Most Read Contributor in Hong Kong, September 2016
Keywords: Securities and Futures Commission,
SFC, suitability requirement, contracts,
The Securities and Futures Commission (the "SFC")
mandated the incorporation of the Suitability Requirement into
client agreements as a contractual term. Coupled with the
requirement not to include clauses in client agreements that are
inconsistent with the Code of Conduct or which mis-describe the
actual services provided to clients, the SFC intends the new
requirements to give aggrieved investors a contractual right to
claim damages and to preclude use of disclaimers. Whilst the new
requirements will come into effect in June 2017, the SFC expects
all financial intermediaries subject to the requirements to start
reviewing and revising their client agreements immediately to
ensure timely completion of the exercise, and take necessary steps
to revise or re-execute their client agreements with existing
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This article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
intended to provide legal advice. Readers should seek specific
legal advice before taking any action with respect to the matters
discussed herein. Please also read the JSM legal publications
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