Raising The Bar For Collective Investment Scheme Trustees And Custodians

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RAISING THE BAR FOR COLLECTIVE INVESTMENT SCHEME TRUSTEES AND CUSTODIANS

  • Andrew Neil
  • Published: 02 June 2021

 

Licensing regimes for Collective Investment Schemes (CIS) have become commonplace globally over the last couple of years, following the financial crisis and growing scrutiny of the standards for the custodians of assets managed under CIS. While Trustees and Custodians of public funds in Hong Kong have obligations to safeguard assets and conduct oversight, currently they are not subject to any licensing regime. However, through the proposed introduction of Type 13 Regulated Activity (RA13), the Securities and Finance Commission (SFC) seeks to bring Hong Kong in line with other jurisdictions by enforcing a licensing regime that will fundamentally and permanently impact the way in which Trustees and Custodians conduct business.

This article outlines why this is happening, what is expected to change and it’s implications as well as the recommended next steps to thoroughly scope business impact and ensure compliance.