Hong Kong's Securities and Futures Commission has begun a three month consultation into new guidelines on online distribution and advisory platforms.
The Securities and Futures Commission (SFC) has initiated a three-month consultation on proposed Guidelines on «Online Distribution and Advisory Platforms.»
The suggested guidelines will apply to all SFC-licensed or registered persons when conducting their regulated activities in providing order execution, distribution and advisory services in respect of investment products via online platforms.
Robo-Advice «Guidance»
The SFC says the aim is to provide tailored guidance to the industry on the design and operation of online platforms, as well as clarify how the suitability requirement would operate in the online environment.
The proposed guidelines also contain specific guidance on the provision of automated or robo-advice on an online platform.
Products Overly Complex
The proposed guidelines clarify that the posting of factual, fair and balanced materials on online platforms should not in itself trigger the suitability requirement. The suitability requirement will apply where investors can be subject to greater influence and need more protection, such as where robo-advice is provided.
In the proposed guidelines, the suitability requirement will be extended to the sale of complex products on online platforms because retail investors may have difficulty in fully understanding the nature and risks associated with a complex product based only on the information posted on an online platform.
«Investors are increasingly managing their finances and investments online, and we hope the clarification will enable more distribution channels to flourish and give investors greater choice and flexibility without compromising their protection,» said Ashley Alder, the SFC’s Chief Executive Officer.
