Hong Kong SFC Licensing and Compliance Hints
Is your firm monitoring compliance with the liquid capital thresholds continuously?
As the financial resilience of some firms is being tested in the face of the COVID-19 crisis, it is timely for us to remind clients that a HK SFC licensed firm’s “liquid” capital must always exceed its “required” liquid capital and that it must formally notify the SFC "as soon as reasonably practicable and in any event within one business day of becoming aware”, if, amongst other things, its liquid capital ever falls below 50% of the liquid capital reported in its last submitted return or 120% of the required minimum amount.
Where a notification is required, the firm also needs to furnish the SFC with the details of the drop and where applicable, details of any steps it has taken or proposes to take to prevent its liquid capital from falling below the required liquid capital. If the liquid capital is in the 20% buffer zone, typically, the SFC will want an urgent injection of new capital.
Deadline for passing regulatory examinations – automatically extended by three months
The SFC published FAQs on licensing related matters in light of the COVID-19 pandemic on 31 March 2020 in which it announced that individuals who need to pass post-licensing regulatory examinations by 30 September 2020 will now have an additional three months within which to pass them. The deadline has been automatically extended so they do not need to submit any application to the SFC.
Unfulfilled CPT hours can be carried forward to 2021
In light of the fact that many courses have been suspended or cancelled because of the current situation, the SFC has also decided to allow all licensed individuals who are unable to fulfil their 2020 CPT hours this year, to carry forward any unfulfilled CPT hours to 2021.
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