Regulator puts fund managers on alert

Business | 27 Mar 2020 2:43 pm

The Securities and Futures Commission reminded  fund managers of the need to look after the interests of clients amid increasing volatility in global markets.

The securities regulator said managers, trustees and custodians of SFC-authorized funds have obligations to properly manage the liquidity of funds and ensure fair treatment of investors.

The SFC has stepped up monitoring of authorized funds and should be given early warning of any material issues affecting them, it said in a circular to the fund industry.

A separate circular reminded intermediaries of their obligation to ensure suitability when they make a solicitation or recommendation, the SFC said. This includes performing due diligence on an investment product’s liquidity and credit quality as well as taking the client’s current circumstances into account.

Intermediaries were also reminded to send notices and other communications about investment products in a timely manner where they hold them directly or indirectly on behalf of their clients.

"Under current market conditions, industry participants should exercise due care when recommending products which may be highly volatile or less liquid," said Ashley Alder, the Chief Executive.

The SFC said it is closely monitoring the operational and financial resilience of industry participants and market infrastructure.

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