07 November 2017
Hong Kong
Reporter: Jenna Lomax

Hong Kong’s SFC launches prime services review

The Hong Kong Securities and Futures Commission (SFC) is set to conduct a review of prime services relating to equity derivatives activities across the market.

The SFC aims to identify potential conduct issues arising from the practice adopted by prime brokers, to assess the internal controls in place, and to provide guidance on how the risks are managed.

As well as reviewing the front-to-back business processes of prime brokers and the interaction between prime services and related equity derivatives activities, the review will also cover key risks and controls for prime services.

Evaluation of risks and controls will specifically concentrate on risk management, governance and compliance with existing regulations, and will explore areas for future regulatory focus.

Due to the growth of asset management businesses and the hedge fund industry in Hong Kong, prime services have become “a key revenue stream for financial institutions”.

The commission said it would also measure derivative activities of prime brokers against other major financial market regulators and try to lessen common problems the industry is facing.

The SFC said it has engaged an external consultant to assist in conducting the thematic review, of which will be conducted through a combination of industry survey, meetings and on-site inspections.

Findings of the review “would form the basis for the SFC to issue further guidance to the market”.

More news
The latest news from Securities Lending Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
EXCLUSIVE: Sunil Daswani leaves Northern Trust
21 February 2018 | London | Reporter: Jenna Lomax
Sunil Daswani, head of international securities lending at Northern Trust has left the company
Top of hot stocks: TechnipFMC PLC and Match
21 February 2018 | London | Reporter: Jenna Lomax
TechnipFMC PLC, formed by the merger of oil services companies, led the FIS Astec Analytics hot stocks list for EMEA last week
ISLA responds to BMF’s draft circular
20 February 2018 | London | Reporter: Brian Bollen
The International Securities Lending Association (ISLA) has sent a letter to the German Ministry of Finance responding to the BMF’s draft circular released on 25 January 2018 on the subject of a manufactured dividend rule
SBL Network welcomes independent consultant
20 February 2018 | London | Reporter: Jenna Lomax
SBL Network Limited has appointed Charlotte Clout as an independent consultant
Fidessa sees revenue growth across all regions in 2017
20 February 2018 | London | Reporter: Jenna Lomax
Fidessa has reported that its yearly revenue increased by 7 percent for 2017, ending the year with £353.9 million compared to £331.9 million in 2016
Foreign investment in US down
19 February 2018 | Washington DC | Reporter: Brian Bollen
Official figures, released 15 February, by the US Department of the Treasury show a drop in foreign investment in the US in December
Minium, IBM and Promontory release joint white paper
19 February 2018 | London | Reporter: Jenna Lomax
The patchwork of outdated systems most firms use today is not fit for purpose, according to a white paper jointly released by Minium, IBM and Promontory