6 April 2021
On 11 December 2020, the Securities and Futures Commission (the “SFC”) published a Consultation Paper on Proposed Enhancements to the Competency Framework for Intermediaries and Individual Practitioners (the “Consultation Paper”), proposing to amend the SFC’s Guidelines on Competence (“Competence Guidelines”) and the Guidelines on Continuous Professional Training (“CPT Guidelines”).
The proposed enhancements to the Competence Guidelines are:
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to raise the minimum academic qualification requirements for individuals and broaden the scope of recognized academic qualifications;
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to introduce a full exemption from obtaining recognized industry qualifications for temporary licence applicants;
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to refine the applicability of the conditional exemption from passing the local regulatory framework papers under paragraph 8 of Appendix E to the 2003 version of the Competence Guidelines for licensed representatives (“LR”);
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to elaborate on the relevant industry experience requirements;
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to clarify the management experience requirements for Responsible Officers (“RO”); and
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to enhance the competence requirements for individuals who intend to advise on matters in relation to the SFC Codes on Takeovers and Mergers and Share Buy-backs (the “Code on Takeovers”).
The proposed enhancements to the CPT Guidelines are:
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to simply the basis for the determination of the continuous professional training (“CPT”) obligation by requiring each individual practitioner to take a specific number of CPT hours annually;
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to specify 10 CPT hours per calendar year as the minimum requirement for LRs and relevant individuals, and 12 CPT hours for ROs and executive officers;
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to require that every calendar year each individual practitioner attend at least five CPT hours on topics directly relevant to the relevant activity in which he or she engages, those engaging in sponsor work take 2.5 hours of sponsor-related CPT and those engaging in transactions related to the Codes on Takeovers take 2.5 hours of Codes on Takeovers-related CPT;
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to require each individual practitioner to complete no less than two CPT hours on topics relating to ethics or compliance per calendar year;
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to require each new individual practitioner in Hong Kong (excluding temporary licensees) to complete two CPT hour on ethics within 12 months as a one-off requirement; and
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to update the list of topics relevant for CPT purposes in light of the market development.
The indicative drafts of the revised Competence Guidelines are found in Appendix A and the revised CPT Guidelines are found in Appendix C of the Consultation Paper. The full Consultation paper is available at this link. The consultation closed on 10 February 2021. The SFC proposes to implement the revised Competence Guidelines and CPT Guidelines at least six months after their publication and in any event no earlier than 31 December 2021.
For further information, please contact:
Louise Yam, Trainee Solicitor, Hauzen LLP
