Date of next meeting and items for discussion
Mr CHAN Chun-ying considered that the Panel should discuss the development of Guangdong-Hong Kong-Macao Bay Area (“the Bay Area”) (i.e. item 8 of the Panel’s list of outstanding items for discussion) as soon as possible. The Chairman said that the Panel on Commerce and Industry, the Panel on Economic Development, the Panel on Financial Affairs, and the Panel on Information Technology and Broadcasting conducted a join-Panel visit to the Bay Area in late April 2018 and would hold a joint-Panel meeting to discuss the development in the Bay Area. He would discuss with the Chairmen of the other three Panels to explore holding the joint-Panel meeting in July 2018.
Annual briefing on the work of the Financial Reporting Council
Publicity work of the Financial Reporting Council
Mr CHAN Chun-ying invited FRC to elaborate on the work of its Corporate Communications Committee, including whether it would proof-read papers submitted by FRC to the Legislative Council (“LegCo”). Mr WONG Ting-kwong remarked that many members of the public were still unaware of the work of FRC though it had been established for 10 years. He enquired whether FRC would step up publicity to promote its roles and functions.
CEO/FRC advised that one staff member was responsible for FRC’s corporate communication, the duties of whom included revamping and updating FRC’s website, preparing its annual report, handling media enquiries and preparing press announcements for completed investigations. He added that the staff would take various steps to enhance the publicity work of FRC
Briefing on the work of Hong Kong Monetary Authority
Development of financial technologies
Mr CHAN Chun-ying pointed out that while the “Banking Made Easy” (“BME”) initiative launched by HKMA and WeBank (an Internet bank in the Mainland) relied on the use of big data and facial identification to handle certain banking services, the underlying big data collection ecosystem of Hong Kong was significantly different from that of the Mainland. He was concerned how BME could achieve its objectives. Mr Christopher CHEUNG raised similar concerns.
CE/HKMA said that under BME initiative, banks could use new technologies (e.g. big data and facial recognition) in various operations including remote onboarding. DCE(B)/HKMA added that while there were stringent requirements under the Personal Data (Privacy) Ordinance (Cap. 486) on the use of personal data, banks could still use the data provided by their customers (e.g. income, expenses, debts and credit card spending patterns) to conduct relevant analyses in order to enhance customers’ experience. The banking industry generally welcomed BME.
Mr CHAN Chun-ying enquired about HKMA’s measures to attract participants of its Fintech Career Accelerator Scheme (“FCAS 2.0”) to stay in Hong Kong and develop their careers. CE/HKMA advised that FCAS 2.0 provided training and internship opportunities for participants to acquire more practical experience. As banks in Hong Kong had been actively launching financial technologies (“Fintech”) products and services, there had been more Fintech-related jobs in the market. He believed that Hong Kong had its competitive edge to attract and retain the talents.
In response to Mr CHAN Chun-ying’s enquiry about publicity of and investor education for the Faster Payment System (“FPS”) which would be launched in September 2018, DCE(D)/HKMA advised that both HKMA and the banking industry would be involved in the publicity work. HKMA would take the lead in launching a publicity campaign to introduce the key features and benefits of FPS to the public, while individual banks could promote their own FPS-related products and services.
Proposed amendments to the Securities and Futures (Professional Investor) Rules
Mr CHAN Chun-ying expressed support for the proposals. He noted that SFC had granted around 40 modifications to improve operational efficiency of the PI Rules on request by intermediaries and sought information on the businesses of such intermediaries concerned. He enquired about the details of enquiries intermediaries were expected to make in deciding an individual’s share of a portfolio held in a joint account with non-associates when determining whether the individual met the threshold as a professional investor. Noting that SFC conducted a soft consultation from December 2015 to June 2016, he asked if SFC had further liaised and discussed with market participants in finalizing the present proposals.
SD/SFC advised that the modifications had been made mainly upon requests from banks and securities firms. As regards consultation on the proposed amendments to the PI Rules, he said that after the soft consultation, SFC had issued a public consultation paper on the proposed amendments to the PI Rules on 1 March 2017 to gauge views from market participants and interested parties. The Department of Justice also helped vetting the proposed amendments. On the actions intermediaries should take in ascertaining whether an investor met the monetary thresholds as a professional investor under the PI Rules, he said that according to the Code of Conduct for Persons Licensed by or Registered with SFC (“Code of Conduct”), a licensed or registered person should take all reasonable steps to establish a client’s financial situation. Intermediaries could apply the reasonable steps as appropriate including making enquiries or requiring a client to fill in a questionnaire regarding his financial situation, etc., to determine an individual’s share of a portfolio held in a joint account with non-associates when determining whether the individual could meet the threshold as a professional investor.