SFC Circular on Responsible Officers and Substantial Shareholders
The Securities and Futures Commission (SFC) has issued a circular to licensed corporations on responsible officers and substantial shareholders (the Circular), reminding licensed corporations that it is not acceptable to hire responsible officers in name only, where the relevant persons do not in fact supervise the licensed corporation’s business. The Circular also informs prospective acquirers of licensed corporations that the assessment and vetting process for a new substantial shareholder applicant is equally as stringent as that for a new licensed corporation application, particularly where the licensed corporation in question appears to be dormant. This reflects the SFC’s concerns about an increasing trend of licensed corporations being acquired or set up by persons without prior experience in the securities industry and reports of large premiums being paid for inactive licensed corporations and of the hiring of responsible officers who do not participate in the licensed corporation’s management or operations. Read more…
