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SFC to compile code of ethics

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The Securities and Futures Commission (SFC) is planning a ground-breaking code of practice for the territory's US$150 billion fund management industry.

The code - covering issues ranging from personal account dealing to operational issues - will bring together rules and regulations spread over 13 ordinances.

A task force combining SFC specialists and compliance experts is expected to spend the next two months devising the first draft.

It is the first sector of the securities industry to be covered by a comprehensive code and there are no plans yet to extend it to the financial advisory and merchant banking sectors. There is also no equivalent guide to best practices offered by the United States Securities and Exchange Commission or Britain's Investment Management Regulatory Organisation.

The territory's fund management industry has leapt from 46 funds in 1978 to about 1,400 covering all investment classes and the world's major economies.

There are about 200 companies involved in the sector offering services that include discretionary, institutional and retail fund management.

Continued growth is expected from institutional and retail fund managers using the territory as a base for their regional operations, a growing retail market and the prospect of a Mandatory Provident Fund.

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