SFC Introduces Uniform Annual Submission System

In a further effort to streamline the compliance regime and to reduce costs to the industry, the Securities and Futures Commission ("SFC") has today gazetted amendments to the Leveraged Foreign Exchange Trading (Annual Returns) Rules and the Securities and Futures Commission (Annual Returns) Rules. The amendments to the two pieces of subsidiary legislation, which enable the SFC to accept annual fees and annual returns in bulk, would simplify the annual submission procedures for registered or licensed persons.

Currently, registered securities, futures or licensed leveraged foreign exchange intermediaries are required to pay an annual fee and to submit an annual return to the SFC on the anniversary of their registrations or licences. This requirement may pose an administrative burden to firms, especially those with a large number of accredited staff, as slip-ups or delays inevitably occur, resulting in unnecessary breaches. The present arrangements also have significant resource implications for both the industry and the SFC as its current practice is to issue registered/licensed intermediaries with reminder notices of the due date for submission of annual fees/returns and to acknowledge receipt of annual fees individually.

With a view to alleviating these problems, the SFC has established an optional arrangement to enable firms to adopt a uniform anniversary date for all registrants/licencees carried by them and to aggregate the annual fees payable into one payment and to submit annual returns in bulk under a simplified annual submission system. The introduction of this "common anniversary date" programme culminates a year-long effort which included a successful trial run involving 21 pilot scheme participants. Initiated in the second-half of 1995, the pilot scheme has successfully completed one annual operating cycle and has been well received by all 21 participating financial houses.

On the basis of the positive response from the pilot scheme participants, the SFC has decided to extend this programme, on an optional basis, to all registered/licensed firms, including licensed leveraged foreign exchange traders. In preparation for this across-the-board extension, the necessary technical arrangements, including the above amendments, have been put in place. Invitations to participate in the programme will be issued to all registered/licensed firms (excluding the pilot scheme participants) today and it is anticipated that this extension programme will commence in late first quarter or early second quarter of this year.

In ensuring a smooth implementation of the programme, the SFC has also planned to hold a series of seminars (in both Cantonese and English) to familiarise interested participants with technical aspects of the programme. Scheduled to take place in mid-February, the seminars will provide an opportunity for participants to obtain clarification in respect of specific queries on the new optional arrangement.

For further information, please contact Bill Weeks or Chan Chi Keung at 2840-9287.