CPL Seminar - 20190725

   

     The seminar was kicked off by Mr. Chim Pui Chong who is a veteran securities brokers in Hong Kong and has once been named “one of the best market-makers” in Hong Kong. With over half a century of market experience, he has witnessed the rise and fall of local brokerage firms, the fierce competition from foreign and mainland Chinese brokers, the tightening of regulations and the revolution caused by innovation and technological advances. Given the structural changes that had taken place in the market, Mr. Chim believed that the traditional commission-based brokerage business may shrink while other activities such as margin financing and asset management will grow from strength to strength. He advised that brokers should divert more resources into the financial advisory and wealth management services.

     The second part of the seminar was devoted to the newly introduced fund structure, namely, Open-ended Fund Companies (OFC) which has received poor reaction from the market since its inception in July 2018. The speaker, Mr. Charles Kwun, believed that the authority is still in the process of clarifying certain regulations and streamlining the relevant application and approval process, in addition to its implications amongst taxation and company regulators. With the recent promulgation of Cayman Economic Substance Law which increases the cost of setting up and maintaining offshore Cayman funds, Mr. Kwun is optimistic about Hong Kong becoming a fund management hub in the world. Mr. Kwun also pointed out several issues that remain outstanding: (a) the strict requirements on large-size custodian may squeeze out smaller funds; (b) there may be insufficient supply of Type 9 licensees; and (c) the tax implications comparable to offshore funds have to be further clarified. As a final note, Mr. Kwun stressed that from other countries’ experience, it may take some more months to align the regulations with market practices, while at the same time to give sufficient comfort to the stakeholders to be receptive to the new structure. (* Mr. Charles Kwun has over 20 years experience in providing fund administration services for various types of funds in Asia. He is now Managing Director of Sino Fund Services Limited.)