Deep Chao TechFlow news, the Hong Kong Securities and Futures Commission (SFC) issued a circular on October 9, pointing out that a number of asset management companies have engaged in serious misconduct in the management of private funds and entrusted accounts. Dr. Ip Chi-heng, executive director of the Intermediaries Department of the SFC, said that these behaviors have seriously damaged investors' confidence in the Hong Kong market, and the SFC will make cracking down on such misconduct in the asset management industry a top priority in the coming year.
The issues revealed by the circular include conflicts of interest, inadequate risk management, investments beyond authorized scope, improper information provided to investors and improper valuation methods. To address these issues, the China Securities Regulatory Commission will launch thematic inspections, focusing on examining whether asset management companies comply with applicable regulatory requirements when managing private funds. Dr. Ye Zhiheng warned that if serious violations or misconduct are discovered during the inspection process, the China Securities Regulatory Commission will not hesitate to hold the senior management of asset management companies accountable.
At the same time, the CSRC also called on investors to be prudent when making investment decisions, to obtain the latest relevant information from asset management companies, and to ensure that private funds or authorized investment scopes are in line with their investment objectives and risk profiles. The circular also emphasized that the board of directors and senior management (including core functional managers and responsible personnel) of asset management companies should bear the primary responsibility for ensuring that the company maintains appropriate standards of conduct, and should strengthen monitoring and compliance functions to comply with all applicable regulatory requirements.