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Financial and Monetary Affairs
of these two work streams. A third module, to develop the competency of more experienced practitioners responsible for anti-money laundering and counter-terrorist financing compliance, is being developed.
Financial Services Development Council
The Financial Services Development Council is a high-level, cross-sectoral government advisory body that collects industry views to formulate strategic proposals for the development of the industry. It published seven reports in 2017 on these subjects: reinsurance, marine insurance and captive insurance; listed structured products; fintech; distributed ledger technology; aircraft leasing and financing; tax issues regarding offshore private equity fund, and group tax loss relief. The government seeks to implement the council's recommendations where appropriate to further develop the financial services industry, provides resources and fully supports the council's work.
Improving Market Quality and Financial Consumer Education and Protection
The government drives, facilitates and coordinates initiatives to ensure the overarching regulatory framework will enhance protection for investors and promote market development in the face of both global needs and local circumstances.
Regulation of Asset Management
The SFC seeks to ensure Hong Kong's regulatory regime for asset management is in line with international regulatory developments. It issued in November the conclusions to its consultation on proposals to refine asset management regulation and point-of-sale transparency to better address conflicts of interest in the sale of investment products. Enhancements to the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission and the Fund Manager Code of Conduct will take effect in 2018. In December, the SFC launched a public consultation on its proposed amendments to the Code on Unit Trusts and Mutual Funds to update the regulatory regime for SFC-authorised funds and address risks posed by financial innovation and market developments.
Regulation of OTC Derivatives
As part of a broader effort to improve transparency, mitigate systemic risk and prevent market abuse, the SFC issued its conclusion to a consultation on a proposed regulatory capital regime for licensed firms engaged in OTC derivatives activities and other changes to the Securities and Futures (Financial Resources) Rules. The proposals, subject to further consultation, will be implemented to reflect recent market development and enhance Hong Kong's position as a risk management hub.
To strengthen the management of conduct and financial risks in transactions and business dealings with related parties, a separate consultation was launched in December, proposing to refine the scope of regulated activities and provide further clarity about the OTC derivatives licensing regime.
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