Online distribution and advisory platforms – A new focus for sales suitability and IT regulations

Online distribution and advisory platforms

The SFC Guidelines on online distribution & advisory platforms – who will be impacted and the effects on current offline investment selling practices

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In recent years, regulators have announced a number of initiatives to prepare SFC-licensed corporations and banks performing regulated activities in Hong Kong for investment selling through online platforms, and to encourage them to embrace opportunities brought about by technology, in particular, online wealth management.

With the potential rise of online investment selling and the need to revisit regulations in this area, regulators have been issuing circulars and guidelines on the relevance of the sales suitability regime and IT regulations in the context of online selling. On 28 March 2018, the SFC issued the Consultation Conclusions on the Proposed Guidelines on Online Distribution and Advisory Platforms and Further Consultation on Offline Requirements Applicable to Complex Products (“the Guidelines”), which will become effective on 6 April 2019. The Guidelines aim to provide tailored guidance to the industry on the design and operation of online platforms, and to clarify how the suitability requirements would operate in an online environment. 

The flyer looks at who will be impacted by the Guidelines, how they will affect current offline investment selling practices, and how KPMG can help.

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