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In relation to the imminent establishment of the Financial Dispute Resolution Centre Ltd (FDRC) and the enhancement of the regulatory framework (Note 1), the Securities and Futures Commission (SFC) today launched a consultation to solicit public comments on proposed amendments to the Code of Conduct for Persons Licensed by or Registered with the SFC.
One key proposal will require licensed or registered persons regulated by the SFC or the Hong Kong Monetary Authority (HKMA) to comply with the FDRC Scheme (FDRS) and be bound by its process (Note 2). Other proposals include provisions to oblige licensed or registered persons to enhance the complaint handling procedures and act in good faith under the FDRS.
“We welcome the establishment of FDRC as that will give rise to a dispute resolution scheme to help uphold investors’ rights and interests,” said Mr Ashley Alder, the SFC’s Chief Executive Officer, “Towards that end, we will continue to provide support to the Government to help implement this dispute resolution regime.”
The public is being consulted also on other proposed amendments, which aim to strengthen enforcement against market misconduct and to improve supervisory oversight of financial markets. These include:
- Recording of client orders: upgrading the order recording requirement so that telephone recording of client orders would be more readily available for dispute resolution and investigatory purposes.
- Reporting of suspicious activities: extending the existing reporting obligation, so that licensed or registered persons would have to report to the SFC any suspicious activities of their clients.
- Providing expert evidence: preventing licensed or registered persons from discouraging their employees from performing expert witness services for the SFC and HKMA.
Interested parties are invited to submit their comments to the SFC on or before 9 January 2012. Written comments may be submitted on line via the SFC website (www.sfc.hk), by email to enfconsultation@sfc.hk, by post or by fax to 2293 4962.
Notes:
1. On 9 February 2010, the Government published the consultation paper on the “Proposed Establishment of an Investor Education Council and a Financial Dispute Resolution Centre”. In the consultation conclusions published on 13 December 2010, the Government announced its decision to establish the FDRC by mid-2012.
2. The FDRC will be responsible for administering the FSRS to handle monetary disputes of less than $500,000 (per case) between consumers and financial institutions by way of mediation and, failing which, arbitration.
