Hong Kong SFC Finds Multiple Asset Management Company Violations

On October 10, the SFC issued an official circular stating that in the course of supervising licensed corporations engaged in the management of private funds and delegated accounts, a number of deficiencies and substandard conduct were found. Many of the cases involved serious misconduct, posing a significant threat to investors' interests and undermining public confidence in the integrity of the Hong Kong market and Hong Kong's position as an international asset management center.

The cases set out in the Circular cover a wide range of irregularities, ranging from conflict of interest, risk management and investing within authorizations, provision of information to investors to inadequate valuation methodologies, and set out the existing responsibilities applicable to asset management companies in such circumstances. The SFC pointed out that asset managers should review the concerns contained in the Circular and take appropriate measures to rectify any deficiencies identified.