 20% YoY in discretionary mandates sales by Q3 2019. The momentum looks set to continue in 2020. The growth in advisory mandates take-up was led by increasing client adoption of Credit Suisse Invest. The greater […]

The post Credit Suisse PB achieves “record levels” of managed solutions penetration appeared first on Asian Private Banker.

2019 was a long year for many in the region. The implementation of complex product suitability checks in Hong Kong occupied the first seven months of most private banking compliance staff, while the latter part of the year saw preparations for the anticipated economic downturn, not to mention the persistent US-China trade war and Hong Kong protests. Regulators in the […]

The post Regulatory trends in 2019 appeared first on Asian Private Banker.

Product characterisation for actively-managed certificates (AMC) — complex investment products gaining popularity among UHNWs — can differ across structure and jurisdiction, meaning private banks should process client suitability on a case by case basis, Jason Valoti, partner at Simmons & Simmons, told Asian Private Banker. Because AMCs can be implemented by private banks in a matter of weeks compared with […]

The post AMC suitability needs to be assessed on a “case by case” basis: Simmons & Simmons appeared first on Asian Private Banker.

Private banks are increasingly lagging behind in digital service offerings as resources are shifted towards regulatory compliance and increasing business efficiency, according to respondents from the latest Hong Kong Private Wealth Management Report (PWM Report), co-published by the PWMA and KPMG. While digitalisation has become an increasingly important aspect of the business agenda for private banks in recent years, 64% […]

The post PBs lag in digital offerings as reg compliance prioritised appeared first on Asian Private Banker.

Shortly after the revised suitability regulations were implemented on 6 July, the Hong Kong Monetary Authority (HKMA) issued an FAQ document to clarify which products fall under ‘debt instruments with loss-absorption features and related products’ (loss-absorption products), for which the compliance deadline has been extended by two-to-five months. The latest FAQ highlights that the “policy intention” of the October 2018 circular […]

The post HKMA further extends suitability deadline for select products appeared first on Asian Private Banker.

The Securities and Futures Commission (SFC) published a circular last week to provide further clarification for its online and offline suitability requirements, which are due for implementation on 6 July 2019. In the FAQs published last Thursday, the SFC reiterated its point in a previous guiding document that the categorisation of complex and non-complex products should only be made when […]

The post New FAQs on HK suitability requirements a “positive development” for private banks appeared first on Asian Private Banker.

In order to mitigate the burden brought about by the new suitability rules, private banks will likely adopt a portfolio approach to assessing suitability in order to take “full advantage” of the flexibility offered by the Hong Kong Monetary Authority (HKMA), according to EY. “The requirement change has a significant impact on private banks. Banks do quite a lot with […]

The post PBs adopt portfolio suitability approach to “take full advantage” of HKMA flexibility appeared first on Asian Private Banker.

According to the Securities and Futures Commission’s latest FAQs, solicited products must meet existing standards “regardless” of whether or not they are complex, thus potentially excluding solicited products from having to comply with the regulator’s revised suitability rules. “The determination of whether a product is a complex product or a non-complex product is required when a client purchases a product […]

The post SFC’s updated FAQs limit scope of new suitability rules appeared first on Asian Private Banker.

The Securities and Futures Commission (SFC) has granted financial institutions a three-month extension to implement the revised online and offline suitability requirements, the regulator announced on Tuesday, confirming Asian Private Banker’s report earlier this month that the watchdog was considering a more lenient deadline. Following extensive discussions with the Private Wealth Management Association (PWMA) and after it had “considered feedback […]

The post SFC extends deadline for revised suitability rules appeared first on Asian Private Banker.

The Securities and Futures Commission (SFC) is considering extending the implementation deadline for the revised suitability requirements following extensive discussions with the private banking industry, led by the Private Wealth Management Association (PWMA), sources close to the matter told Asian Private Banker on the condition of anonymity. In October last year, the Hong Kong regulator published its consultation conclusion on […]

The post SFC considers PWMA’s suggestion to extend suitability rules deadline appeared first on Asian Private Banker.

As private banks in Hong Kong race to meet the imminent deadline for the new suitability requirements, some industry players worry the rules will “kill” the execution-only business. The Securities and Futures Commission (SFC) set a 6 April deadline for meeting its revised suitability rules for online and offline sales, which instruct banks to carry out product due diligence on […]

The post PBs worry SFC’s new suitability rules will “kill” execution-only business appeared first on Asian Private Banker.

Banks in Hong Kong are feeling the pressure mount as the Securities and Futures Commission’s (SFC) April implementation deadline for the new suitability requirements edges closer, according to an industry professional. In a bid to strengthen investor protection, the Hong Kong watchdog revised its due diligence regulations last year. According to the new rules, suitability checks are required for every […]

The post Banks struggle to implement SFC’s new due diligence requirements appeared first on Asian Private Banker.

The offline suitability requirements recently published by Hong Kong regulators could prompt intermediaries to narrow the scope of available execution-only transactions to avoid onerous suitability checks, thereby limiting the investment choices open to private clients. In order to create a level playing field between online and offline transactions of investment products, the Securities and Futures Commission (SFC) published the consultation conclusion […]

The post New offline suitability rules in Hong Kong may limit investor choice appeared first on Asian Private Banker.

The Hong Kong Monetary Authority (HKMA) has published a circular, encouraging banks to adopt a more holistic approach and use “any methodology as appropriate” when assessing clients’ suitability based on their investment horizons. The circular urges authorised institutions (AIs) to take a “holistic approach” by matching investment products with “all the personal circumstances” of a customer when conducting suitability checks. […]

The post HKMA encourages banks to be flexible in assessing product tenor suitability appeared first on Asian Private Banker.

The Securities and Futures Commission (SFC) has mandated suitability checks for all online and offline complex product sales, despite industry participants voicing their concerns. The Hong Kong regulator published the consultation conclusion on offline suitability requirements for complex product sales on Thursday. The requirements will be implemented on the same date as the online suitability requirements, 6 April 2019, in […]

The post SFC pushes for complex product suitability checks despite doubts from industry appeared first on Asian Private Banker.

Online suitability requirements are posing a “huge challenge” to private banks busy developing online platforms in Hong Kong, as the Securities and Futures Commission (SFC) judges banks’ suitability processes both online and offline. With the SFC’s proposed guidelines on online distribution and advisory platforms set to come into effect in April 2019, Mark Parsons, partner at law firm Hogan Lovells, said […]

The post PBs face “huge challenge” to meet online suitability requirements appeared first on Asian Private Banker.

The Hong Kong Monetary Authority (HKMA) has refined its definition of ‘complex products’ in an effort to smooth online sales processes and shine a light on how offline sales of such products will likely be regulated in the future. The bank regulator recently issued guidance on online distribution and advisory platforms for structured investment products that are not regulated by the […]

The post HKMA eases suitability requirements to facilitate online sales appeared first on Asian Private Banker.

Private banks’ increased spending on suitability solutions provided by tech firms could reduce implementation time by half amidst tightening compliance demands and sales process revamps, according to management consultancy firm Orbium. Amar Bisht, head of wealth strategy and advisory at Orbium, told Asian Private Banker that private banks are allocating “almost 60-70% of their [digital] budgets on compliance issues”, mostly […]

The post Suitability solutions with tech partners could cut implementation time in half: Orbium appeared first on Asian Private Banker.

Synchronising information between front-end apps and back-end systems is the biggest challenge to achieve online platform compliance under new guidelines set out by the Securities and Futures Commission (SFC), according to DBS’s digital strategy head, who told Asian Private Banker the bank is currently reviewing its systems in preparation for a products rollout on its iWealth app. “The challenge we face is to ensure […]

The post DBS aims to sync data across platforms ahead of iWealth products rollout appeared first on Asian Private Banker.

Private banks designing online suitability checks for complex products are in a “tricky” situation due to the ambiguity of the recently published Securities and Futures Commission (SFC) consultation conclusion on guidelines for online distribution and advisory platforms, a legal expert has warned. The conclusion, published by the Hong Kong regulator last month, includes a ‘non-exhaustive’ list of complex and non-complex products […]

The post SFC suitability checks for complex products “a tricky area” appeared first on Asian Private Banker.

The Securities and Futures Commission (SFC) has published a ‘non-exhaustive’ list in its consultation conclusion on guidelines for online investment platforms. The list will serve as a guide for platform providers on whether suitability requirements will be triggered for certain types of investment product sales. The SFC also announced a further consultation on how the guidelines for offline sales of “complex products” […]

The post SFC lists out “complex products” in suitability consultation conclusion appeared first on Asian Private Banker.

Credit Suisse says that it “fully cooperated” with Hong Kong’s Securities and Futures Commission in an investigation that led to the bank receiving fines totalling HK$39.3 million for internal control failures spanning 2003 to April 2017.  “Credit Suisse takes its regulatory responsibilities very seriously and has fully cooperated with the SFC during its investigation,” the bank’s spokesperson told Asian Private […]

The post Credit Suisse responds to SFC penalty appeared first on Asian Private Banker.

The regulatory drive towards fee disclosure may not be so useful to clients because it increases the complexity of documentation and does not point towards possible investment downsides that could possibly eat into client benefits. The Securities and Futures Commission (SFC) recently closed a consultation on proposed changes to how discretionary portfolio managers will be regulated under the Fund Manager Code […]

The post Fee disclosure scrutiny may not suit clients appeared first on Asian Private Banker.

A decade after the Global Financial Crisis, regulators over the world are tightening client protection measures, by enhancing regulatory structures and enforcement. Earlier this month, the comprehensive MiFID II regime went live Europe, and while the impact on Asia’s private banks is not expected to be substantial, specialists out of Luxembourg told Asian Private Banker that European-headquartered banks in Asia can […]

The post January Regulatory Round-up: limited MiFID II impact in Asia; DPM fee transparency; enforcement updates appeared first on Asian Private Banker.

Rounding out our coverage of the industry over the past twelve months, which has included commentary and insights from Asia’s leading wealth management practitioners (see the first entry in our Final Word series here), we tease out some of the most important trends and events that have shaped the industry in recent times. China rewrote the rule book for wealth […]

The post Nine recent trends that have shaped Asia’s PB industry appeared first on Asian Private Banker.

A lawyer has told Asian Private Banker that the Hong Kong Court of Appeal’s ruling against Bank of Singapore in a mis-selling case last year shows that it finally values the Securities and Futures Commission’s (SFC) code of conduct, having previously “brusquely dismissed” its significance. In 2017, Hong Kong authorities presided over a number of disputes stemming from the global financial crisis era, […]

The post BoS ruling shows courts are finally taking SFC regulations seriously: lawyer appeared first on Asian Private Banker.

Private banks scrambling to adapt their compliance workflows to suitability requirements set by Hong Kong regulators are turning to tech tools originally designed to address the European Union’s incoming Markets in Financial Instruments Directive II (MiFID II). Many industry players are drawing similarities between the Securities and Futures Commission’s (SFC) suitability requirements and the new proposal to strengthen suitability requirements […]

The post PBs using MiFiD II-compliant digi-tools to reduce suitability stress appeared first on Asian Private Banker.

The “record breaking” fine received by HSBC Private Bank (Suisse) SA Hong Kong may increase the emphasis on how to resolve disputes involving multiple clients, as the sheer number of complaints can act as a multiplier for the amount of fine, a lawyer tells Asian Private Banker. Hong Kong’s Securities and Futures Appeals Tribunal (SFAT) issued a ruling on HSBC […]

The post HSBC PB case will lead to greater emphasis on multiple complaints appeared first on Asian Private Banker.

The “very substantial lack of contemporaneous records” documenting the way relationship managers for HSBC Private Bank (Suisse) SA Hong Kong serviced clients with regards to structured products “troubled the tribunal”, according to the Securities and Futures Commission Appeals Tribunal (SFAT) ruling, issued yesterday. The SFAT was specifically referring to Lehman Brothers structured notes and forward accumulators sold to clients in Hong […]

The post SFAT cites “lack of contemporaneous records” in HSBC PB (Suisse) ruling appeared first on Asian Private Banker.

A good portion of private bankers in Hong Kong are failing to “clearly document” the consideration of alternative products to their clients, even after regulators tightened investment suitability processes earlier this year, sources tell Asian Private Banker. “Relationship managers are overstretched and this has led many to de-prioritise the alternative product proposal step – one of the many steps they […]

The post Private bankers failing to “clearly document” alternative product proposals despite guidance appeared first on Asian Private Banker.

Private bankers in Hong Kong, overburdened by the number of investment suitability checks they need to carry out, are increasingly turning to artificial intelligence solutions to cope, says George Ong, managing director of private banking tech vendor Axisoft. “Where I believe private banks in Hong Kong are still in a grey area is in the way their RMs manage product […]

The post Hong Kong’s private bankers turning to AI-driven tools to deal with suitability requirements appeared first on Asian Private Banker.

The Hong Kong Court of Appeal’s recent precedent-setting ruling in favour of investors in a mis-selling case against ING (now Bank of Singapore) will have a limited impact on product sales moving forward, given that Hong Kong implemented new suitability rules in June, lawyers say. Dominic Geiser, partner at Herbert Smith Freehills, believes that the case “might not have any real lasting impact, in […]

The post Mis-selling precedent will have “limited” long-term implications appeared first on Asian Private Banker.

The Securities and Futures Commission’s (SFC) new client suitability clause comes into effect today, despite lingering uncertainties relating to the definition of ‘solicitation’ and how the rules apply to ‘execution-only’ accounts at private banks, lawyers tell Asian Private Banker. After 18 months of preparations, legal experts believe that all the repapering and training needed for the smooth implementation of the […]

The post New suitability requirements enforced with questions unanswered, say lawyers appeared first on Asian Private Banker.

The Monetary Authority of Singapore (MAS) published a consultation paper today on the provision of digital advisory services – a month after the regulator’s counterpart in Hong Kong released a similar paper. MAS said it recognises the “unique characteristics” of digital platforms, and aims to ensure that the existing safeguards in the city-state’s legislation “continue to be relevant” for robo […]

The post MAS seeks industry’s input on robo advisory regulations appeared first on Asian Private Banker.

With four regulatory consultation papers having launched in Hong Kong over the past three months, private banks are beefing up their compliance departments, yet some lawyers believe that banks will need additional advice as they come to terms with the various changes on the horizon. Hong Kong’s Securities and Futures Commission (SFC) has launched four consultation papers so far this […]

The post Private banks require “a lot of guidance” amid multitude of regulatory consultations appeared first on Asian Private Banker.

Hong Kong’s Securities and Futures Commission (SFC) is holding consultations about the proposed guidelines on online distribution and advisory platforms, with much of the discussion revolving around client suitability requirements. The SFC proposes new scenarios that will trigger suitability requirements, based on whether investment products available online are considered ‘complex’. Asian Private Banker speaks to Clifford Chance consultant Helen Fok, […]

The post SFC’s proposed suitability requirements for online platforms will be “difficult” to meet, says law firm appeared first on Asian Private Banker.

As part of its efforts to provide more clarity on regulations related to online investment platforms, Hong Kong’s Securities and Futures Commission (SFC) will hold consultations about platforms’ suitability obligations “very soon”, says SFC CEO Ashley Alder. Since online investment advisory platforms are still relatively new client offerings, the SFC aims to ensure that users are able to safely access […]

The post Consultations on the suitability obligations of online platforms coming soon, says SFC’s Alder appeared first on Asian Private Banker.

Financial institutions should reassess the selling processes of their frontline staff in light of recent guidance on suitability obligations from Hong Kong regulators, according to law firm Baker McKenzie. The firm encourages banks to ensure that their frontline staff – relationship managers in the case of private banks – are clear in their communications with clients about the circumstances in […]

The post Banks should revisit frontline selling processes to ensure compliance with suitability requirements, advises law firm appeared first on Asian Private Banker.

A new clause that formalises the product recommendation process will impact private banks in Hong Kong in a number of fundamental ways, experts tell Asian Private Banker. Last December, SFC issued a circular stating that private banks must include in client agreements a clause that clarifies that the bank has solicited the sale of, or recommended, a financial product and […]

The post Experts predict impact of SFC’s suitability clause on PBs appeared first on Asian Private Banker.

Legal experts expect the industry-wide practice of “papering the selling process” will fade away once a recently introduced Securities and Futures Commission (SFC) clause formalising the product recommendation process comes into force next year. Many relationship managers (RMs) are using ‘waivers’ in order to recommend products that are not suitable for specific clients “A number of RMs who have learned that a […]

The post Clause for concern: SFC’s new requirement spells end for RM “papering practices” appeared first on Asian Private Banker.

Private banks in Asia continue to feel the heat from growing compliance costs, not to mention the market woes of 2015, headhunters say. This has been reflected by a decline in bonuses of up to 15% on average for relationship managers, with some Greater China desks receiving nothing. According to a seasoned recruiter, a third of Asia’s private bankers could […]

The post Little to no bonuses for some China private wealth teams appeared first on Asian Private Banker.

Experts believe a new clause introduced this month by Hong Kong’s Securities and Futures Commission (SFC) makes it even more crucial that banks and other financial intermediaries warn clients of how their investments may go wrong. Earlier this month, the SFC said in a report that licenced financial intermediaries must include in client contracts a new clause, which sets out explicitly […]

The post Suitability takes on extra legal obligation appeared first on Asian Private Banker.

Cheers should be sounding for the private banking industry as the Hong Kong Monetary Authority (HKMA) reiterated recent refinements made to the regulatory framework to clarify the definition of “private banking customers,” simplify business processes and revise the approach to assessing client suitability. The speech revisited the regulator’s decision in June this year to change the regulatory requirements governing the […]

The post HKMA reiterates regulatory refinements to make the private banking industry “more user-friendly” appeared first on Asian Private Banker.