US ethics watchdog hails SFC plan
Financial planning body says tougher rules on insurance-linked products will benefit investors
A plan by the Securities and Futures Commission to tighten rules on investment-linked insurance products will bring the city into line with international efforts to prevent mis-selling and promote investor protection, according to an international financial planning expert.
Noel Maye, the chief executive of the Financial Planning Standards Board (FPSB), a US non-profit organisation that sets qualifying examinations and ethical standards for financial planners worldwide, said many Western countries had since 2008 enforced tougher disclosure requirements for salespeople.
"Hong Kong is heading in the right direction in introducing measures to prevent mis-selling of investment and insurance products. It's important for salespeople to clearly explain to investors the risks of the products they are selling as well as the fees involved," Maye said on a trip to Hong Kong, where the FPSB is arranging a meeting this week for financial planners from 14 countries to exchange views.
SFC chairman Carlson Tong Ka-shing said last month the regulator would tighten the rules on investment-linked insurance, products, particularly sales processes.
Such products, which allow investors to choose how their premium will be invested, are currently not regulated by the securities watchdog. Neither are salespeople required to obtain an SFC licence.
Maye said FPSB required all its financial-planner members to follow certain requirements for safeguarding the interest of their customers.