Circular to Licensed Corporations on Prudent Risk Management in Providing IPO Subscription Services

The SFC has reminded licensed corporations to manage risks carefully when providing IPO subscription services and financing to clients with the launch of HKEX’s Fast Interface for New Issuance (FINI). Although the pre-funding mechanism for public offer tranches will be modified under FINI, LCs must still exercise prudent risk management and controls. They should have measures in place to prevent improper risk-taking activities, such as accepting large subscription orders without sufficient deposits or providing excessive IPO financing. These measures should cover areas like credit risk management, liquidity risk management, and financial risk management. Senior management of LCs have the primary responsibility to ensure proper risk management for their firms. If there are any queries, LCs should contact their case officer.



Learn with us in small steps

Find out more about us