The June 26th Circular from the Hong Kong Securities and Futures Commission (HK SFC) announced the submission of a new AML/CTF bill specifically aimed at financial institutions for passage. Here’s the description of the changes it will make, if passed:
The Bill seeks to (1) apply statutory customer due diligence (“CDD”) and record-keeping requirements to solicitors, accountants, real estate agents, and trust or company service providers (“TCSPs”) when these businesses and professions engage in specified transactions; and (2) introduce a licensing regime for TCSPs to require them to apply for a licence from the Registrar of Companies and satisfy a “fit-and-proper” test before they can provide trust or company services as a business in Hong Kong.
The Government has also taken this opportunity to propose certain improvements to the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (Cap. 615) (“AMLO”) to bring it up to date in line with the latest Financial Action Task Force (“FATF”) requirements and to facilitate compliance by regulatees.
The improvement changes, which are more relevant to the securities sector, include –
(a) relaxing the threshold of defining beneficial ownership from the current “not less than 10%” to “more than 25%”, having regard to the prevailing FATF standard and international practice;
(b) introducing flexibility to measures permitted to be taken for verifying a customer’s identity, in the light of technological development in the methods used by financial institutions for obtaining information relating to customers;
(c) removing a sunset clause in the AMLO so that financial institutions will have the flexibility to rely on solicitors, accountants, TCSP licensees as well as other financial institutions (including a foreign financial institution in the same parent group) as intermediaries to carry out CDD measures.
HK SFC Notice
HK SFC Circular
Anti-Money Laundering and Counter-Terrorism Financing (Financial Institutions) (Amendment) Bill 2017