ICAC calls on corporate leaders and professionals to foster ethical culture from boardrooms to storerooms

On 1 September 2017 the Independent Commission Against Corruption ("ICAC") Commissioner, Simon Peh Yun-lu, addressed participants at the ICAC's conference on business ethics, and identified ethical governance as the first line of defence against corruption. The conference, which was attended by over 500 corporate leaders from some 250 institutions, also heard from various speakers on the importance of developing an anti-graft management system within an enterprise and the importance of a clean business environment to Hong Kong's success. The Hong Kong Business Ethics Development Centre has stated that, following the conference, they will approach all listed companies in Hong Kong to provide support and guidance for strengthening ethical governance.

Hong Kong Court of Appeal finds against bank on the basis that the bank’s exclusion of liability clauses were unconscionable and unreasonable

The Hong Kong Court of Appeal ("CA") has recently affirmed a decision of the Court of First Instance ("CFI"), in which a ruling was made in favour of the plaintiff investors in a mis-selling claim against a bank, albeit on different grounds to that of the CFI (click here for the full judgment and here for our e-bulletin on the CFI decision). Overturning the CFI’s ruling on contractual interpretation, the CA held that the exclusion clauses in the bank’s services agreement did apply to the plaintiffs’ non-discretionary accounts. The CA however went on to find that the exclusion clauses the bank sought to rely on to limit its liability were unconscionable under the Unconscionable Contracts Ordinance and did not satisfy the requirement of reasonableness under the Control of Exemption Clauses Ordinance. This is the first decision of its kind where the court considered unconscionability in a banking context. Our recent e-bulletin examines the decision in more detail.

Asset managers and their senior management (including MICs) warned of action for regulatory non-compliance in Hong Kong

Boards and senior management (including Managers-in-Charge of Core Functions ("MICs")) of asset managers have been called on by the Hong Kong Securities and Futures Commission ("SFC") (31 July 2017 circular) and the Hong Kong Monetary Authority (2 August 2017 circular) to ensure they maintain adequate management oversight of their firm’s business activities and to ensure maintenance of appropriate standards of conduct and proper risk management measures, after the SFC identified a number of potential regulatory concerns.

The SFC has said that it will continue to closely monitor asset managers and will not hesitate to take action against any licensed corporations and their senior management for failure to comply with regulatory requirements. For more details please click here.

SFC and Hong Kong police sign MoU to strengthen co-operation in combatting financial crime

The Memorandum of Understanding ("MoU") sets out the framework for co-operation between the Hong Kong Police and the SFC and can be found here.

It covers matters including referral of cases, joint investigations, early involvement of the Department of Justice, the exchange and use of information, and the mutual provision of investigative assistance. It also establishes a framework for closer collaboration on policy, media strategy and training. The SFC and the Hong Kong Police expect that strengthening the collaboration between the two parties will enhance their overall effectiveness in dealing with wrongdoing in the securities and futures industry.