Hong Kong issues guidance to futures brokers on compliance and control issues
On June 22, the Hong Kong Securities and Futures Commission issued a circular to futures brokers on compliance and control issues. While primarily targeted at retail futures brokers, the circular set out key areas of regulatory concern and standards of conduct expected for futures brokers. The circular set out guidance on the criteria for deciding whether a customer is "established" under the rules of Hong Kong Futures Exchange, which allows that customer to trade futures without depositing sufficient upfront margin. The circular also set out the SFC's expectations regarding the collection of margin from clients, margin call documentation, setting-off arrangements, segregation of accounts, and policies and procedures needed when client money is held overseas.
