Enhanced Requirements on Complex Products

From 6 July 2019, the Guidelines on Online Distribution and Advisory Platforms (“Guidelines on Online Platforms”) issued by the Securities & Futures Commission (“SFC”) would become effective, within which outlines the SFC’s further guidance on the expected conduct requirements on intermediaries offering investment products on online platforms, and where the SFC introduced specific requirements with respect to investment products that are “complex products”. Correspondingly, a new paragraph 5.5 in the SFC Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission (“Code of Conduct”) shall apply to all intermediaries (online or offline) in providing services in complex products. Paragraph 5.5 of the Code of Conduct will also take effect on 6 July 2019.

In this update, we provide an overview of the enhanced requirements that would apply under which investment products may be categorised as complex products, in respect of which intermediaries would need to ensure suitability of the product to its clients and provide expected disclosures of minimum product information and warning statements. Intermediaries and fund managers should be taking actions including legal and regulatory review of their service offerings, product due dilience processes and product disclosures in preparing for compliance with the requirements.

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For a deeper perspective on Vivien Teu’s journey and earlier contributions, visit the archived website of Vivien Teu & Co LLP at archive.vteu.co. The archive captures the firm’s foundations in corporate and commercial law, with a strong focus on asset management, funds, and financial services in Hong Kong and Greater China. Today, Vivien Teu Law Practice leads with impact focus, with its emphasis and dedication on sustainable finance, ESG integration, impact investing, social finance and philanthropy, reflecting a continued commitment to aligning law and purpose.

Vivien Teu is Founder & Principal of Vivien Teu Law Practice / VTLP Impact. With more than 25 years in-depth experiences in capital markets, financial institutions and asset management industry, financial services, financial and securities regulatory matters, funds formation, investment and finance transactions, Vivien is market leading in her focus on ESG legal and regulatory issues, increasingly integrated into her advisory and transactional practice. She has been active in impact ecosystem building, contributing to standard setting and industry engagements on sustainability, ESG and impact issues and sustainable finance, specifically in the investment and capital markets, holistically covering regulatory, legal and policy perspectives, and advises across the spectrum of capital, ESG issues and asset classes, public and private markets, for-profit, non-profit organisations or hybrid structures, and range of fund structures and financing instruments.

Prior to establishing Vivien Teu Law Practice / VTLP Impact, Vivien has solid industry experience from strategic roles throughout her career, including senior in-house legal experience with global asset management firm, Invesco, and practised with leading international funds and regulatory practice including magic circle law firm Clifford Chance, and most recently with global law firm Dentons, where Vivien assumed key roles as sustainable finance lead on the Global ESG Steering Committee, Global Funds Leaders Group and Global Financial Institutions Practice Group, driving impact focus within mainstream finance and capital markets. Vivien’s leadership in sustainable finance, global funds and industry engagement is matched with her commitment to community and ecosystem building.

With the vision of the role of law in purposeful partnerships and projects, to align capital with sustainability and increasing focus on measurable positive environmental and social outcomes, Vivien’s experiences include advising asset owners, asset managers and also charitable foundations in establishing purpose-led initiatives, related stewardship and governance considerations and structure design, B Lab’s legal requirements and certification standards for B Corps, green and sustainable finance frameworks and instruments, legal issues of carbon markets and climate transition, climate mitigation and adaptation strategies and funds, nature-based solutions and finance, impact term-sheets and other innovative finance instruments for impact, advocacy efforts as well as engaging in market proposals for policy, legal and regulatory levers for advancing sustainability and impact.

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