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Hong Kong's SFC initiates consultation on financial product distribution


The Securities and Futures Commission (SFC) in Hong Kong has initiated a consultation targeting the distribution of financial products promising additional returns and supplementary services. The regulatory body has declared that any advertisements, invitations, or documents related to structured products, where returns hinge on the fluctuations in the value of securities, will be deemed illegal unless they receive proper authorisation or exemption. Additionally, distributors are mandated to clearly communicate to investors the potential risk of not recovering their principal in funds lacking guaranteed features. The SFC also stipulates that the only permissible gifts from distributors to clients are fee discounts, and investors must retain the freedom to redeem their investments as frequently as outlined in the respective product documents.

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