Government proposals to enhance anti-money laundering and counter terrorist financing   

The Government has issued a combined consultation conclusions paper on its two consultation papers issued in January 2017 setting out proposals to (i) enhance the transparency of beneficial ownership of Hong Kong companies and (ii) extend the customer due diligence (CDD) and relevant record-keeping requirements to designated non-financial businesses and professions (DNFBPs). The Government is planning to take the proposals forward and introduce amendment bills into the Legislative Council by July 2017. The Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) have collectively taken disciplinary actions against five regulated entities and an individual relating to breaches of AML and CFT requirements since March 2017. For more on disciplinary actions please click here.

Court of Appeal upholds MMT finding of no insider dealing  

The Court of Appeal has dismissed the Securities and Futures Commission (SFC) appeal against the determination of the Market Misconduct Tribunal (MMT), that there was no insider dealing in the shares of Asia TeleMedia Limited (ATML) (now known as Reorient Group Limited).  The MMT found that there was no insider dealing on the part of Mr Yiu and Ms Wong as their possession of price sensitive information (PSI) was not a factor inducing them to deal in the shares (a defence to insider dealing).  It accepted that although at the time of dealing they were knowingly in possession of PSI, they had exercised their share options solely to take advantage of a sudden and unexpected speculative surge in the price of ATML shares and that there was no indication of intent to misuse the PSI in their possession.  The Court of Appeal rejected a new argument raised by the SFC and saw no basis to interfere with the MMT's factual findings.

SFC bans former relevant individual of registered institution for life over theft  

The SFC has banned a former relevant individual of a registered institution from re-entering the industry for life.  This follows his conviction for theft by the Eastern Magistrates’ Court in October 2016, for which he was sentenced to two months' imprisonment.  The court found that the individual, who was a branch manager, had stolen an estimated £3000 from a cash box assigned to him on several occasions in September 2016. As a result, the SFC considers that he is no longer a fit and proper person to be licensed or registered to carry on regulated activities and faces a ban for life.