Hong Kong’s Securities and Futures Commission (SFC) has urged fund managers to look after their clients’ interests amid the uncertain market conditions caused by the coronavirus (Covid-19) pandemic.
The regulator will increase its monitoring of SFC-authorised funds in the present scenario.
SFC also wants early warning of material issues impacting the market participants.
The watchdog issued two circulars. In one of them, it asked managers, trustees and custodians of SFC-authorised funds to treat investors in a fair manner and ensure effective fund liquidity management.
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In another circular, the regulator urged intermediaries to guarantee suitability during a solicitation or recommendation.
Intermediaries will now have to conduct due diligence with regard to the liquidity and credit quality of an investment offering and by considering a client’s existing circumstances.
They also have to offer investment product-related information timely to clients.
The regulator is keeping a watch on the operational and financial resilience of industry players.
It will offer additional guidance when required.
SFC CEO Ashley Alder said: “Under current market conditions, industry participants should exercise due care when recommending products which may be highly volatile or less liquid.
“This is a period of unprecedented volatility across asset classes and the SFC remains laser focused on ensuring Hong Kong markets stay open and continue to function in a fair and orderly manner.”