Hong Kong's SFC Consults on Regulating Trustees and Custodians

The Securities and Futures Commission (SFC) has released consultation conclusions and began a further consultation on a proposal to regulate depositaries (ie, top-level trustees and custodians) of SFC-authorised collective investment schemes (CIS).

In 2019, the SFC launched a consultation proposing to introduce a new regulated activity, Type 13 regulated activity or RA 13, to put depositaries of SFC-authorised CIS under the SFC's direct supervision. Respondents were generally supportive of the proposal, with some seeking clarification of the proposed licensing scope and conduct requirements. The SFC is now consulting the public on proposed amendments to subsidiary legislation and SFC codes and guidelines to implement the regime.

"The RA 13 regime will enhance the regulation of public funds in Hong Kong by regulating how depositaries safeguard scheme assets and oversee scheme operations," said Mr Ashley Alder, the SFC's Chief Executive Officer. "The new regulatory framework is in line with those in other leading international markets and is an important part of the SFC's efforts to develop Hong Kong as an international, full-service asset management centre."

The public is invited to submit their comments on or before 30 April 2022 via the SFC website (www.sfc.hk), by email to ra13-consultation@sfc.hk, by post or by fax to 2877 0318.