Friday, November 01, 2019

PWM Regulation Needs Improvement

In Oct 2019, PWMA and KPMG jointly published the Hong Kong Private Wealth Management Report 2019. I want to reproduce certain key contents about regulation from this report below:
  • A key challenge faced by PWM institutions is the large number of circulars issued – some of which cover common areas between the HKMA and SFC – which have created complexity in the interpretation of regulations and difficulties in effectively updating processes and controls to remain compliant.
  • Interviewed PWM executives have observed conflicting approaches between the 'principles-based' regulatory guidelines which infer greater flexibility in interpretation and implementation, and the findings from on-the-ground regulatory examinations which take a more prescriptive approach.
  • Clients most commonly cited 'providing evidence for source of wealth', 'trade by trade disclosure requirements' and 'trade by trade investment suitability requirements' as the biggest pain points in their Hong Kong PWM experience in terms of time and administrative effort.

I share the view that the above issues would place Hong Kong at a disadvantage compared to other key PWM hubs.

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