The Securities and Futures Commission (SFC) today published updated codes and guidelines for implementing the new Type 13 regulated activity (RA 13) regime governing public fund depositaries, which will take effect on 2 October 2024 (Note 1).
To facilitate the transition for existing practitioners, the SFC has processed their applications and will grant RA 13 licences or registrations to 19 depositaries under major banking or insurance groups operating in Hong Kong and over 300 of their staff members on the launch date (Note 2 and Note 3).
Under the new regime, depositaries of SFC-authorised collective investment schemes (CISs) operating in Hong Kong are required to be licensed by or registered with the SFC to conduct RA 13 (Note 4).
"Bringing depositaries of CISs under the new RA 13 regime forms a vital part of the SFC’s strategy to enhance our regulation of public funds, with an aim to align with international practice and enhance investor protection," said Ms Julia Leung, the SFC’s Chief Executive Officer. "In collaboration with our industry partners and stakeholders, this key building block will help strengthen Hong Kong’s position as an international asset and wealth management hub."
Depositaries licensed or registered for RA 13 must comply with applicable conduct and regulatory requirements, similar to licensed corporations or registered institutions for other regulated activities.
The updated codes, guidelines and other regulatory information are now accessible on the SFC website (Note 5) and will take effect from 2 October 2024.
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Notes:
This follows the completion of the legislative process for introducing RA 13 into the Securities and Futures Ordinance on 17 May 2023. To facilitate a smooth transition, the SFC issued a circular on 27 July 2023 inviting depositaries operating in Hong Kong to submit their RA 13 applications ahead of the new regime, and guided the industry on the scope of RA 13 and the transitional arrangements. It also explained the RA 13 regulatory framework through industry seminars, and has actively discussed with industry participants to address their issues and clarify the requirements.
The 19 depositaries to be licensed or registered for RA13 (in alphabetical order) are:
1. AIA Company (Trustee) Limited
2. Bank Consortium Trust Company Limited
3. Bank of Communications Trustee Limited
4. Bank of East Asia (Trustees) Limited
5. BNP Paribas
6. BOCI-Prudential Trustee Limited
7. Brown Brothers Harriman Trustee Services (Hong Kong) Limited
8. CCB (Asia) Trustee Company Limited
9. China Life Trustees Limited
10. Cititrust Limited
11. CMB (HK) Trustee Company Limited
12. CMB Wing Lung (Trustee) Limited
13. DB Trustees (Hong Kong) Limited
14. HSBC Institutional Trust Services (Asia) Limited
15. ICBC (Asia) Trustee Company Limited
16. Principal Trust Company (Asia) Limited
17. Standard Chartered Trustee (Hong Kong) Limited
18. State Street Bank and Trust Company
19. State Street Trust (HK) Limited
For the purposes of 11.1(b) of the Code on Unit Trusts and Mutual Funds (UT Code) and 10.1(b) of the Code on Pooled Retirement Funds (PRF Code), no prior approval from the SFC will be required for the change in regulatory status of becoming licensed or registered for RA 13 in respect of existing depositaries. The filing requirements under 11.1B of the UT Code or 10.1B of the PRF Code (as the case may be) should be followed.
A depositary which is an authorized institution will have to be registered with the SFC for RA 13 as a registered institution, and will be subject to the ongoing supervision of the Hong Kong Monetary Authority as the frontline regulator.
The following publications will take effect on 2 October 2024:
Codes a. (Updated) Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission b. (Updated) Fund Manager Code of Conduct c. (Updated) Code on Unit Trusts and Mutual Funds as set out in Section II of the SFC Handbook for Unit Trusts and Mutual Funds, Investment-Linked Assurance Schemes and Unlisted Structured Investment Products d. (Updated) Code on Pooled Retirement Funds e. (Updated) Code on Real Estate Investment Trusts Guidelines f. (Updated) Guidelines on Competence Forms and checklist Unit Trusts and Mutual Funds g. (Updated) Information Checklist for Application for Authorization of Unit Trusts and Mutual Funds under the Revamped Process h. (Updated) Confirmation of fulfilment of approval/authorization conditions i. (Updated) List of Confirmations of Compliance related to Application for Approval of Scheme Change(s) pursuant to 11.1 of the Code on Unit Trusts and Mutual Funds Pooled Retirement Funds j. (Updated) Compliance Checklist for Application of Pooled Retirement Funds Real Estate Investment Trusts k. (Updated) Checklist for Application for Authorisation of Real Estate Investment Trusts Frequently Asked questions l. (New) Various frequently asked questions relating to RA 13 Other materials m. (Updated) Guide on Practices and Procedures for Application for Authorization of Unit Trusts and Mutual Funds
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