Hong Kong Securities And Futures Commission: Learn More From Own Brokerage Before Investing Overseas Via ATS

In the latest issue of InvestEd Intelligence, the Securities and Futures Commission (SFC) reminds investors to ask their brokerages for more information before investing overseas via an SFC-authorized automated trading service (ATS).

An overseas exchange or trading facility must first seek the SFC’s authorization to provide ATS in Hong Kong. Brokerages who have signed up as participants of an SFC-authorized ATS can help clients trade directly in the related overseas market. In fact, they are obliged to give investors all relevant information relating to the ATS transactions, eg, how the orders will be processed, how to obtain a timely price quote, and whether that overseas investment is covered by any compensation mechanism.

“When investing in a different jurisdiction, investors are subject to an environment that can be very different from Hong Kong’s, including trading hours, trading and clearing arrangements and market rules,” said Mr Ashley Alder, the SFC’s Chief Executive Officer. “It is therefore crucial for an investor to find out from his or her own local brokerage relevant information about the ATS’s operations and the overseas market.”

In this issue’s “Sounding Board” column, Mr Stephen Tisdall, Senior Director, Intermediaries Licensing and Conduct, explains the “functional” regulatory model specific to Hong Kong’s financial markets, using the investment-linked assurance scheme (ILAS) to illustrate his point. He urges investors to contact directly the responsible regulators, notably the Insurance Authority in case of the sale of an ILAS, for concerns to be addressed more efficiently and effectively.

The “Choosing Wisely” column gives an account of key risks and fees relating to Renminbi Qualified Foreign Institutional Investor (RQFII) funds, and discusses how the RQFII scheme differs from the Qualified Foreign Institutional Investor (QFII) scheme.

Meanwhile, the “Case in Point” column cautions investors against a new trick adopted by boiler room operators. These fraudsters send scratch-and-win cards to get unsuspecting individuals to pay a fee to claim a prize that never exists. March’s “IE Activities Planner” invites the public to enjoy “Pointers for Investing”, a new series of informational videos being aired on now TV and Cable TV through early June.

InvestEd Intelligence is a bimonthly newsletter for investors, which provides a diverse range of educational information about investing. Topical market issues, product development information and regulatory updates are among topics to be covered regularly. The newsletter is published at the SFC’s InvestEd site on the 20th day of every odd month, or the business day after, if the 20th falls on a Saturday or a public holiday.

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Note:
1. News media are welcome to reproduce materials in InvestEd Intelligence upon acknowledging the source of the information.