Oversight November 2018 - SFC Consultation Conclusions on Online Distribution and Complex Products


On 28 March 2018, the Securities and Futures Commission (SFC) published its Consultation Conclusions on the Proposed Guidelines on Online Distribution and Advisory Platform (First Consultation Conclusions) and launched a Further Consultation on Offline Requirements Applicable to Complex Products (Further Consultation). The Further Consultation proposed certain amendments to the SFC’s Code of Conduct for Persons Licensed by or Registered with the SFC (Code) in order to align the requirements applicable to the sale of “complex products” in both an online and offline environment. This followed the SFC’s initial consultation in respect of the proposed Guidelines on Online Distribution and Advisory Platforms (Consultation Paper) of 05 May 2017. Please refer to our Oversight of May 2017 for discussion of the consultation paper.

On 04 October 2018, the SFC issued its conclusions to the Further Consultation (Second Consultation Conclusions). The amendments to the Code (Revised Code), which were gazetted on 05 October 2018, will become effective at the same time as the SFC’s Guidelines on Online Distribution and Advisory Platform (Guidelines) on 06 April 2019.

Intermediaries with existing Online Platforms (defined below) have a 12-month transition period to implement changes to the platforms to comply with the new requirements under the Guidelines. The SFC has also published a set of frequently asked questions (FAQ) on the Guidelines to help participants to interpret some of the key requirements under the Guidelines.

The purposes of this Oversight are to provide an overview of the Guidelines and the Revised Code and to highlight the key issues and implications on industry participants.

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This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.