The Securities and Futures Commission (SFC) issued a circular recently to synchronise the implementation of the new professional investor (PI) regime and new client agreement requirements, part of which came into effect on 25 March 2016 and the other part will come into effect on 9 June 2017 respectively.
The SFC recognises that the different implementation dates for the two sets of requirements may give rise to the need for client agreements to be re-executed more than once. It will now allow additional time for intermediaries to comply with the following component of the new PI regime:
- The requirement to enter into a written client agreement and to provide relevant risk disclosure statements under the new paragraph 15.4(b) of the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission (Code of Conduct).
The deadline for compliance with this component will now be 9 June 2017, same as the implementation date for the new client agreement requirements. As with the new client agreement requirements, the SFC expects intermediaries to comply with this component well before 9 June 2017.
All other components of the new PI regime (under new paragraph 15 of the Code of Conduct), including the need to ensure the suitability of a recommendation or solicitation, came into effect on 25 March 2016 as originally scheduled.