ENG-2014 — Page 103

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Financial and Monetary Affairs

Enhanced Regulation of SFC-authorised Investment Products and Policyholders Protection Measures

In April, the SFC published a circular containing guidance on the internal product approval process applicable to providers of SFC-authorised unit trusts and mutual funds, investment- linked assurance schemes (ILAS) and unlisted structured investment products. The guidance, which came into effect on 1 May, covers the entire chain from inception of the product to post- sale, explains the requirements for a robust internal product approval process and reminds product providers about their duty to consider investors' interests as part of the product design. process.

To enhance the proper standards of conduct and promote sound and prudent business practices amongst insurers, the IA issued a guidance note on underwriting ILAS business on 30 July. The note made reference to the 'fair treatment of customers' principle promulgated by the International Association of Insurance Supervisors, and sets out comprehensive requirements, including the design of ILAS products, sales processes, remuneration of intermediaries and post-sale control requirements. The note will take effect from 1 January 2015.

The IA continues to work closely with the Hong Kong Federation of Insurers, the HKMA and the SFC to enhance the regulation of ILAS. The Investor Education Centre was engaged to prepare campaigns to enhance the public's understanding of ILAS products.

Regulatory Regime for Stored-value Facilities and Retail Payment Systems

The government released the consultation conclusions in October. Following the positive response from the market and the public, the government is preparing legislation to establish a regulatory regime for stored value facilities and retail payment systems.

Investor Education Centre

Supported by Hong Kong's four financial regulators and the Education Bureau, the Investor Education Centre was established in 2012 to raise financial literacy in Hong Kong. It seeks to provide comprehensive, credible and impartial financial information to better equip the general public with skills and knowledge to make informed financial decisions and to manage their money wisely.

In 2014, the centre held its inaugural financial literacy forum, with over 150 participants from the government and the finance, education and community sectors and the media. During the year, the centre held 144 community outreach events reaching more than 18,000 people, and there were over 280,000 visitors to its website.

Financial Dispute Resolution Centre

The Financial Dispute Resolution Centre administers independently and impartially a financial dispute resolution scheme to facilitate the resolution of monetary disputes between individual customers and financial institutions in Hong Kong by 'mediation first, arbitration next! To raise the public awareness of its services, the centre launched a series of advertising campaigns and other promotional programmes in 2014, including investor education seminars and an Open.

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The SFC, the HKMA, the Mandatory Provident Fund Schemes Authority, and the Office of the Commissioner of Insurance.

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