Hong Kong: COVID-19 Related Circulars Or Guidance (Non-Exhaustive) Published By Financial Services Regulators Of Hong Kong (Last Updated: 2 August 2021)

Securities and Futures Commission (SFC) Circulars/Guidelines

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The SFC published a Circular on 19 July 2021 regarding further updates to the Exemption Scheme. The further updates are made in light of the adjustments to the quarantine requirements for vaccinated persons arriving in Hong Kong announced by the HKSAR Government. The key updates include shortening the period of itinerary and point-to-point transportation requirements for inbound travellers (who have stayed in high or medium risk places specified in Group B or Group C under Cap. 599H or Taiwan, China during the 14 days prior to their arrival in Hong Kong and who possess a positive result of a recognised serology antibody test) to the first seven days instead of the entire 14-day medical surveillance period. The Department of Health and Food and Health Bureau has also updated their "Guidelines for vehicles providing point-to-point transportation arrangements for exempted persons (air crew, sea crew and others)". 

Accordingly, the SFC has adjusted their requirements for the submission of attestation forms under the Exemption Scheme. Sponsored licensed corporations should submit a signed attestation form:

a. for a returning executive, on his or her third and seventh days in Hong Kong;

b. for a visiting executive,

i. on the last day of his or her trip if he or she stays in Hong Kong for less than three days; or

ii. on his or her third day in Hong Kong, and on the seventh day in Hong Kong or the last day of his or her trip, whichever is earlier, if he or she stays in Hong Kong for more than three days.

Please refer to Appendix II to the Circular for the updated attestation form.

The antibody testing and COVID-19 testing (post-arrival test) requirements of the Exemption Scheme are also updated as follows:

a. the list of recognised laboratories and criteria have been updated to align with the Government's announcements;

b. the specification that specimens must be collected for an antibody test on the day of arrival or the following day has been removed; and

c. the post-arrival test on the seventh day will be advanced to the fifth day in Hong Kong.

Please refer to Appendix I to the Circular for the revisions to the exemption conditions and requirements.

The Circular should be read in conjunction with the SFC's earlier Circular on Exemption for senior executives of licensed corporations issued on 28 May 2021 (Exemption Scheme) and Updates to the Exemption Scheme issued on 21 June 2021.

Please see the SFC's circulars dated:

• 21 June 2021 (covered in item 2 below) here
• 28 May 2021 (covered in item 4 below) here 

See Appendix I - Exemption Scheme Application Form (updated as of 19 July 2021) here.

See Appendix II - Exemption Scheme Attestation Form (updated as of 19 July 2021) here.

See Appendix III - Guidelines for vehicles providing point-to-point transportation arrangements for exempted persons (air crew, sea crew and others) here. 

See Appendix IV - Point to note for designated activities during the designated period here.

The SFC published a Circular on 21 June 2021 regarding the antibody tests and other updates to the Exemption Scheme. This Circular should be read in conjunction with the SFC's earlier Circular on the Exemption Scheme dated 28 May 2021.

1. Antibody tests 

The HKSAR Government has decided that:

(a) antibody tests in Hong Kong should be applied to the Exemption Scheme for all inbound travellers who have stayed in high or medium risk places specified in Group B or Group C2 under Cap. 599H or Taiwan, China during the 14 days prior to their arrival in Hong Kong; and

(b) persons who have stayed in extremely or very high risk places specified in Group A1 or Group A2 under Cap. 599H during the 21 days prior to their arrival in Hong Kong would not be qualified to apply under the Exemption Scheme.

2. Key points concerning the antibody tests and other updates to the Exemption Scheme: 

(a) Returning executives who have stayed in high or medium risk places specified in Group B or Group C under Cap. 599H or Taiwan, China during the 14 days prior to their arrival in Hong Kong

(i) Returning executives must possess a positive result from a pre-departure IgG or total antibody test against spike protein or surrogate neutralizing antibody done at a HOKLAS3-accredited medical laboratory with virology-serology tests within the scope of accreditation. Such test must be done on platforms by Abbott or Roche (or other platforms subject to review), following the standard as specified by the respective manufacturer and with the specimen collected within three months prior to the scheduled arrival time of the flight to Hong Kong. Applications can only be submitted together with a positive antibody test result. Please refer to Appendix III for a list of accredited laboratories carrying out antibody tests.

(ii) Upon returning to Hong Kong, exempted returning executives must be subject to self-isolation at a designated quarantine hotel (DQH) or at home for a reduced isolation period of 7 days upon arrival except for permitted activities as set out in the itinerary endorsed by the sponsoring licensed corporation and submitted to the SFC. Please refer to Appendix I (updated as of 21 June 2021) for the corresponding conditions or requirements.

(b) Visiting executives who have stayed in high or medium risk places specified in Group B or Group C under Cap. 599H or Taiwan, China during the 14 days prior to their arrival in Hong Kong

(iii) Visiting executives must have made an appointment with a HOKLAS-accredited medical laboratory with virology – serology tests within the scope of accreditation for an IgG or total antibody test against spike protein or surrogate neutralizing antibody done on platforms by Abbott or Roche (or other platforms subject to review), following the standard as specified by the respective manufacturer and with the specimen collected on the day of arrival at Hong Kong or the following day. The visiting executive must wait for the results at a DQH.

(iv) The exempted visiting executive must be subject to self-isolation only at a DQH for:

(A) 14 days upon arrival, or until departure from Hong Kong, if his or her antibody test result is negative; or

(B) 7 days upon arrival, if his or her antibody test result is positive, except for permitted activities as set out in the itinerary endorsed by the sponsoring licensed corporation and submitted to the SFC.

(c) Updates to application procedures

(v) In light of the updates to the Exemption Scheme, applications should be made by completing the Application form (updated as of 21 June 2021) at Appendix I enclosed with this circular and submitting it to the SFC by email at etravel@sfc.hk at least 10 working days prior to:

(A) the expected date of departure from Hong Kong for proposed exempted executives travelling from and returning to Hong Kong; or

(B) the expected date of arrival in Hong Kong for proposed exempted executives visiting Hong Kong. 

(vi) The attestation form is also updated at Appendix II to this circular.

(vii) Exempted executives should bring with him or her a print-out copy of the authorisation letter, together with his or her proof of pre-departure positive antibody test result (applicable for returning executives only) and pre-departure negative COVID-19 test result, and COVID-19 vaccination record.

Please see the SFC's circulars dated 28 May 2021 here.

The above circular has been covered in item 4 below.

Appendix I - Exemption Scheme Application Form (updated as of 21 June 2021) can be found here.

Appendix II - Exemption Scheme Attestation Form (updated as of 21 June 2021) can be found here.

Appendix III - Exemption Scheme - List of accredited laboratories for COVID-19 antibody tests can be found here.

The SFC published a Circular identifying vaccination as key element of operational risk management and strongly encouraging licensed corporations to consider vaccination as a critical part of operational risk management to ensure their business operations and client interests are not unduly affected by COVID-19. The SFC urges licensed corporations to:

(a) review their business continuity plan (BCP) and identify functions which are critical to their business operations and client interests and encourage staff performing such critical functions, for example client-facing and critical support staff, to get vaccinated. Licensed corporations are also reminded to maintain proper documentation of any changes to their BCPs; and

(b) consider suitable arrangements for critical staff who have not yet been vaccinated or are unfit for vaccination due to medical conditions to undergo periodic COVID-19 testing.

The goal is to keep driving down infection rates, interrupt community transmission and uplift COVID-related restrictions in order to return to a high level of normalcy. 

The SFC published a Circular informing licensed corporations that the Government has designated certain categories of persons in the financial services sector to be exempted from the compulsory quarantine arrangements in Hong Kong under Cap. 599C and Cap. 599E ("Exemption Scheme"). Senior executives of licensed corporations or their overseas affiliates who are fully vaccinated and meet the eligibility criteria may apply for exemption from the compulsory quarantine arrangements when they return or travel to Hong Kong. 

In short, this is not an automatic exemption. Applications must be made in advance and there are limited quotas. The SFC has sole discretion whether to approve or refuse an application. 

Who are eligible to apply for exemption

1. senior executives travelling from and returning to Hong Kong, namely, senior executives of a licensed corporation with global or regional roles who are returning to Hong Kong after travelling to foreign places primarily for the purposes of managing the group entities for which they have responsibility ("returning executives"); and

2. senior executives visiting Hong Kong, namely, global or regional heads or senior executives of financial institutions that a licensed corporation is affiliated with, who are travelling to Hong Kong primarily for the purposes of managing the licensed corporation ("visiting executives").

Limited quota

3. The quotas are limited to two entries for returning executives and two entries for visiting executives, respectively, per calendar month per licensed corporation.

Application procedures

4. Applications for exemption should be made by the sponsoring licensed corporation of the returning executives or the visiting executives, by completing the prescribed application form (see Appendix I to the Circular) and providing the requisite supporting documents set out in the Circular, including an itinerary of the proposed exempted executive for the entire duration of the trip (for a visiting executive) or throughout the entire medical surveillance period (for a returning executive) in Hong Kong, with information about his or her arrival, departure, accommodation or designated quarantine hotel, organisations and venues to be visited with the dates and times of the visits. Please also follow the application procedures set out in the Circular. 

Requirements on exempted executives and their sponsoring licensed corporations

5. Each exempted executive is required to fully comply with the specific conditions for exemptions set out in the authorisation letter issued by the FSTB and is only allowed to leave his or her designated quarantine hotel or accommodation arranged by the sponsoring licensed corporation for approved activities set out in the itinerary. A set of sample conditions is set out in the Notes appended to the application form for reference. These conditions include the completion of a COVID-19 vaccination course; pre-departure, on arrival and post-arrival COVID-19 tests; point-to-point transportation; self-isolation and medical surveillance.

6.Each sponsoring licensed corporation is required to:

(a) keep an up-to-date record of the itinerary of each exempted executive for the entire duration of the trip (for a visiting executive) or throughout the entire medical surveillance period (for a returning executive) in Hong Kong. The itinerary maintained by the sponsoring licensed corporation should also include information about the contact details of the persons who had met or would meet with the exempted executive in Hong Kong. Any changes to the itinerary should be submitted to the SFC upon arrival in Hong Kong and at the time when the sponsoring licensed corporation submits the attestation form as required under item(d) below;

(b) ensure compliance with the guidelines for vehicles providing point-to-point transportation (see Appendix III to the Circular);

(c) ensure that, for exempted persons in self-isolation at an accommodation arranged by the sponsoring licensed corporation, the Department of Health's infection control guidelines are adhered to;

(d) submit to the SFC an attestation form (in the form prescribed in Appendix II to the Circular) signed by a responsible officer or the manager-in-charge of compliance function of the sponsoring licensed corporation, every three working days or at the half-way point of the trip, whichever is earlier, and on the last day of the trip (for a visiting executive) or the medical surveillance period (for a returning executive); and

(e) report to the SFC as soon as possible if an exempted executive is confirmed or suspected to be infected with COVID-19 during his or her trip in Hong Kong and within 14 days after departing Hong Kong (for a visiting executive) or during the medical surveillance period (for a returning executive).

Consequence of violation

Any contravention with the exemption conditions would result in removal of the exemption status. In addition, if an exempted person who is subject to self-isolation in a designated quarantine hotel room is found to have breached the self-isolation requirement, the concerned exempted person's exemption status will be removed immediately and he / she will be sent to the HKSAR Government's Quarantine Centre for compulsory quarantine for 21 days. An exempted person who fails to observe any of the conditions commits an offence and, on conviction, will be liable to a fine of HK$5,000 and to imprisonment for 6 months.

The sponsoring licensed corporations are responsible for ensuring the accuracy and authenticity of the information submitted as part of the Exemption Scheme, and such responsibility ultimately rests with the senior management of each sponsoring licensed corporation.

Appendix I – Exemption Scheme Application Form can be found here.

Appendix II – Exemption Scheme Attestation Form can be found here.

Appendix III – Guideline for vehicles providing point-to-point transportation can be found here.

The SFC published a circular informing licensed corporations (LCs) that the SFC will defer the introduction of initial margin (IM) requirements for non-centrally cleared over-the-counter (OTC) derivative transactions by one year to provide operational relief in light of the COVID-19 outbreak. The IM requirements for LCs which are contracting parties to non-centrally cleared OTC derivative transactions entered into with a covered entity were originally to be phased in starting from 1 September 2020.

In light of the Basel Committee on Banking Supervision and the International Organization of Securities Commissions' announcement of the one-year extension of the deadlines for completing the final implementation phases of the IM requirements for non-centrally cleared OTC derivatives, the SFC has accordingly extended the phase-in schedule for the IM requirements by one year, summarized as follows:

• From 1 September 2021 to 31 August 2022, the exchange of IM by an LC is required in a one-year period where both the LC and the covered entity have an average aggregate notional amount (AANA) of non-centrally cleared OTC derivatives exceeding HK$375 billion on a group basis.
• On a permanent basis starting from 1 September 2022 and for each subsequent 12-month period, the exchange of IM by an LC is required in a one-year period where both the LC and the covered entity have an AANA of non-centrally cleared OTC derivatives exceeding HK$60 billion on a group basis.

For avoidance of doubt, the variation margin requirements will still become effective on 1 September 2020. 

The SFC published a circular reminding licensed corporations (LCs) to assess their operational capabilities and implement appropriate measures to manage cybersecurity risks associated with remote office arrangements, in light of the increased use of such arrangements as a result of the COVID-19 outbreak. The SFC set out some examples of controls and procedures LCs may take in relation to various aspects of remote office arrangements:

Remote access to internal network and systems - LCs should consider the below measures (amongst others) to mitigate cybersecurity risks:

• Implement robust virtual private network (VPN) solutions, which provide strong encryption and two or more layers of protection, to protect the integrity of data transmitted between remote users' devices and internal systems;
• Monitor, evaluate and implement security patches or hotfixes released by VPN software providers on a timely basis;
• Require the use of strong passwords and implement two-factor authentication for remote access logins by employees, agents and service providers, in particular when accessing privileged accounts and sensitive data repositories;
• Avoid granting standing or permanent access to external parties and only allow vendors to access specific systems during pre-determined timeframes;
• Implement different levels of remote access, such as by equipping computers and mobile devices supplied by LCs with greater capabilities than employee-owned devices;
• Implement security controls to prevent unauthorised installation of hardware and software on computers and devices provided to staff; and
• Implement robust network segmentation to segregate system servers and databases, based on criticality, to better protect more critical and sensitive data, such as clients' personal data.