Jurisdiction - Hong Kong
Reports and Analysis
Hong Kong – Government Gazette Publishes Amendments to Rules clarifying persons to be Prescribed as Professional Investors.

28 September, 2011


On 9 September 2011, the Hong Kong legislative council published the Securities and Futures (Professional Investor) (Amendment) Rules (Amendments) in the Government Gazette to refine Section 3 of the Rules which deal with persons prescribed as professional investors.


In adopting a principles-based approach, the SFC has clarified that an intermediary may use any method that is appropriate to satisfy itself that an investor meets the relevant assets or portfolio threshold (which will remain unchanged at the current levels) at the "relevant date" to qualify as a professional investor.  This will result in greater reliance by the SFC on a firm's professional judgement to decide the methods by which they can satisfy themselves that their clients have the required assets or portfolio levels at the relevant date.


Specifically, the Amendments qualify the holding of relevant assets or portfolio thresholds of the four types of high net worth individuals set out in Section 3 of the Rules by the "relevant date".  Relevant date is defined as being the date on which the relevant advertisement, invitation or document is issued, or possessed for the purposes of issue, a relevant call is made, a relevant offer is made or the date by or on which a relevant obligation is required to be complied with, as the case may be.


In addition, any investment-holding corporation which is wholly owned by one or more trust corporations, individuals or corporations/partnerships where each of those trust corporations, individuals or corporations/partnerships would qualify as a professional investor under section 3(a), section 3(b) or section 3(c) (as the case may be) of the Rules, will now qualify as a professional investor.


To enable intermediaries to continue with their existing practices if so desired, the SFC will preserve the current methods for establishing whether an investor qualifies as a professional investor under the Rules.


The Amendments will come into operation on 16 December 2011.


A copy of the Amendments can be accessed here.




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