The Hong Kong Professional Investor Regime

June 28, 2016

Similar to the situation in many other jurisdictions, fund managers, banks and other market participants in Hong Kong were, until recently, not required to apply the same regulations to high net worth, corporate or institutional investors as were applied to retail investors. Licensed intermediaries in Hong Kong were exempt from applying various regulatory requirements under the Hong Kong Securities and Futures Commission’s Code of Conduct (Code of Conduct) when dealing with professional investors (PIs). However, with effect from 25 March 2016, the following changes to the PI regime in Hong Kong are now in place:

  • There are now three distinct categories of PIs – Institutional PIs, Corporate PIs and Individual PIs – instead of the previous, informal two-category PI classification;
  • Most (but not all) of the exemptions previously available to licensed intermediaries when dealing with Individual PIs and certain Corporate PIs have been removed; and
  • An assessment of Corporate PIs has been introduced to determine whether they can be treated in the same way as Institutional PIs in terms of the exemptions that the licensed intermediary can apply to them.

Read "The Hong Kong Professional Investor Regime."