Oversight June 2018 - SFC issues consultation conclusions on amendments to the PI Rules
This Oversight considers the Hong Kong Securities and Futures Commission’s consultation conclusions on the proposed amendments to the Securities and Futures (Professional Investor) Rules.
On 01 March 2017, the Securities and Futures Commission (SFC) launched a consultation (Consultation) on the proposed amendments to the Securities and Futures (Professional Investor) Rules (PI Rules). On 18 May 2018, the SFC published its consultation conclusions (Consultation Conclusions) on the proposed amendment to the PI Rules. The amendments to the PI Rules (Revised PI Rules) have been gazette and are expected to come into effect on 13 July 2018.
The PI Rules prescribe additional categories of persons who may be treated as “professional investors” for certain SFO related purposes to those defined in Schedule 1 to the SFO. Please refer to our Oversight of April 2017 for a detailed discussion of the Consultation.
The SFC’s main proposals in the Consultation were as follows:
- allowing an individual to aggregate (i) the individual’s share of a portfolio held in a joint account with one or more non-associates and (ii) a portfolio held by an investment corporation owned by the individual in determining whether the individual meets the monetary threshold to qualify as a professional investor
- expanding the definition of corporations to qualify as professional investors, and
- expanding alternative forms of evidence demonstrating qualification as professional investors.
This Oversight discusses the SFC’s Consultation Conclusions and the Revised PI Rules, and the implication for fund managers and investors.
