The Securities and Futures Commission (SFC) has issued a circular summarizing its recent observations of licensed corporations’ practices in offering and promoting SFC-authorized funds. The circular highlights concerns regarding distributors offering additional returns or incentives that divert clients’ focus from considering the risks and features of the underlying funds. It emphasizes the legal and regulatory requirements that distributors must meet. The circular also addresses issues such as guaranteed returns, lock-up periods, dealing frequency, and other marketing practices. The SFC reminds intermediaries to comply with the Securities and Futures Ordinance and the Code of Conduct, ensuring fair treatment of clients and avoiding misleading or deceptive information. The SFC will continue to monitor market practices and may take regulatory action or provide further guidance as necessary.
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