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Financial and Monetary Affairs
place so problems in systemically important financial institutions may be resolved in a way that protects financial stability, including the continued performance of critical financial services, without exposing taxpayers to loss.
As an FSB member jurisdiction, Hong Kong is committed to implementing these standards and needs legislative reform to achieve this. Following the first stage of public consultation in 2014, the government, in conjunction with the financial regulators, launched a second consultation in January 2015 to seek views on specific aspects of the proposed regime, including further details on the resolution options and powers proposed in the first consultation paper, and the governance arrangements and safeguards. The government released the consultation outcome in October and introduced the Financial Institutions (Resolution) Bill into LegCo in December.
Anti-Money Laundering and Counter Financing of Terrorism
Anti-money laundering and counter financing of terrorism (AML/CFT) was a key focus area for financial regulators that strengthened specialist resources and supervision of financial institutions' AML/CFT programmes. The government and financial regulators play an active role in relevant international standard-setting bodies, such as the Financial Action Task Force, to ensure Hong Kong's AML/CFT regime is in line with those standards and practices.
Enhanced Regulation of SFC-authorised Investment Products
In January, the SFC amended the Code on Unit Trusts and Mutual Funds to give authorised funds greater flexibility in determining the means for making public their offer and redemption prices, NAVs and notices of dealing suspension. The code was amended also to increase the frequency at which prices and NAVS are disseminated.
E-cheques and Regulation of Stored-value Facilities and Retail Payment Systems
With support from the government, an e-Cheque service was launched in December, providing a convenient, safe and environmentally friendly means for bank customers to issue and deposit cheques online.
The Payment Systems and Stored Value Facilities Ordinance took effect on 13 November. Under the ordinance, the HKMA is empowered to implement a licensing system for stored-value facilities, and designate retail payment systems to ensure their safe and robust operations under prudential regulation.
Independent Insurance Authority
The policy objectives of setting up an independent Insurance Authority (IIA) are to modernise the regulatory infrastructure to facilitate the insurance industry's stable development, provide better protection for policyholders, and align with international practice that financial regulators should be financially and operationally independent of the government. The Insurance Companies (Amendment) Ordinance 2015 (IC(A)O) was enacted on 10 July, providing for a legal framework to establish an IIA and a statutory licensing regime for insurance intermediaries to replace the existing self-regulatory system.
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