SFC to upgrade industry practitioners’ competency standards

The Securities and Futures Commission (SFC) today released consultation conclusions on proposals (Note 1) to update its entry requirements for licence applicants (Note 2) and its ongoing competency standards for corporations and individual practitioners (Note 3).

The industry generally welcomed the proposals which included raising the minimum academic qualification requirements for individuals, broadening the scope of recognised academic qualifications, clarifying the management experience requirements for responsible officers (ROs) and enhancing the competence requirements for individuals advising on matters in relation to the Codes on Takeovers (Note 4).

After considering the responses to the consultation, the SFC agreed to recognise post-graduate diplomas and certificates in designated fields (Note 5) and also clarified the management experience required of an RO applicant and the corporate finance experience of those who intend to advise on matters in relation to the Codes on Takeovers. The SFC will also include environmental, social and governance (ESG) as a relevant topic for continuous professional training purposes.

“Raising the professional standards of our industry practitioners is crucial to maintain quality markets, particularly in view of the rapidly evolving financial landscape,” said Mr Ashley Alder, the SFC’s Chief Executive Officer. “We are pleased that the industry shares this vision and overwhelmingly supports our proposals.”

The revised Guidelines on Competence, Guidelines on Continuous Professional Training and Fit and Proper Guidelines will be gazetted on 25 June 2021 and become effective on 1 January 2022.

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Notes:

1. On 11 December 2020, the SFC launched a two-month Consultation on Proposed Enhancements to the Competency Framework for Intermediaries and Individual Practitioners. The SFC received 31 written submissions from industry and professional associations, professional firms, licensed corporations, registered institutions and other stakeholders.
2. Including applicants to be an executive officer (EO) under section 71C of the Banking Ordinance and a relevant individual (ReI) whose name is entered in the register maintained by the Hong Kong Monetary Authority under section 20 of the Banking Ordinance.
3. Individual practitioners include ROs, licensed representatives, EOs and ReIs.
4. “Codes on Takeovers” refers to the Codes on Takeovers and Mergers and Share Buy-backs.
5. See paragraphs 4.2.1.2 and 4.3.1.2 of the revised Guidelines on Competence set out in Appendix B to the consultation conclusions for details.