Oversight January 2018 - Advertising guidelines amended

Under the Securities and Futures Ordinance (SFO), it is an offence to issue any advertisement with regard to a collective investment scheme to the public unless the advertisement is either approved by the Securities and Futures Commission (SFC) or within an exemption. In practice, the SFC will only allow advertisements in respect of any collective investment scheme if that fund has been authorised by the SFC under the SFO in accordance with the SFC’s Code on Unit Trusts and Mutual Funds (UT Code). Under the UT Code, advertisements do not necessarily need to be vetted by the SFC. However all advertisements relating to SFC authorised funds to be issued in Hong Kong must comply with the requirements of the SFC’s Advertising Guidelines Applicable to Collective Investment Schemes Authorised under the Product Codes (Advertising Guidelines).

On 18 September 2017, the SFC issued a new FAQ34A to its Frequently Asked Questions on Advertising Materials of Collective Investment Schemes Authorised under the Product Codes (FAQs) in relation to the use of performance information of funds that are not authorised by the SFC in advertisements of SFC authorised funds.

This Oversight summarises the changes introduced by the SFC’s new FAQ34A and analyses the practical implications for managers of SFC authorised funds.

Download the full article