Hong Kong’s investment watchdog suggests curbs on robot advisers and online trading platforms
Robot-driven and online financial advice needs greater transparency, says new SFC guideline
Online share trading platforms and financial firms using so-called “robo advisers” instead of human beings are facing more curbs from Hong Kong’s Securities and Futures Commission (SFC), according to a revamped guideline document issued on Wednesday night.
It is hoped the clarifications offered within Guidelines on Online Distribution and Advisory Platforms, “will facilitate the growth of online platforms, giving investors greater choice of products and advice”, said Ashley Alder, the SFC’s chief executive.
It is the result of a consultation carried out in August last year, and the measures should be implemented next year, he added.
The main crux of the recommendations involve demands for better transparency and the implementation of more restrictions, in an effort to better protect the interest of retail investors.
“The guidelines represent a balanced regulatory approach,” Alder said.
“They allow more flexibility for investors to manage their investments online, whilst providing them with additional protection in relation to complex products whose features and risks retail investors may have difficulty fully understanding.”
A number of respondents also highlighted in August that some technology tools that are not client-facing, should not be included under the definition of “robo-adviser”, which the commission has accepted, and has asked that their definition be made clearer.