The topics discussed in this monthly newsletter for insurance are as follows: ComplianceOne Insurance Newsletter – November 2025 The topics discussed in this monthly newsletter are as follows: REGULATORY UPDATES IA Issues Circular on Reference Checking Schemes for Licensed Insurance Intermediaries ENFORCEMENT NEWS IA Imposes Restrictive License Conditions on Mighty Divine Insurance Brokers Limited Associated with Prince Group (太子集團) ICAC Secures Jail Sentences for Last Batch of Defendants in $52 Million Dummy Agents Commissions Fraud ICAC Issues Arrest Warrants for Two Individuals Implicated in $3 Million Insurance Commissions Fraud Regulatory News 1. IA Issues Circular on Reference Checking Schemes for Licensed Insurance Intermediaries On 20 November 2025, IA Issues further Circular on the Reference Checking Scheme (the “ Scheme ”) for Licensed Insurance Intermediaries. Addressing the “rolling bad apples” phenomenon “One bad apple spoils the whole barrel” so the old adage goes. In the context of the Scheme, the phenomenon of “rolling bad apples” refer to licensed individuals attempt to evade the consequences of past misconduct by moving principals without proper disclosure. To address the issue of “rolling bad apples”, the Scheme was launched by the Hong Kong Federation of Insurers (“ HKFI ”) by its circular dated 5 July 2025 to be used by its members which are authorized insurers carrying on long-term business from 1 September 2024 onwards. The IA then issued the Circular on 5 July 2024 to endorse and support the Scheme. The Scheme then expanded in Phase 2, jointly launched by the HKFI, the Hong Kong Confederation of Insurance Brokers (“ CIB ”) and Professional Insurance Brokers Association (“ PIBA ”), covers all licensed long-term individual intermediaries to protect policyholders, maintain market confidence, and prevent misconduct from spreading. Effective Date With effect from 1 January 2026 , the Scheme will be expanded to cover all appointment of all individuals licensed intermediaries carrying on long term insurance business. Non-compliance may lead to supervisory scrutiny or disciplinary action by the IA. Scope and Application Applies to appointments of prospective intermediaries (the “ Candidates ”), including: licensed individual insurance agents; technical representatives (agent); or technical representatives (broker) (collective as “ TRs ”); for regulated activities in long-term business . As a Recruiting Principal, conduct reference checks on candidates with past 7 years of relevant experience. Check only the THREE most recent appointments if multiple. Excludes agencies that are authorized institutions under Banking Ordinance (potential integration with banking scheme ongoing). Summary of the Scheme Making a Reference Checking Request (as Recruiting Principal) Before appointing for long term activities, conduct reference checks on THREE most recent appointments within Past 7 years. · Use Annex 1A template to request info from responding principals. · Obtain written consent from candidates via Annex 2A form , authorizing checks, disclosure, and exempting contractual limits. If candidates refuse to provide consent or withdrawn the provided consent, should NOT appoint. For group companies, one entity can conduct checks for reliance, but each remains accountable with access to results. Responding to a Reference Checking Request (as Responding Principal) Upon received the Reference Checking Request from Recruiting Principal: · Complete and return info within 15 days; · If delayed, send interim reply with reason and expected final (max 2 months , exceptional only, approved by * KPIM/RO or delegate). *KPIM - key person in control function for intermediary management; RO - Responsible Officer. After submitting the first round of reference checking requests, respond to any further clarification requests within 15 days, if applicable. Recruiting Principal may assume that no further clarification to be provided by Responding Principal. Assessment by the Recruiting Principal (as Recruiting Principal) Discretion in Decisions : Recruiting principal has full discretion to appoint based on all info, including references. Evaluate adverse info considering nature, timing, explanations, and recurrence risk. Responding principals may voluntarily add material facts. Opportunity to Be Heard : For fairness, provide candidates chance for representations if adverse info may block appointment; share reference copy. No need to reopen investigations or seek more from responders. Proceeding with Adverse Records : Document assessment and justification for appointing despite issues; endorsed by KPIM/RO. Ongoing Assessment : If Responding Principal declare further information to provide, the reference process may consider complete once the Recruiting Principal assesses available information and decides on appointment ( must document the justification with KPIM/RO endorsement ). Pre-Appointment & Post-Appointment (as Recruiting Principal) Pre-Appointment If the Recruiting Principal decides to appoint despite adverse records from reference checks, they must document the assessment and justification, which requires endorsement by KPIM/RO. Post-Appointment If additional information arrives after appointment, the Recruiting Principal has full discretion to use it for ongoing evaluation, including potential actions like terminate the appointed candidate. Records and Communications (All Principals engaging Long-term business) Record Keeping For Insurance Broker Company engaging Long-Term Business: · Maintain records of resigned TRs for at least 7 years (or per internal policy, not longer than necessary under PDPO). · For unsuccessful application, retain max 2 years unless reason or consent. IIC Centralized Contact Database IA will maintain centralized contact database contain all participating principals via IA’s e-portal - Insurance Intermediaries Connect (“ IIC ”). As a safeguard, responding principals are not required to reply to reference check requests unless sent from the valid designated email address recorded in the contact database. Reference Checking Schemes Materials The Circular attached with relevant materials including: I. Main Paper – Details of the Schemes and Procedures II. Annex 1A – Template III. Annex 2A – Consent Form IV. FAQ for Licensed Entities V. FAQ for Licensed Individuals Attachment: Reference Checking Schemes Materials 附件: 保險中介人背景查核計劃資料 SIGNIFICANCE: This Scheme reinforces the IA's commitment to maintaining high standards of conduct and integrity in Hong Kong's insurance sector by preventing the recirculation of unfit intermediaries. By mandating structured reference checks, it enhances policyholder protection, reduces risks of misconduct, and promotes a more transparent and accountable industry. Insurers and intermediaries should review their hiring processes promptly to ensure compliance, as this could mitigate potential regulatory risks and foster greater trust in the market. Enforcement News 2. IA Imposes Restrictive License Conditions on Mighty Divine Insurance Brokers Limited Associated with Prince Group (太子集團) The Prince Group (太子集團) founded by Chen Zhi (陳志), has been implicated in operating telecom fraud parks in Cambodia, with Chen Zhi facing US prosecution and sanctions, including the freezing of approximately HK$120 billion in Bitcoin assets. On 28 October 2025, IA Imposes Restrictive License Conditions on Mighty Divine Insurance Brokers Limited (“ Mighty Divine ”) - Associate Company with Prince Group. The conditions prohibit the company from conducting, or representing itself as conducting, any regulated activities as defined under the Insurance Ordinance (Cap. 41) . Details of the Licensed Corporate: Name (EN) Mighty Divine Insurance Brokers Limited Name (CN) 美迪保險經紀有限公司 Licence No. FB1329 License Type Insurance Broker Company Line(s) of Business General & Long Term Business (excluding Linked Long Term Business) Business Address FLAT/RM 803, 8/F, 68 KIMBERLEY ROAD, TSIM SHA TSUI, KL Responsible Officer(s) Nill (as of 28 Oct 2025) For more details, please refer to Register of Licensed Insurance Intermediaries Conditions of the License 1) The licensee is restricted from carrying on, or holding out to carry on, any regulated activities under the Insurance Ordinance (Cap. 41) (“IO”); 2) Without prejudice to the generality of condition (1) above, and subject to condition (3) below, the licensee shall not receive, hold, or deal with any monies as specified in section 71(2) of the IO (i.e. (a) monies received by the company from or on behalf of a policy holder or potential policy holder for or on account of an insurer in connection with a contract of insurance; and (b) monies received by the company from or on behalf of an insurer for or on account of a policy holder or potential policy holder.) (“Client Monies”); and 3) The licensee may be involved in arranging the transfer, remittance or payment of, or otherwise deal with, Client Monies in accordance with the requirements under the IO and the Insurance (Financial and Other Requirements for Licensed Insurance Broker Companies) Rules (Cap. 41L), provided that (i) it acts in compliance with all applicable laws and regulatory requirements; and (ii) it has obtained the prior written consent of the Insurance Authority. 3. ICAC Secures Jail Sentences for Last Batch of Defendants in $52 Million Dummy Agents Commissions Fraud On 21 November 2025, the Hong Kong District Court sentenced the final six defendants in a major corruption case investigated by the Independent Commission Against Corruption (“ ICAC ”), involving a $52 million fraud scheme (the ” Scheme ”) orchestrated through dummy insurance agents at: FWD Life Insurance Company (Bermuda) Limited (富衛人壽保險(百慕達)有限公司) (“ FWD ”); and Sun Life Hong Kong Limited (香港永明金融有限公司) (“ Sun Life ”). Case Summary The scheme, masterminded by LO Yin-wa (“ LO ”), a former FWD branch manager who was earlier sentenced to 46 months' imprisonment, involved recruiting dummy agents who falsely represented themselves as handlers of 478 high-commission insurance policies between February 2016 and November 2020. This deception led to the release of over $52 million in commissions, incentives, bonuses, and allowances, most of which were funneled back to LO through laundered bank accounts. The majority of the policies lapsed due to non-payment of subsequent premiums. FWD and Sun Life provided full cooperation during the ICAC investigation, which stemmed from a corruption complaint. Enforcement Act and Court Order The last six defendants, aged 25 to 39 and acting as purported insurance agents were convicted or pleaded guilty to charges of conspiracy to defraud and conspiracy to deal with property known or believed to represent proceeds of an indictable offense, with sentences ranged from 12 to 21 months' imprisonment. i. LEUNG Tsz-wing (梁紫穎) ii. MO Wing-han (毛詠嫻) iii. WOO Kin-leung (胡健良) Entered Guilty Pleas iv. LO Nga-wing (羅雅穎) v. NGAN Tsz-ting (顏梓定) vi. KONG Tsz-ying (江梓瑩) Convicted After Trial A total of 17 defendants faced 20 charges in the case, with 10 other dummy agents previously sentenced to terms ranging from 11 to 22 months. SIGNIFICANCE: The ICAC continues to prioritize integrity in the insurance sector, offering training and resources like the Corruption Prevention Guide for Insurance Companies to mitigate such risks. The judge also reprimanded the defendants for breaching professional conduct standards, noting they were lured into the offenses by the main culprit. This case highlights the severe consequences of integrity breaches in the insurance industry, emphasizing the need for robust internal controls, agent verification processes, and anti-fraud measures to prevent dummy agent schemes that erode public trust and cause financial harm. 4. ICAC Issues Arrest Warrants for Two Individuals Implicated in $3 Million Insurance Commissions Fraud The ICAC has issued arrest warrants for NG Ho-lun (吳浩麟) (“ NG ”) and Kuzca CHIK Sin-deon, formerly known as Pan CHIK Ka-tung (戚善惇, 前稱戚加彤) (“ CHIK ”), two key figures in an alleged insurance fraud scheme that defrauded: Sun Life Hong Kong Limited (香港永明金融有限公司) (“ Sun Life ”); and China Taiping Life Insurance (Hong Kong) Company Limited (中國太平人壽保險(香港)有限公司) (“ Taiping Life ”); of approximately $3 million in commissions, bonuses, and allowances through bogus policies and false representations. Case Summary The case, which involves recruiting family members, friends, and police officers as dummy agents and policyholders, stems from corruption allegations and has led to charges against eight individuals total, with six already charged and appearing in court. On 6 November 2025, the case against the six charged defendants were transferred from the Eastern Magistrates’ Courts to the District Court for plea on 27 November 2025. The defendants face 21 charges. See below table for the Six Charged Defendants Details: Role/Relationship Name Police Sergeant LAM Hin-ho (林顯豪) LAM Hin-ho’s brother LAM Chun-pong (林振邦) LAM Hin-ho’s sister-in-law YU Xiaodan (余曉丹) LAM Hin-ho’s friend LAU Chun-yee, formerly known as LAU Man-yee (劉臻頤, 前稱劉敏儀) Solicitor Osbert HUI Yee (許懿) Police Constable SZE Hong-chak (施匡澤) For more details of the case, please refer to Topic 4 of ComplianceOne Insurance Newsletter – October 2025 Details of Two Wanted Individuals Name Former Positions Role in Fraud Fraud Conducted NG Ho-lun Regional Director of Sun Life; Senior Branch Manager of Taiping Life Central role in orchestrating the fraud Recruited individuals (including LAM Hin-ho’s family, friends, and police colleagues) as dummy downline agents and policyholders; Took out 20 insurance policies, paying premiums while falsely claiming they were settled by genuine policyholders; Ensured false claims of agent interviews; Conspired with LAM Hin-ho and LAU Chun-yee to create false academic qualifications for LAU's recruitment. Kuzca CHIK Sin-deon (formerly Pan CHIK Ka-tung) Insurance Agent of Sun Life Participated in recruitment and posed as a dummy agent Contributed to false representations to insurers; Deceived insurers into believing applications were legitimate and interviews occurred, leading to fraudulent commissions. SIGNIFICANCE: This case underscores the vulnerabilities in the insurance sector to internal fraud schemes involving unlicensed or dummy intermediaries, particularly when intertwined with public servants like police officers, potentially eroding public trust in both law enforcement and financial institutions. The ICAC's proactive investigation and pursuit of fugitives highlight the importance of robust verification processes for policy applications, agent qualifications, and commission payouts to prevent such exploitation. Insurers are urged to enhance anti-fraud measures, including cross-verification of applicant interviews and premium sources, while collaborating with regulators to maintain industry integrity and protect policyholders from systemic risks. [End of ComplianceOne Insurance Newsletter – November2025] For more details, please click on the title of the topic above. ================================= ~ Make It Right Today, Better Tomorrow ~ ================================= The Newsletter is for general information purpose only and is not intended to constitute legal or other professional advice. For enquiries, please email to support@complianceone.hk or WhatsApp us at (852) 95164607 . Unit 1605, 16/F, West Tower, Shun Tak Centre,168-200 Connaught Road Central, Sheung Wan, Hong Kong Tel: (852) 39550277 www.complianceone.hk

Considering the amendments to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Chapter 615), a new registration regime for Dealers in Precious Metals and Stones (“DPMS”) on 1 April 2023. Online Training Program for - Dealers in Precious Metals and Stones (DPMS) 貴金屬及寶石交易商 (DPMS) - 線上持續培訓課程 Considering the amendments to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Chapter 615), a new registration regime for Dealers in Precious Metals and Stones (“DPMS”) on 1 April 2023. The Hong Kong Customs and Excise Department (the “Customs”) is responsible for implementing this system and supervising the compliance of registered dealers with anti-money laundering and counter-terrorist financing (“AML-CFT”) regulations. To help regulated cooperate (including DPMS) stay updated on the latest regulatory requirements, we have launched a series of online courses. These courses are designed to ensure that dealers can grasp and adhere to the latest compliance standards, with content that is continuously updated and revised. Click Thinkific platform link - About the Precious Metals and Stones Dealers Training 根據《打擊洗錢及恐怖分子資金籌集條例》（第615章）的修訂，香港於2023年4月1日引入了貴金屬及寶石交易商（DPMS）的註冊制度。香港海關負責該制度的執行，並監管註冊交易商在打擊洗錢及恐怖分子資金籌集方面的合規性。 為了幫助貴金屬及寶石交易商持續了解最新的法規要求，我們特別開設了一系列在線課程。這些課程旨在確保交易商能夠掌握並遵守最新的合規標準，並會持續更新及修訂内容。 點擊Thinkific平台連結 - 關於貴金屬及寶石交易商培訓課程 Training Program Each session lasts 1 hour and is conducted through the Thinkific platform. After completing the training and passing a short quiz, participants will receive a certificate of participation. You can also log in to Thinkific at any time to review your training records. Intended Audience: Dealers in precious metals and stones Management personnel Compliance officers Money laundering reporting officers Frontline staff Back-office staff New employees Training Topics Include: Registration Guide for DPMS Overview of the registration background for DPMS Obligations and responsibilities AML-CFT requirement Duties for senior management Joint Financial Intelligence Unit - Reporting Suspicious Transactions How to identify suspicious transactions Reporting process and requirements Protective measures and legal responsibilities Case studies and practical applications Conduct and Ethical Definition and importance of business ethics Conduct and integrity Compliance and ethical decision-making Case discussions and industry best practices 關於培訓課程 每節課程為1小時，透過Thinkific平台參與課堂。培訓結束後，只要通過簡短的測驗，即可獲發參與證書。你亦可隨時登錄Thinkific檢閱培訓記錄。 適用人士 : 貴金屬及寶石交易商 管理人員 合規主任 洗錢報告主任 前線職員 後勤職員 新入職人員 課程的題材範圍包括: 貴金屬及寶石交易商註冊指引 金屬及寶石註冊制度的背景簡介 註冊人的責任 相關法例和法定責任 反洗錢系統/制度/核心要求 各職位的責任 聯合財富情報組 - 舉報可疑交易 如何識別可疑交易 舉報流程及要求 保護措施及法律責任 案例分析與實務操作 商業行為和道德標準 商業道德的定義與重要性 職業操守與誠信 法規遵循與道德決策 實例討論與行業最佳實踐 Why ComplianceOne? Professional : Our courses are specifically designed for DPMS to ensure your acknowledgement of the latest compliance knowledge and skills. Flexible: You can log in to Thinkific platform to start or review your training records, anytime, anywhere. Easy access: The Platform supports multiple devices, no installation needed, all you need is a browser. Certification : After finished the training, certificate will be provided for enhancing your professional credentials and credibility. Payment Method: Convenient payment methods by using Visa credit card or PayPal. Courses are valid for 365 days after purchase. During this period, you can log in to Thinkific platform to take course or print certificates at any time. 為什麼選擇天匯合規的網上持續培訓平台？ 專業培訓 ：我們的課程專為貴金屬及寶石交易商設計，確保您獲得最新的合規知識和技能。 靈活學習 ：您可以根據自己的時間安排進行學習，並隨時登入平台檢閱培訓記錄。 簡單易用 ：網上持續培訓平台支援多種裝置，無需安裝，操作簡單。 獲得認證 ：通過簡短測驗後即可獲得參與證書，提升您的專業認證和可信度。 支付方式 ：接受 Visa信用卡或PayPal方式支付，方便快捷。 課程在購買後365天內有效。在此期間，您可以隨時登入Thinkific平台參加課程或列印證書。

The topics discussed in this monthly newsletter are as follows: ComplianceOne Newsletter – October 2022 ComplianceOne Newsletter – October 2022 The topics discussed in this monthly newsletter are as follows: 1. The SFC Considers Authorization of Virtual Asset Futures Exchange Traded Funds ( VA Futures ETFs ) 2. HKEX Announces the Launch of Core Climate - A New International Carbon Marketplace 3. Court orders Sound Global ( 0967.HK ) Chairman to Purchase Shares from Investors 4. SFC Reprimands and Fines Asia Research & Capital Management Limited HK$1.75 million and Bans its MIC of Compliance 5. Former Account Executive of Fullbright Securities Limited Convicted of Securities Fraud 6. Court Convicted Wong King Hoi for Obstruction of SFC's Search Operation 7. SFC Bans a Former Licensed Staff of China Galaxy for Violation of Company's Staff Dealing Policy MARKET NEWS 1. The SFC Considers Authorization of Virtual Asset Futures Exchange Traded Funds (VA Futures ETFs) The SFC would consider authorizing exchange traded funds (ETFs) that obtain exposure to virtual assets (VAs) primarily through futures contracts for public offering in Hong Kong. Unlike before in 2018 NOV where only professional investors are allowed to have exposure to VAs, and having witnessed the rapid evolution of the VA landscape; a Joint Circular in January 2022 between the SFC and the HKMA has announced that licensed and registered intermediaries are allowed to offer VA Futures ETF to retail investors in HK. For reasons that it has been observed that there are meaningful developments in the VA ecosystem recently and some of the initial concerns over VA Futures ETFs have become increasingly manageable and could be adequately addressed with proper safeguards, disclosure and investor education. SIGNIFICANCE: Despite the recent developments and innovations, the exposure to spot VAs are still restricted to professional investors only. Whereas VA Futures ETFs seeking for SFC authorization have to meet applicable requirements including the followings: (i) Management companies should demonstrate at least three years’ proven track record with relevant experience. (ii) Only VA futures traded on conventional regulated futures exchanges are allowed currently, only Bitcoin futures and Ether futures on CME are allowed. (iii) The management company is expected to adopt a flexibility investment strategy in the portfolio composition (iv) Disclosure of the product key facts statement is required. (v) Intermediaries are obliged to comply with the applicable requirements under the Code of Conduct when distributing the derivative products. (vi) Investor education should be provided. 2. HKEX Announces the Launch of Core Climate - A New International Carbon Marketplace HKEX announced on 20 OCT 2022, the launch of the Core Climate , a new international carbon marketplace that helps connect capital and resources with climate-related opportunities in Hong Kong, Mainland China, Asia and beyond. The HKEX is committed to provide an easy-access, one-stop, integrated carbon marketplace that includes trading, custody and settlement functions for investors and project owners across the climate value chain, contributing to the realization of global carbon neutrality goals. What is Core Climate: (i) Trading platform : investors can source, purchase, settle and retire voluntary carbon credits in phases. (ii) Trusted marketplace : provides best-in-class market infrastructure and effective, transparent and certified carbon credits and instruments that corporates and investors can use to deliver on their commitment to net zero. (iii) Global community : Core Climate builds Hong Kong’s position as a leading global finance center connecting capital with climate-related products and opportunities in vicinity and around the world. SIGNIFICANCE: HKEX is demonstrating to the world that Hong Kong , as an international financial center, also entrusts with itself the obligation to committing to building a more low-carbon and healthy community to our next generations. As CO-Head of Markets Glenda So said: " We see Core Climate developing to become essential infrastructure, part of our highly connected international ecosystem, matching investment capital with new climate projects, technologies and business models. This will accelerate the shared Net Zero transition and secure a sustainable future for coming generations .” ENFORCEMENT NEWS 3. Court orders Sound Global ( 0967.HK ) Chairman to Purchase Shares from Investors The Securities and Futures Commission (SFC) has obtained an order in the Court of First Instance against the chairman and executive director of Sound Global Ltd. (Sound Global), Mr. Wen Yibo, to purchase shares held by the other shareholders of the company at a price to be determined by the Court – after he was found to have orchestrated a scheme to falsify the company’s bank balances and fabricated relevant bank statements and balance confirmations. And the Court also issued a disqualification order for 12 years against Wen. As Mr Ashley Alder, the SFC’s Chief Executive Officer said: “ The share purchase order represents an important milestone in the SFC’s efforts to protect the investing public from wrongful conduct by management of listed companies and our determination to deploy our full range of regulatory tools to tackle market misconduct and uphold market integrity .” 4. SFC Reprimands and Fines Asia Research & Capital Management Limited HK$1.75 million and Bans its MIC of Compliance The SFC has reprimanded and fined Asia Research & Capital Management Limited (ARCM) HK$1.75 million for failures relating to its non-compliance with the European Union’s short selling reporting requirements (EU Regulation) and to promptly notify the SFC of its material regulatory breaches. The SFC has also banned Mr. Billy Wong Yim Chi, ARCM’s former Head of Compliance and Operations and Manager-In-Charge (MIC) for Compliance for two months from 10 October 2022 to 9 December 2022 for reason that ARCM’s failures to comply with the EU Regulation were directly attributable to Wong’s failure to discharge his duties as ARCM’s MIC for Compliance and a member of its senior management during the material time. The SFC also considers Wong’s conduct fell short of the standard required of him as MIC for Compliance. SIGNIFICANCE: This case seems to be the first instance since the introduction of the MIC regime that a person entrusted with MIC function is sanctioned by the SFC for his incompetence in discharging the duties for the licensed corporation. It conveys a signal to the licensed corporations and the MIC candidates that non-licensed personnel taking the roles of MIC are supposed to assume the same degree of accountability in the eyes of the SFC. 5. Former Account Executive of Fullbright Securities Limited Convicted of Securities Fraud The Eastern Magistrates’ Court has convicted Mr. Danny Fung Kwong Shing, a former account executive of Fulbright Securities Limited, of the offences of engaging in fraud or deception in transactions involving securities under the Securities and Futures Ordinance (SFO) in a criminal prosecution brought by the SFC. Fung admitted that he had employed a fraudulent scheme of effecting transactions between two accounts, one of his friend and one of his client (without proper authorization from the client), rendering the client a loss and his friend a profit instead. Fung was remanded in custody pending sentence on 27 October 2022 after pleading guilty to all 25 charges; and was later sentenced to two-and-a-half months’ imprisonment following his conviction. 6. Court Convicted Wong King Hoi for Obstruction of SFC's Search Operation The Eastern Magistrates’ Court has convicted Mr. Wong King Hoi (aka「 摸魚 」) after he pleaded guilty to a charge of obstructing employees of the SFC in the execution of a search warrant . When the SFC executed the search warrant at Wong’s residence, Wong allegedly delayed in giving the SFC search team access to his residence and attempted to dispose of four objects including two mobile phones and two notebooks. Wong was remanded in custody pending sentence on 10 November 2022. 7. SFC Bans a Former Licensed Staff of China Galaxy for Violation of Company's Staff Dealing Policy The SFC has banned Ms. Tang Shiyi, a former licensed staff of China Galaxy International Securities (Hong Kong) Co., Limited and China Galaxy International Futures (Hong Kong) Co., Limited (collectively, CGI), from re-entering the industry for 10 months from 29 October 2022 to 28 August 2023. The disciplinary action follows an SFC investigation which found that between July 2019 and February 2021, Tang: (i) failed to obtain CGI’s approval to open and maintain two securities trading accounts with an external brokerage firm and conducted 148 personal trades through the said accounts; (ii) dealt in a stock on CGI’s restricted list; (iii) engaged in day-trading on two occasions, in violation of CGI’s staff dealing policy; (iv) concealed the above securities trading accounts by providing a false and misleading declaration to CGI. The SFC considers that Tang’s conduct, which was willful and dishonest, calls into question her fitness and properness to be a licensed person . SIGNIFICANCE: Tang circumvented CGI’s internal control policies and her conduct prevented CGI from monitoring and reviewing its employees’ trading activities to ensure compliance with laws and regulations. It reminds the licensed persons that taking a frivolous attitude in complying with internal policies will not be construed by the SFC as a lesser breach as compared to violation of prevailing governing rules. For more details, please click on the title of the topic above. ================================= ~ Make It Right Today, Better Tomorrow ~ ================================= The Newsletter is for general information purpose only and is not intended to constitute legal or other professional advice. For enquiries, please email to support@complianceone.hk or call us at (852) 39550277 . Unit 1104, 11/F, 299QRC, 287-299 Queen's Road Central, Sheung Wan, Hong Kong Tel: (852) 39550277 www.complianceone.hk To unsubscribe, please simply reply with “ I don’t like to know more about Compliance ”.

The topics discussed in this monthly newsletter for insurance are as follows ComplianceOne Insurance Newsletter - Jul 2024 The topics discussed in this monthly newsletter are as follows: I. IA Regulatory Updates (1) Individual licensees are reminded to submit their CPD Declaration directly to the IA via the Insurance Intermediaries Connect (“ IIC ”) by 30th September 2024 (7 June 2024) (2) Responsible Officers of Licensed Broker Companies are required to attend two RO specific CPD (“ RO-CPD ”) hours in the coming CPD Assessment Period (28 June 2024) (3) The IA put Key Person in Control Function (“ KPIC ”) of Authorized Insurers – related topics into a pilot scheme for CPD training (28 June 2024) (4) The IA will start charging fees for processing insurance intermediary license applications and related notifications starting 23 September 2024 (31 July 2024) (5) The IA issued a Practice Note to provide guidance in respect of the investment choices and premium allocations under Investment-Linked Assurance Scheme Policies (“ ILAS Policies ”) (5 July 2024) (6) The IA and the HKMA carried out join inspection exercise on Premium Financing (“ PF ”) and provided certain findings (27 June 2024) (7) The Hong Kong Federation of Insurers launched a Reference Checking Scheme to standardize the reference check process (5 July 2024) (8) The Hong Kong Federation of Insurers launched a Reference Checking Scheme to standardize the reference check process (5 July 2024) II. Enforcement News (9) Tahoe Life became the first insurer to be taken over by the regulators in Hong Kong to protect policy holders’ interests (27 July 2024) (10) China Taiping’s former employees were charged by ICAC for dummy agent scam and money laundering activities (17 July 2024) (11) The IA bans Chan Hung Fei from the industry within 34 months due to misappropriation of premium payments (12 July 2024) (12) The IA imposes a pecuniary fine against a broker company and a technical representative for mishandling of insurance policy (24 June 2024) I. IA Regulatory Updates (1) Individual licensees are reminded to submit their CPD Declaration directly to the IA via the Insurance Intermediaries Connect (“IIC”) by 30th September 2024 (7 June 2024) The IA issued a circular on 7 June 2024 that sets out the procedures for reporting CPD attainment for the Assessment Period 2023/2024 (1 August 2023 to 31 July 2024). Key deadlines are: 31 July 2024: Complete CPD hours. 30 September 2024: Submit CPD Declarations. 31 October 2024: Appointing principals report CPD compliance to the IA. Licensees and principals can manage CPD requirements via the Insurance Intermediaries Connect (“ IIC”) platform , with daily updates and final lists available on 1 August 2024 . I. CPD Declarations by Individual Licensees : Direct Submission to IA via IIC: Before 31 July 2024: Only if CPD hours are completed. 1 August to 30 September 2024: All licensees can submit, even if incomplete. 1 October to 15 November 2024: Update status if CPD hours were incomplete. Notification to Appointing Principals: Licensees must inform principals of their submission. Licensees without Appointing Principals: Report directly to the IA via IIC or email. II. CPD Declarations to Appointing Principals : Before 31 July 2024: Principals report compliance for licensees who fulfilled CPD requirements. 1 August to 31 October 2024: Principals report compliance for all licensees, including new ones. CPD Penalty Framework : Minimum 15 CPD hours, including 3 hours on “Ethics or Regulations” (3 total for restricted scope travel insurance). SIGNIFICANCE : According to the CPD Non-Compliance League Table (see above), CPD compliance increased from 90% to 96.1%, but the incentive target is 100%. The IA will continue to publish CPD non-compliance rankings. (2) Responsible Officers of Licensed Broker Companies are required to attend two RO specific CPD (“RO-CPD”) hours in the coming CPD Assessment Period (28 June 2024) The Continuing Professional Development (“CPD”) requirements set out in the Guideline on Continuing Professional Development for Licensed Insurance Intermediaries (“GL24”) . The Guideline mentions ROs must complete 15 CPD hours annually, including 3 hours in “Ethics or Regulations.” This requires completion, during each annual CPD Assessment Period (which runs from 1 August to 31 July ). The pilot scheme for the 2024-2025 CPD period requires ROs to complete a 2-hour RO-specific CPD course, which counts towards the 15-hour requirement and 2 of the 3 compulsory “Ethics or Regulations” hours. This course will be delivered through Professional Insurance Brokers Association (“PIBA”) and Confederation of Insurance Brokers (“CIB”) . The IA encourages every ROs of a brokerage firm to attend an RO-CPD course offered by PIBA or CIB during the 2024/2025 CPD Assessment Period (i.e. 1 August 2024 to 31 July 2025). While attendance is not mandatory, records will be kept and absence may impact the IA’s assessment of the broker company’s conduct risk profile. SIGNIFICANCE : The IA emphasizes the importance of representative institutions adhering to the principle of "treating customers fairly". If the pilot project is successful, the continuing professional development requirements for representative institutions may be formally implemented in the future. (3) The IA put Key Person in Control Function (“KPIC”) of Authorized Insurers – related topics into a pilot scheme for CPD training (28 June 2024) While most control functions of Key Person in Control Function (“KPIC”) already existed, the Intermediary Management Control Function was newly introduced on 23 September 2019 which stated out the function of KPIC for Intermediary Management (“KPIM”). To assist KPIMs understand their roles, the IA has issued circulars and conducted training through the Hong Kong Federation of Insurers (“HKFI”). Moreover, the IA is launching a pilot Continuing Professional Development (“CPD”) training for KPIMs during the 2024/2025 CPD Assessment Period (i.e. 1 August 2024 to 31 July 2025). This two-hour course can be attended in person or via recorded sessions. S IGNIFICANCE : The IA mentioned the Polit Scheme attendance is encouraged but not mandatory. However, non-attendance may affect the IA’s assessment of an insurer’s conduct risk profile. The IA emphasizes the importance of KPIMs in upholding the “ treating customers fairly ” principle and maintaining confidence in the insurance market. (4) The IA will start charging fees for processing insurance intermediary license applications and related notifications starting 23 September 2024 (31 July 2024) The IA issued a circular announcing changes to the fees for applications and notifications, effective from 23 September 2024 . Applicants (i.e. individual licensees, insurance agencies, and broker companies) must pay relevant fees specified in Annex 1 to the IA when: applying for a new or renewal license, adding a line of business, seeking approval for a responsible officer, or for appointment and exemption applications. Insurance Intermediaries Connect (“IIC”) gateway update: The gateway without fees for the IA’s e-portal (i.e. Insurance Intermediaries Connect (“IIC”)) will close at 12:00 noon on Friday, 20 September 2024 . Starting from 23 September 2024 , fees for applications and notifications submitted through IIC, must be paid at the time of submission. Access to IIC will be unavailable in between dates mentioned above. SIGNIFICANCE : Applicants should begin preparing their first batch submissions. The updated User Guide for IIC with detailed payment instructions will soon be available on the IA’s website. Additionally, applicants can refer to Annex 2 Q&A section for further understanding. (5) The IA issued a Practice Note to provide guidance in respect of the investment choices and premium allocations under Investment-Linked Assurance Scheme Policies (“ILAS Policies”) (5 July 2024) On 5 July 2024, the Insurance Authority (“IA”) issued a circular and Practice Note outlining regulations for licensed insurance brokers offering services related to investment choices and premium allocations under Investment-Linked Assurance Scheme Policies (“ILAS Policies”). Effective on 1 October 2024 . The Practice Note applies to Broker Companies, Technical Representatives (“Broker”), and Responsible Officers (“RO”), addressing execution-only services, advisory investment services, and discretionary investment management services. Annex A pertains to individuals, while Annex B covers the IA’s expectation of Broker Companies’ internal controls and procedures. Annex A - outlines the competency requirements for personnel (i.e. Brokers and ROs) who offer advisory investment services and discretionary investment management services which apply to all ILAS Polices issued on or after 1 October 2024 . Under the grandfathered investment-linked life insurance policy, those who fail to meet the new competency requirements and wish to continue providing relevant services before 31 July 2027 is required to complete an additional 2 hours of mandatory Continuing Professional Development (“CPD”). Annex B - outlines the IA’s expectations for corporate governance, controls, and procedures related to ILAS Policies, applicable from 1 October 2024 . Broker Companies must ensure that policyholders receive and understand transparent information about terms, remuneration and service charges that are independent of the investment life policy feature. SIGNIFICANCE : Broker companies and ROs may consider the grandfathered arrangements as the temporary alternative solution if issues arise during the license (i.e. Type 4 and Type 9) application before 1 October 2024 . (6) The IA and the HKMA carried out join inspection exercise on Premium Financing (“PF”) and provided certain findings (27 June 2024) The Insurance Authority (“IA”) and the Hong Kong Monetary Authority (“HKMA”) jointly completed an inspection on premium financing (“PF”) activities in late 2023 to assess compliance with the New Supervisory Standards (the “Standards”) introduced on 1 January 2023 . The inspection found that most authorized insurers and licensed intermediaries complied with the standards, often adopting stricter thresholds to prevent over-leveraging. The “ Important Facts Statement – Premium Financing ” (IFSPF) disclosure requirement was widely implemented. Good Practices and Findings The inspection revealed several good practices among insurers and intermediaries, such as: Conservative affordability analysis, Displaying leverage ratios in financial needs analysis (FNA) forms, and Conducting post-sale calls due to different circumstances instead of just to vulnerable customers. However, issues were also noted, including unawareness of PF standards, Questionable financial reconfirmations, Incorrect bank reference letters, Incomplete IFS-PF forms, premature product recommendations, and Inadequate credit assessments by banks. SIGNIFICANCE : Insurers and intermediaries are reminded to adhere to the Standards, especially in the current high-interest environment. Details of the observations of two regulators can be found in the Annex for further understanding. (7) The Hong Kong Federation of Insurers launched a Reference Checking Scheme to standardize the reference check process (5 July 2024) On 5 July 2024, the Hong Kong Federation of Insurers (“HKFI”) introduced the Reference Checking Scheme for Insurance Intermediaries with long-term businesses. The Insurance Authority (“IA”) endorsed and supported this Scheme through a Circular issued on the same date. The Scheme will come into effect on 1 September 2024 under the IA regulate requirement. Key Aspects of the Scheme In accordance with the Scheme’s requirement, when Long Term Insurers (the “Recruiting Insurer”) consider appointing a candidate who has previously worked for other Long Term Insurers (the “Responding Insurers”) within the past 7 years , the Recruiting Insurer must conduct reference checks with the Responding Insurers. The assessment should be reviewed by the Key Person in Control Function for Intermediary Management (“KPIM”) . The IA expects Long Term Insurers and their KPIMs to implement the Scheme with internal controls (i.e. due diligence, vetting procedures etc.) as part of their regular onboarding procedures. The IA’s Supervisory Approach Any Long Term Insurer does not participate in the Scheme or fails to meet its obligations, the IA views this as a sign of internal control weaknesses. As such, the insurance company may expect the enhance supervisory on the adequacy of recruitment and onboarding controls by the IA. This may result in the insurance company's application for any insurance license (i.e. new license and renewal) being scrutinized more closely and taking a relatively longer time. SIGNIFICANCE : As the circular mentions that the IA is currently evaluating the possibility of expanding the scheme to cover all types of insurance institutions, it is expected that the scheme will soon be applicable to all insurance intermediaries. Insurance intermediaries currently exempt from participating in the Scheme should consider the Scheme as the “best practice” and implement it gradually. II. Enforcement News (8) Tahoe Life became the first insurer to be taken over by the regulators in Hong Kong to protect policy holders’ interests (27 July 2024) On 26 July 2024 , the Insurance Authority (“IA”) appointed to take full control of Tahoe Life Insurance Company Limited ("Tahoe Life”)’s affairs and property in Hong Kong. By order of the Supreme Court of Bermuda dated 26 July 2024 , Mr Marcin Czarnocki of Deloitte Financial Advisory Ltd., Mr Derek Lai and Mr Forrest Kam of Deloitte Touche Tohmatsu, and Mr Oliver Cheng of Deloitte Advisory (Hong Kong) Limited as the Joint Provisional Liquidators (the “JPLs”) of Tahoe Life as a coordinated regulatory action with the IA to protect policy holders’ interests. This coordinated action aims to protect policyholders’ interests by ring-fencing Tahoe Life’s assets rather than winding up the company. Both the IA and Bermuda Monetary Authority (“BMA”) are cooperated under the International Association of Insurance Supervisors Multilateral Memorandum of Understanding (“MMoU”) to ensure effective regulatory oversight and recovery solutions for Tahoe Life. SIGNIFICANCE : Back in 2020, Tahoe Group experienced its first debt default. On 28 July 2023, the Shenzhen Stock Exchange terminated its listing qualifications. Just two weeks after Tahoe Group was delisted, the IA appointed a special advisory team from PricewaterhouseCoopers (“PWC”) to provide professional advice on investment strategy and dividend policy for Tahoe Life . This move aimed to ensure the protection of policyholders’ interests. As Tahoe Group’s issues worsened, the IA finally took action. Within a year, Tahoe Life was taken over, marking the first instance of a life insurance company being taken over in Hong Kong’s history. (9) China Taiping’s former employees were charged by ICAC for dummy agent scam and money laundering activities (17 July 2024) The Independent Commission Against Corruption (“ICAC”) charged five former employees of China Taiping Life Insurance (Hong Kong) Company Limited (“China Taiping”) for their involvement in a dummy agent scam and providing false information in insurance policy applications, defrauding the company of $4.25 million in commissions and other payments. Three of the dummy agents were also charged with handling over $2.3 million in crime proceeds. Court proceedings are still ongoing. In accordance, charges of this case contain the following: Fraud (Section 16A(1) of the Theft Ordinance) - could face imprisonment up to 14 years. Dealing with proceeds of an indictable offence (Section 25(1) of the Organised and Serious Crimes Ordinance) - could face imprisonment up to 14 years and fine up to HKD 5 million. Forgery (Section 71 of the Crimes Ordinance) - could face imprisonment up to 14 years. Penalties vary based on the offence’s severity and the court’s discretion, considering prior records and other factors. SIGNIFICANCE : Despite China Taiping has not received any penalties and fully cooperated with the investigation, as a regulated insurance company, it is responsible to ensure the fit and proper of its appointed agents and brokers, as well as supervising and preventing such incidents. Insurance companies should learn from this incident by conducting their own or third-party compliance reviews, strengthening internal controls, enhancing monitoring processes, and preventing similar incidents in the future. (10) The IA bans Chan Hung Fei from the industry within 34 months due to misappropriation of premium payments (12 July 2024) The IA has banned Chan Hung Fei (“Mr Chan”) from applying for a licence for 34 months due to misappropriating premiums from two policyholders. Between 2019 and 2021, Mr. Chan directed HK$36,093 in premiums to his personal bank account instead of passing them to AXA, causing the policies to lapse. He also failed to inform the policyholders about the status of their policies and upcoming payments. After complaints were filed, Mr. Chan returned the premiums, reinstated the policies, and reimbursed medical expenses for one policyholder. The IA emphasized the importance of intermediaries adhering to professional and ethical standards, regardless of personal relationships with clients. Policyholders are reminded to make premium payments through official insurer channels. SIGNIFICANCE : As concluded by the IA, considered Mr. Chan’s return of premiums, admission of misconduct, and cooperation in deciding the disciplinary action, aiming to achieve a strong deterrent effect. (11) The IA imposes a pecuniary fine against a broker company and a technical representative for mishandling of insurance policy (24 June 2024) The Insurance Authority (IA) fined a licensed insurance broker company HK$37,270 and a licensed technical representative HK$7,000 for mishandling a client’s insurance policy. The broker company admitted its wrongdoing and compensated the client HK$62,730 for property damages. Consequently, the IA imposed a fine of HK$37,270 on the broker company and HK$7,000 on the technical representative due to the seriousness of the wrongdoing. SIGNIFICANCE : The IA remains vigilant and will take disciplinary actions against those who fail to properly discharge their duties. Further details can be found in the “Enforcement News” section on the IA’s website. [End of ComplianceOne Insurance Newsletter – July 2024] For more details, please click on the title of the topic above. ================================= ~ Make It Right Today, Better Tomorrow ~ ================================= The Newsletter is for general information purpose only and is not intended to constitute legal or other professional advice. For enquiries, please email to support@complianceone.hk or WhatsApp us at (852) 95164607 . Unit 1104, 11/F, 299QRC, 287-299 Queen's Road Central, Sheung Wan, Hong Kong Tel: (852) 39550277 www.complianceone.hk

Navigating Regulatory Requirements for EAM and Virtual Asset Management Navigating Regulatory Requirements for External Asset Managers (EAM) and Virtual Asset Management Join us for our first co-hosting webinar of the year with abc Multiactive! We'll be discussing the topic of Navigating Regulatory Requirements for External Asset Managers (EAM) and Virtual Asset Management . During the webinar, our expert speakers will share their knowledge and experience on the regulatory landscape and provide practical tips and strategies to help you ensure compliance and streamline your wealth management workflow. Topics: 1. Regulatory Requirements for EAM Client Onboarding: KYC, PI Assessment, Suitability, Risk Assessment, and More 2. Understanding the Fund Manager Code of Conduct (FMCC) and Its Impact on EAMs 3. Key Considerations & Requirements for Managing Virtual Assets 4. Tips and Strategies for EAMs and Virtual Asset Managers: Best Practices with Wealth Management Solutions Event Details: Date: 20 Apr 2023 (Thur) Time: 16:30 - 17:30 Language: Cantonese 廣東話 *Attendance Cert will be provided upon completion of the webinar by request. Speakers: Tao Wong , Co-founder & Partner, ComplianceOne Consulting Limited Nelson Wong , Business Development Director, abc Multiactive (HK) Limited Don't miss out on this informative and valuable event! Register now to secure your spot. https://us06web.zoom.us/webinar/register/9816812016364/WN_pOKc4BQZTcGJ_UcRgHKHuw

The topics discussed in this monthly newsletter are as follows: ComplianceOne Newsletter – October 2024 The topics discussed in this monthly newsletter are as follows: 1. Dr Kelvin Wong appointed as new SFC Chairman 2. New Public Fund Depositaries Regime effective from 2 October 2024 3. New Listing Application Process in Hong Kong is streamlined 4. SFC launches a new Fund Authorization Simple Track (“FASTrack”) to bolster Hong Kong market appeal 5. e-IP application/ submission system on WINGS to be fully adopted in November 6. SFC concludes consultation on Enhanced REIT and Market Conduct regimes 7. SFC sets out vision to foster Fintech ecosystem in Hong Kong 8. Common Red-flags of suspicious transactions from using Customer Supplied System (CSS) observed in SFC investigations [1] 9. Tycoon Dickson Poon is alleged to be involved in Insider Dealing 10. SFC disqualifies former CFO of Fujian Nuoqi 11. SFC suspends former employee of Julius Baer for several regulatory breaches 12. First jail sentence for Unlicensed Activity with compensation order The topic involves multiple enforcement news. Market News 1. Dr Kelvin Wong appointed as new SFC Chairman On 14 Oct 2024, the SFC made a welcome announcement on appointment of new Chairman Mr Kelvin WONG Tin-yau effective 20 October 2024 who will succeed the existing Chairman Mr Tim LUI. A snapshot summary of the welcome speeches from various key figures regarding the appointment. Mr Tim LUI said: “ Kelvin has a wealth of knowledge and experience in the development and regulation of capital markets, in particular, being Chairman of the Accounting and Financial Reporting Council, which the SFC works closely with to uphold the quality and maintain the integrity of Hong Kong’s capital markets and its reputation as an international financial centre. ” And Mr LUI also added that as Kelvin been a Non-Executive Director of the SFC and Chairman of the then Investor Education Centre, Kelvin is well-versed in the policy objectives, its strategic priorities and its operation of the Commission. Mr WONG himself said: “ I am honoured to be appointed as Chairman of the SFC, a leading global securities regulator. I look forward to working cohesively with the Board, CEO Julia, and the management team, many of whom I closely partnered with in my previous role as a Non-Executive Director .” Ms Julia LEUNG, the SFC’s Chief Executive Officer, said: “ I would like to extend a warm welcome to Kelvin and express my deep gratitude to Tim for his exemplary leadership and invaluable guidance in steering the SFC through the many difficult challenges while continuing our mission in pursuing market integrity, transparency and resilience. We now have a set of very clear strategic priorities which would enable the SFC to continue its firm commitment in safeguarding the integrity of our markets and continuing to foster market development .” SIGNIFICANCE: As reflected in the speeches above that given the prior co-working experiences of Mr WONG with the Commission and its high-ranked officials, together with his vast experiences and familiarity with the policies and core missions from previous role as Non-Executive Director of the Commission, it can be expected of a smooth, consistent transition, and continuation of the mission and vision of the Commission in preserving the market integrity in Hong Kong as an international financial centre. 2. New Public Fund Depositaries Regime effective from 2 October 2024 The SFC has updated its codes and guidelines to implement the new Type 13 regulated activity (“RA 13”) regime for public fund depositaries, which will be effective from 2 October 2024 . To ease the transition, the SFC will grant RA 13 licences or registrations to 19 depositaries under major banking or insurance groups in Hong Kong and over 300 staff members on the launch date. Under the new regime, depositaries of SFC-authorised collective investment schemes (“CISs”) must be licensed or registered with the SFC to conduct RA 13 activities. They must also comply with conduct and regulatory requirements similar to those for other regulated activities. SIGNIFICANCE: " Integrating CIS depositaries under the RA 13 regime is crucial to the SFC's strategy to enhance public fund regulation, align with international practices, and boost investor protection ." said Ms Julia Leung, CEO of the SFC. 3. New Listing Application Process in Hong Kong is streamlined On 18 October 2024, the SFC and the Stock Exchange of Hong Kong Limited (the “ Exchange” ) jointly announced the launch of an enhanced timeframe for the New Listing application process (“ Enhanced Application Timeframe” ) to further elevate Hong Kong’s attractiveness as the leading international listing venue in the region. Over the years, the SFC and the Exchange have been endeavouring to enhance the application process for New Listing applications; and the Exchange has already published a Guide for New Listing Applicants in preparing the listing. Key Highlights: Current Regulatory Framework - Under the current structure for reviewing applications, the SFC plays the roles as statutory regulator in administering the Securities and Futures (Stock Market Listing) Rules (“ SMLR” ) and the Securities and Futures Ordinance ( SFO ); the Exchange as a frontline regulator in administering the listing rules and suitability of the listing; while the Listing Committee decides if the application is approved or rejected. Enhanced Application Timeframe - The Enhanced Application Timeframe will provide greater clarity and certainty to the timeline for reviewing New Listing applications by the SFC and the Exchange. Applications that fully meet the requirements - Where an applicant and its sponsor submit a New Listing application that meet all applicable requirements and guidance under the SFO, the SMLR and/or the Listing Rules (“ Applications Fully Meeting Requirements” ), the SFC and the Exchange will individually assess if there are any regulatory concerns (“ Regulators’ Assessment” ) after a maximum of two rounds of comments; and the time taken will be no more than 40 business days , and 60 business days to satisfactorily address regulator’s comments. Upon confirmation of no material regulatory concern, the Exchange will finalise the disclosure in the listing document, which then forwarded to the Listing Committee Hearing. The entire application process expected to take around 6 months . Accelerated Timeframe for Eligible A-share Listed Companies - If an existing A-share listed company meets the following criteria when submitting a New Listing application: (a) have a minimum market capitalisation of HKD10 billion ; and (b) it can confirm, with support of legal advisor’s opinion, that it has complied with all laws and regulations, throughout the two full financial years immediately before listing application, then the A-share listed company is eligible for an accelerated timeframe for the New Listing application process (“ Accelerated Timeframe” ). Under the Accelerated Timeframe, if an eligible A-share listed company submits an Application Fully Meeting Requirements , the Regulators’ Assessment will be completed after one round of regulatory comments; and each regulator will take no more than 30 business days to complete the Regulators’ Assessment (saving 10 business days than before). If material regulatory concerns arise, longer process may require, involving a more intensive and detailed assessment. SIGNIFICANCE: The SFC and HKEX believe this initiative will support Hong Kong’s listing journey by enhancing transparency and efficiency, to further elevate Hong Kong’s attractiveness as the leading international listing venue in the region. Please refer to the above summarized table in the Appendix for your reference. 4. SFC launches a new Fund Authorization Simple Track (“FASTrack”) to bolster Hong Kong market appeal On 21 October 2024, the SFC announced the launch of the Fund Authorization Simple Track (“FASTrack”) on 4 November 2024. Under the FASTrack, SFC aims to grant fund authorisations within 15 business days after receiving complete and quality submissions from applicants. The new approach will cover simple funds from jurisdictions which have mutual recognition of funds (“MRF”) arrangements with the SFC. The SFC has issued a pamphlet detailing the new features and a circular explaining the new authorisation process. Introductory Note (1) The SFC currently processes new fund applications under a two-stream approach where applications are classified as standard (with average processing time of 1.5 months) or non-standard (of 2.5 month) which are in line with SFC targets. (2) The SFC has entered into mutual recognition of funds arrangements with jurisdictions outside Hong Kong (“MRF Jurisdictions”) which comprise of regulatory regimes providing comparable investor protection for retail investment funds similar to Hong Kong; and there is room to further expedite the authorization process. (3) A new FASTrack has been launched for simple funds domiciled and regulated in MRF Jurisdictions applying for authorization. (4) The FASTrack aims to grant fund authorizations within 15 business days from applications so as to promote efficiency and maintain competitiveness of Hong Kong. Eligible funds under FASTrack (1) A simple fund from an MRF Jurisdiction will be processed under FASTrack ( “FASTrack Fund” ) if the following criteria are satisfied: (i) Type of funds: either (i) an equity, bond or mixed fund; (ii) an exchange-traded fund or unlisted fund tracking an index or a plain vanilla index; or (iii) a feeder fund; and the funds is NOT a derivative fund. (ii) The management company of the fund is located in an MRF Jurisdiction; (iii) The investment delegate is either (a) located in an MRF Jurisdiction; or (b) is an affiliate of the management company or is currently managing other SFC-authorised funds. (2) FASTrack Funds are not expected to contain novel features, have material issues or bear wider policy implications. Processing time and performance pledges (1) FASTrack Funds are intended to cover simple funds which are already subject to home regulators’ supervision, and the SFC aims to grant authorization within 15 business days upon receipt of complete and quality submissions from the applicants. (2) Under the expected timeframe for FASTrack, the SFC will either: take up or refuse to take up an application within 5 business days upon receiving it; or grant authorization within 10 business days from the take-up date. (3) Post-vetting will be conducted by SFC to ensure the applicable authorization conditions are complied with. Implementation (1) FASTrack will take effect on 4 November 2024 ( Effective Date ) with a six-month pilot period ending on 4 May 2025. (2) Applications meeting the above criteria received on or after the Effective Date will be processed under FASTrack; or otherwise with the previous two-stream approach. (3) Relevant Information Checklist and FAQ have been updated to smoothen the launch. (4) The SFC will monitor the FASTrack during the pilot period ending on 4 May 2025. Obligations of applicants (1) Applicants must discharge their responsibility and ensure that their SFC-authorised funds comply with prevailing regulatory requirements. The SFC will take action against any non-compliance cases. SIGNIFICANCE: Ms. Christina Choi, SFC’s Executive Director of Investment Products, noted that FASTrack will provide clarity and certainty for fund launches in Hong Kong, enhancing the city’s competitiveness as a premier asset management hub. 5. e-IP application/ submission system on WINGS to be fully adopted in November On 24 October 2024, the SFC announced an extension of the parallel run period of its new online application/submission system for investment products, e-IP, by one month to 29 November 2024. Following the circular dated 8 July 2024, the SFC had launched the e-IP on its WINGS portal on 29 July 2024 to streamline and enhance the efficiency of processing new product applications, post-authorization/ registration submission to Investment Product Division (“IPD”). An initial three-month period of parallel run was in schedule while applications and submission were also accepted via the existing channels whereas the SFC has been monitoring the e-IP and gathering feedbacks from industry participants. Since new features and more advanced settings were introduced, and to facilitate these enhancements, the SFC decides to extend the parallel run period by one month to 29 November 2024. SIGNIFICANCE: Starting 30 November 2024 after the parallel run period, applications and submissions of investment products administered by IPD must be submitted via e-IP. And the current submission from IPD via the IP E-submission system will be integrated into the e-IP, including reporting of net asset values, large redemptions and suspensions of dealing. 6. SFC concludes consultation on Enhanced REIT and Market Conduct regimes On 8 Oct 2024, the SFC released consultation conclusions on proposals for a statutory scheme of arrangement and compulsory acquisition mechanism for real estate investment trusts (“REITs”) and the enhanced market conduct regime for listed collective investment schemes (“CIS”) under the Cap. 571 (“SFO”). The REIT Scheme Proposal allows REITs to conduct privatisation and corporate restructuring in an orderly manner with investor safeguards akin to those under the Companies Ordinance. The Listed CIS Proposal aims to extend SFO market misconduct rules, including insider dealing and market manipulation, to listed CIS, enhancing market integrity. SIGNIFICANCE: The proposals received general support. Ms Christina Choi, SFC’s Executive Director of Investment Products, emphasized that these measures will provide transparency, consistency, and greater investor protection. The legislative process is underway to implement these proposals. 7. SFC sets out vision to foster Fintech ecosystem in Hong Kong In the Fintech Week 2024, the SFC announced its vision for fostering a healthy and robust fintech ecosystem in Hong Kong by outlining several major areas of its initiatives to balance market development and investor protection. In a speech delivered by Dr Eric Yip, the SFC’s Executive Director of Intermediaries, he elaborated the details of the initiatives to further develop and scale up the Hong Kong’s virtual asset market. Key Initiatives: Swift Licensing for VATPs: The SFC is implementing a swift licence approval process for handling deemed-to-be-licensed VATP applicants, and expects the first batch of formal licences to be granted to deemed-to-be-licensed VATP applicants by the end of this year. Consultative Panel: To support licensed VATPs’ development of sustainable business models, a consultative panel will be launched in early 2025 for all licensed VATPs with their representative and also other stakeholders, feedbacks will be collected for SFC’s forthcoming white paper on the virtual asset industry. Regulatory Development: The SFC is working with the HKSAR Government and other regulatory bodies to develop proposals for regulating the provision of virtual asset trading services, and the provision of virtual asset custody services. Tokenisation and Project Ensemble: The SFC is a core member of the Architecture Community of Hong Kong Monetary Authority’s Project Ensemble, co-leading tokenisation initiatives for the asset management industry; the Project Ensemble plays a crucial role in establishing the necessary infrastructure for Hong Kong’s tokenisation ecosystem. SIGNIFICANCE: SFC demonstrates its commitment in moulding itself as a pioneer in the virtual assets regime, and navigating Hong Kong toward the destination. Dr Eric Yip emphasized the SFC's commitment to balancing market development with investor protection through proactive monitoring and collaboration with other agencies. Enforcement News 8. Common Red-flags of suspicious transactions from using Customer Supplied System (CSS) observed in SFC investigations During the previous month of OCT 2024, a couple of SFC investigations were found to be related to AML/CTF breaches arising from the use of Customer Supplied System (“CSS”) by the clients instead of the official Broker Supplied System (“BSS”) provided by the futures brokers. Three brokers, namely, CSC Futures (HK) Limited (" CSC "), Xinhu International Futures (Hong Kong) Co., Limited (" Xinhu ") and Zheshang International Financial Holdings Co., Limited (" ZIF "), were reprimanded and fined by the SFC, and there are similar red-flags to be alerted from the three cases taking a look at the Statement of Disciplinary Action. In retrospect of the previous quarters, there were occasional investigation cases related to use of CSS, the following observations from the case studies above are as below. Summary of the COMMON red-flags of clients using CSS: (1) The Relevant Periods covered the investigations by the SFC were similar ranging from 2016 to 2019. (2) The CSS used by the clients was the same trading software of Xinguanjia (“XGJ” or “信管家” ) which allowed the clients (the users) to create sub-accounts for the authorized users in XGJ under the clients’ own accounts maintained with the futures brokers. (3) The brokers failed to conduct proper due diligence on the CSS , namely the XGJ, used by their clients instead of the official BSS provided by the brokers. (4) The brokers failed to conduct proper due diligence on the CSS authorized users whom operated under the sub-accounts within the XGJ system. (5) The internal monitoring system and control policy were not sufficient to effectively detect suspicious transactions with the findings of large number of self-matched trades executed by the same client account (with sub-accounts behind). As a result, the broker failed to ensure compliance with the AML/CTF Ordinance, the AML Guidelines and Code of Conduct required by the SFC. (6) The large size and number of deposits made by the client accounts (with suspicious transactions) were incommensurate with the declared financial status of the clients with regard to the information provided upon account openings. (7) The follow-up enquiries conducted by the brokers were not sufficient to address the observations of abnormal large deposits made by the client accounts concerned SIGNIFICANCE: The use of CSS has long been a loophole which allows client users to create sub-accounts to hide the authentic identities of the order originators and to circumvent the ongoing monitoring by the brokers. Brokers should be alert and adopt a conservative approach when granting the use of CSS to their clients if the brokers themselves do not have effective monitoring devices for detecting suspicious transactions, and the due diligence procedures are not so effective in assessing the compliance risk behind the veil of CSS. 9. Tycoon Dickson Poon is alleged to be involved in Insider Dealing The SFC had commenced proceedings in the Market Misconduct Tribunal (MMT) against chairman of Dickson Concepts (International) Limited (“ Dickson Concepts ”), Mr Dickson Poon, and Equity Advantage Limited (“ Equity ”) for alleged insider dealing in the shares of Dickson Concepts on 15 October. The SFC also alleges that Dickson Poon and his son, Pearson Poon, caused a seven-week delay in disclosing inside information about Paypal’s acquisition of Honey Science Corporation, which significantly benefited the Company. On 20 November 2019, Paypal Holdings, Inc. (“ Paypal ”) announced on its website that it had agreed to acquire Honey Science Corporation (“ Honey ”) for approximately US$4 billion (proposed acquisition). At the material time, Dickson Concepts held 24,834,600 shares of Honey, yet the holdings were only recorded as “Unlisted equity securities” under “Other Financial Assets” without any reference to Honey. On 9 January 2020, Dickson Concepts issued an announcement disclosing to the public, among other things, that Paypal and Honey had completed the proposed acquisition on 3 January 2020, thus resulting in a gain of approximately HK$928,744,921 over Dickson Concepts’ net book value , triggering the stock price of Dickson Concepts an increase of 33.3%! Findings of SFC revealed that: (1) Dickson Poon was in possession of the inside information about the proposed acquisition, and purchased a total of 2,756,500 shares of Dickson Concepts via the securities account of Equity between 28 November and 19 December 2019 before public disclosure. (2) Dickson Concepts failed to disclose inside information about the proposed acquisition as soon as reasonably practicable, Dickson Poon and Pearson Poon caused Dickson Concepts’ breach of the disclosure of insider information requirements. (3) Dickson Poon and Pearson Poon, who were members of senior management of Dickson Concepts, became aware of the inside information about the proposed acquisition; and failed to take steps to cause the Board of Dickson Concepts to disclose the inside information to the public as soon as reasonably practicable and Dickson Concepts only issued the announcement seven weeks later on 9 January 2020. SIGNIFICANCE: It is an illustrative exemplification of insider information where the individual possessing the information can take advantage of it for making lucrative remuneration. The SFC alleges that Dickson Poon and Pearson Poon, senior management of the Company, became aware of the inside information on 21 November 2019 but failed to ensure timely disclosure. The announcement was issued seven weeks later on 9 January 2020. And the SFC’s proceedings highlight the importance of timely and accurate disclosure to maintain market integrity. Dickson Poon has denied the allegation. 10. SFC disqualifies former CFO of Fujian Nuoqi The SFC has obtained a disqualification order against Mr. Au Yeung Ho Yin, the former CFO and executive director of Fujian Nuoqi Co., Ltd. (Stock Code: 1353) (“Nuoqi”), for failing to discharge his duties. Au Yeung is disqualified from holding directorial or managerial positions in any Hong Kong corporation for three years . Au Yeung admitted failing to oversee accounting functions and ensure proper governance. The SFC's investigation revealed that around RMB225 million was withdrawn from the Company’s bank accounts without proper approval . Justice Peter Ng of the Court of First Instance stated that Au Yeung breached his duties as CFO by failing to investigate unauthorized transfers totalling RMB225 million and not alerting fellow directors. He also falsely claimed in Nuoqi's 2013 annual report that unused IPO proceeds were deposited in Hong Kong banks, while RMB160 million was actually transferred to a Mainland bank and used outside the specified scope in the listing prospectus. SIGNIFICANCE: Mr. Christopher Wilson, the SFC’s Executive Director of Enforcement, emphasized that investors rely heavily on chief financial officers of listed companies to safeguard business assets through their oversight of financial functions and reporting. This case clearly shows CFOs have a duty to investigate suspicious transactions and promptly report them to the board. CFOs must ensure all financial report disclosures are accurate and complete, as investors depend on these reports to evaluate the financial health of listed companies. 11. SFC suspends former employee of Julius Baer for several regulatory breaches On 18 October 2024, the SFC announced the suspension of Mr. Singh Amit Kishan, a former employee of Bank Julius Baer & Co. Ltd. (“ Julius Baer ”), for seven months due to regulatory breaches. Key Findings: Singh falsely claimed he had a face-to-face meeting with a client as part of the required account opening procedure. Singh advised a client to make 14 transactions that appeared unsolicited, breaching company policies. Eleven transactions involved products not permitted for solicitation, while the others lacked pre-trade approval. SIGNIFICANCE: As a result, Singh circumvented the Company’s procedures on account opening, know-your-client (“KYC”), and product suitability, preventing proper compliance monitoring. In deciding the sanction, the SFC considered the lack of evidence suggesting the client information was materially deficient and Singh’s otherwise clean disciplinary record. 12. First jail sentence for Unlicensed Activity with compensation order On 30 Oct 2024, the Eastern Magistrates’ Court has sentenced Ms. LAI Ka Yi (“ LAI ”) to two weeks’ imprisonment and ordered her to pay $98,000 as a compensation to a victim of her unlicensed activity after she was convicted of holding herself out as carrying on a business in dealing in securities without a licence from the SFF. It is also the first time the Court imposed an immediate imprisonment for an unlicensed activity offence under section 114 of the SFO ( Restriction on carrying on business in regulated activities ). Between April and 10 May 2018, Lai who was then a university student, held herself out to the victim, who she knew personally, as carrying on a business in dealing in securities. Lai enticed the victim to transfer to her bank account funds for her to invest in securities on the victim’s behalf. In the end, the victim was unable to withdraw the investment from Lai except receiving from her $2,000 in purported earnings. SIGNIFICANCE: The SFC urges the public to verify the licensing status of firms and individuals on its Public Register of Licensed Persons and Registered Institutions. According to public information, LAI was licensed and accredited to Convoy Asset Management Limited to carry on Type 1 (dealing in securities) regulated activity from 30 December 2015 to 11 January 2016, for thirteen days only. And the incidence happened between April and 10 May 2018, a relatively short episode which was two years after expiry of her previous SFC license, while the only victim was a friend of LAI personally. This marks the first time an immediate jail sentence and compensation order have been imposed for such an offence under section 114 of the Cap. 571 Securities and Futures Ordinance (“SFO”). For more details, please click on the title of the topic above. ================================= ~ Make It Right Today, Better Tomorrow ~ ================================= The Newsletter is for general information purpose only and is not intended to constitute legal or other professional advice. For enquiries, please email to support@complianceone.hk or WhatsApp us at (852) 95164607 . Unit 1104, 11/F, 299QRC, 287-299 Queen's Road Central, Sheung Wan, Hong Kong Tel: (852) 39550277 www.complianceone.hk

Thematic Cybersecurity Review of Licensed Corporations Compliance Impact Alert: Thematic Cybersecurity Review of Licensed Corporations Feb 2025 Disclaimer: Contents contained in this document including should not be regarded as a substitute legal and / or compliance advice in any circumstances and shall not be reproduced (in whole or in part), distributed or otherwise passed on to any other person without our prior written consent. Language: English version only Overview The Securities and Futures Commission (“SFC”) completed a thematic review of cybersecurity practices among 50 licensed corporations (“LCs”) in Hong Kong engaging in internet trading. The review assessed compliance with Cybersecurity Guidelines and the Code of Conduct, focusing on phishing, end-of-life (“EOL”) software, and third-party provider management. On-site inspections were conducted at 7 internet brokers, and deep-dive discussions were held with 6 globally operating LCs. The review identified eight significant breaches between 2021 and 2024, linked to issues like weak two-factor authentication (“2FA”), poor security configurations, delayed security patches, inadequate encryption, and unauthorized access to admin accounts. The SFC highlighted insufficient senior management oversight and weak cybersecurity measures as key contributors. To address rising threats, the SFC issued guidelines on phishing prevention, software management, and cloud security. **For more details, please refer to 2023/24 Thematic Cybersecurity review of LCs ** Findings of Cybersecurity Incidents and Expectations The SFC surveyed 50 LCs to assess cybersecurity practices. Key findings, impacts and expectations are summarized below: Findings Impact Expections 1. Ransomware Attacks One LC's systems and data were encrypted, requiring a full rebuild to resume trading. Deploy anti-malware, avoid embedded hyperlinks, conduct training, and establish incident handling. 2. Phishing Vulnerabilities A ransomware attack traced to a phishing email encrypted an LC’s systems, necessitating a rebuild. Conduct simulations and ensure effective reporting procedures. 3. EOL Software Management EOL software increased risks of unauthorized access to critical systems. Maintain IT asset inventories, monitor software validity, and cease using EOL systems. 4. Vulnerability to Unauthorized Access Cybercriminals exploited unpatched VPNs and unsecured ports to access internal networks. Enforce least-privilege access, 2FA, VPNs, session timeouts, and monitor third-party access. 5. Third-Party Provider Management A cyber-attack on a provider disrupted clearing services; some LCs had non-compliant trading systems. Conduct due diligence, establish SLAs, monitor performance, and include providers in contingency plans. 6. Cloud Security Weak network policies increased data leakage risks. Secure infrastructure, enforce access controls, manage API keys, and back up data securely. Actions and Recommendations LCs must ensure senior management (e.g. MIC-IT) addresses cybersecurity risks by: 1. Appointing qualified staff and allocating resources. 2. Reviewing and approving risk management policies. 3. Conducting regular cybersecurity reviews and addressing vulnerabilities. 4. Restricting access to sensitive systems and enforcing secure remote access. 5. Maintaining and testing contingency plans. Requirements are effective immediately, but the SFC will adopt a practical approach for LCs needing time to upgrade systems. Future plans include a comprehensive review of cybersecurity requirements to develop a broader framework for all LCs. How We Can Help Our team comprises experienced professionals with deep expertise in compliance, risk management, and policy review and development in identifying gaps between the regulatory expectations in the circular and your current policies and procedures. We understand the complexities of regulatory requirements and provide tailored solutions to meet your specific needs and close any material gaps. Our expertise ensures adherence to regulatory standards and enhances overall compliance practices. If you have any questions, please feel free to Contact Us .

財經事務及庫務局 (“財庫局”) 及證券及期貨事務監察委員會 (“證監會”) 聯合發佈了一份公眾諮詢檔，旨在收集對規管香港虛擬資產交易服務的立法建議的回饋意見。The Financial Services and the Treasury Bureau (“FSTB”) and the Securities and Futures Commission (“SFC”) have jointly released a public consultation document to gather feedback on a legislative proposal to regulate virtual asset (“VA”) dealing services in Hong Kong. 有關規管虛擬資產交易的立法建議公眾諮詢 [30 June 2025] I. 背景 財經事務及庫務局 (“ 財庫局 ”) 及證券及期貨事務監察委員會 (“ 證監會 ”) 聯合發佈了一份公眾諮詢檔，旨在收集對規管香港虛擬資產交易服務的立法建議的回饋意見。此前，政府於2024年2月至4月就虛擬資產場外交易 (“ OTC ”) 服務進行了諮詢 [1] 。根據利益相關者的意見，諮詢範圍已擴大至涵蓋更廣泛的虛擬資產交易活動，按照「相同活動、相同風險、相同規管」原則下建立虛擬資產規管框架。 目前的提案以2024年場外交易市場諮詢為基礎，旨在透過引入虛擬資產交易服務牌照制度來解決這些差距。該提案體現了香港在2022年10月和2025年6月的政策聲明中概述的更廣闊的願景，即在降低風險的同時，建立一個全面的數位資產生態系統。 公眾意見徵詢截止日期為2025年8月29日，屆時將向立法會提交法案。 II. 擬議發牌制度 1) 誰需要獲得牌照 ? 任何人士在業務過程中提供虛擬資產交易服務，當中涉及訂立或要約訂立協議，或誘使或企圖誘使另一人訂立或要約訂立協定，目的是取得、處置、認購或包銷虛擬資產；或協定的目的或佯稱目的是使任何一方從虛擬資產的收益或參照虛擬資產價值的波動獲得利潤。 此制度將涵蓋所有虛擬資產交易服務，無論該等服務是通過實體店鋪及/或其他平臺提供。 就銀行和儲值支付工具 (“ SVF ”) 而言，經諮詢香港金融管理局 (“ 金管局 ”) 後，需要向證監會註冊，以在香港提供任何虛擬資產的交易服務。 2) 業務類型和業務模式： i. 簡單交易 : 以一種虛擬資產轉換另一種虛擬資產，或以虛擬資產轉換金錢 (或以金錢轉換虛擬資產) 。 ii. 較為複雜的虛擬資產交易活動 :經紀活動、大宗交易活動和顧問[2]或資產經理[3]從事的其他相關活動。 3) 豁免： i. 獲金管局發牌及(ii)在一級市場上要約提供或贖回其發行的穩定幣的穩定幣發行人將會被豁免。 ii. 個人與個人(peer-to-peer)之間不牽涉中介人的虛擬資產交易 III. 擬公司架構及規管要求 1) 公司架構 i. 公司架構 ：申請人(銀行除外)必須是(i)在香港成立或根據《公司條例》在香港註冊，並有固定營業地點的公司。 ii. 處所 ：合適處所儲存簿冊及記錄。 iii. 適當人選測試 ：包括申請人(或其董事、大股東或最終擁有人)，評估其犯罪記錄、財務穩定性和合規記錄。 iv. 負責人員 (RO) ：至少兩名經證監會批准的RO，具備監管知識和行業經驗。 2) 規管要求 i. 財政資源 ： 最低實繳資本：500萬港元。 流動資本：300萬港元(視業務模式而定)。 超額流動資本須足以支付12個月的營運開支。 ii. 散戶投資者可交易的虛擬資產 : 僅限於高流動性代幣和金管局發牌的穩定幣，與VATP標準一致。 iii. 其他服務 ： 顧問、資產管理、質押等，需根據量身定制的規管獲得單獨批准。 iv. 打擊洗錢及恐怖分子資金籌集 (“ AML/CFT ”)合規 ： 包括客戶盡職調查 (CDD)、記錄保存和使用區塊鏈分析工具進行交易監控。 v. 客戶資產保護 ： 持牌人應妥善保障其客戶資產，並採取額外措施，包括妥善分隔客戶資產，並由香港持牌虛擬資產託管人保管。 vi. 投資者保障 ： 評估客戶虛擬資產知識、提供培訓、風險分析、設定風險限額、確保適合性及管理利益衝突。 vii. 風險管理 ： 制定適當並與其業務規模和複雜程度相稱的風險管理政策和程序，以處理其活動可產生的洗錢及恐怖分子資金籌集和其他風險。 viii. 資料通知及財務披露 ： 提交經審計的帳目、錢包地址和業務詳情 IV. 運營方面 1) 非獲證監會發牌的VATP： 正在考慮允許通過受海外監管的VATP或流動性提供者進行交易，但需採取加強盡職調查和風險披露等保障措施（有待進一步諮詢）。 2) 託管： 客戶虛擬資產必須由證監會發牌的虛擬資產託管人持有，與2025年6月27日啟動的虛擬資產託管人諮詢相一致 [4] 。 3) 監控： 持牌人須採用適當的科技方案(例如區塊鏈分析工具)，以便追蹤虛擬資產的來源和去向。 V. 發牌及過渡安排 1) 牌照持續期限： 無期限，有效直至被撤銷（例如因不當行為）。 2) 無過渡安排： 原有的虛擬資產交易服務提供者必須在制度生效日期前申請牌照，沒有自動過渡批准。 3) 加快發牌程序： 適用於獲證監會發牌的VATP，及正在提供虛擬資產交易服務的持牌法團(視乎情況)。 4) 費用： 參照《證券及期貨條例》下的第1類受規管活動，例如持牌法團的申請費和年費為4,740港元。 VI. 監管權力及紀律處分 1) 監管權力 監管機構 授權權力 證券及期貨事務監察委員會 (“ 證監會 ”, “ SFC” ) 制定標準、施加條件、進行檢查、調查違規行為並採取紀律措施。 香港金融管理局 (“ 金管局 ”, “ HKMA” ) 監管銀行和SVF，擁有類似證監會的監管權力。 2) 紀律處分 違規行為 紀律處分 i. 無牌經營 可罰款 500萬港元 及 監禁7年 。 ii. 無牌行銷 可罰款 5萬港元 及 監禁6個月 。 iii. 違反AML/CFT規定 可罰款 100萬港元 及 監禁2年 。 iv. 欺詐行為 可罰款 1,000萬港元 及 監禁10年 。 v. 失實陳述 可罰款 100萬港元 及 監禁7年 。 vi. 不當行為 暫停或撤銷牌照、譴責或罰款高達 1,000萬港元 。 VII. 徵詢與下一步 公眾可以於2025年8月29日前通過以下方法提交意見： 電郵 ： vadealing-consult@fstb.gov.hk ;或 郵寄至 ：香港中環添馬添美道政府總部24樓財經事務及庫務局財經事務科第五組 政府將分析回饋後敲定最終方案。 VIII. 資料參考: 有關規管虛擬資產交易的立法建議 - 公眾諮詢 英文版: https://www.fstb.gov.hk/fsb/en/publication/consult/doc/VADEALING_consultation_paper_en.pdf 中文版: https://www.fstb.gov.hk/fsb/tc/publication/consult/doc/VADEALING_consultation_paper_tc.pdf [1] https://www.fstb.gov.hk/fsb/tc/publication/consult/doc/VAOTC_consultation_paper_tc.pdf [2] 顧問可從事的活動包括提供意見，以及接受買賣虛擬資產的指示等。 [3] 資產經理可從事的活動包括為其本身的客戶管理虛擬資產組合時，向交易商發出交易指示等。 [4] https://www.fstb.gov.hk/fsb/tc/publication/consult/doc/VACUSTODY_consultation_paper_tc.pdf Summary on Public Consultation on Legislative Proposal to Regulate Dealing in Virtual Assets I. Introduction The Financial Services and the Treasury Bureau (“ FSTB ”) and the Securities and Futures Commission (“ SFC ”) have jointly released a public consultation document to gather feedback on a legislative proposal to regulate virtual asset (“ VA ”) dealing services in Hong Kong. This follows an earlier consultation [1] from February to April 2024 focused on over-the-counter (“ OTC ”) VA trading services. Based on stakeholder input, the scope has been expanded to encompass a broader range of VA dealing activities, aligning with Hong Kong’s commitment to a robust digital asset regulatory framework under the "same activity, same risks, same regulation" principle. The current proposal builds on the 2024 OTC consultation and aims to address these gaps by introducing a licensing regime for VA dealing services. It reflects Hong Kong’s broader vision, outlined in policy statements from October 2022 and June 2025, to foster a comprehensive digital asset ecosystem while mitigating risks. Public comments are invited until 29 August 2025, with a bill to be introduced to the Legislative Council thereafter. II. Proposed Licensing Regime 1) Who Needs to Be Licensed? Any person, by way of business, making or offering to make an agreement with another person, or inducing or attempting to induce another person to enter into or to offer to enter into an agreement in respect of the following would require a license granted by or registration with the SFC. This regime will cover all VA dealing services irrespective of whether the services are provided through a physical outlet and/or other platforms. In respect of (i) banks and (ii) stored value facilities (“ SVFs ”), they need to be registered with the SFC (in consultation with the Hong Kong Monetary Authority (“ HKMA ”)) for providing services of dealing in any VAs in Hong Kong. 2) Business Types and Business Models: i. Simple Dealing Services: VA-to-VA or VA-to-fiat conversions (e.g. exchanging Bitcoin for Ethereum or HKD). ii. Complex Dealing Services: Brokerage, block trading, and activities by advisors[2] or asset managers[3]. 3) Exemption: i. stablecoin issuers who (i) are licensed by the HKMA and (ii) conduct offering or redemption of the stablecoins they issue in the primary market. ii. peer-to-peer trading of VAs between individuals where no intermediary is involved. III. Regulatory Requirements 1) Eligibility i. Corporate Structure: Applicants (except banks) must be locally incorporated or registered in Hong Kong under the Companies Ordinance, with a permanent place of business. ii. Premises: Suitable facilities for record-keeping. iii. Fit-and-Proper Test: Applies to applicants, substantial shareholders, and key personnel, assessing criminal history, financial stability, and compliance records. iii. Responsible Officers (“ RO ”): At least two SFC-approved ROs with regulatory knowledge and industry experience. 2) Key Obligations i. Financial Resources: Minimum paid-up capital: HK$5 million. Minimum liquid capital: HK$3 million (varies by business model). Excess liquid capital to cover 12 months of operating expenses. ii. Allowed VAs for Retail Investors: Limited to highly liquid tokens and HKMA-licensed stablecoins, mirroring VATP standards. iii. Other Services: Advisory, asset management, staking, etc. require separate approvals under tailored regulations. iv. AML/CFT Compliance: Includes customer due diligence (“CDD”), record-keeping, and transaction monitoring with blockchain analytic tools. v. Client Asset Protection: Segregation of assets and safekeeping with licensed VA custodians in Hong Kong. vi. Investor Safeguards: Assessing client VA knowledge, providing training, risk profiling, setting exposure limits, ensuring suitability, and managing conflicts of interest. vii. Risk Management: Policies to address ML/TF and operational risks. viii. Reporting: Submission of audited accounts, wallet addresses, and business details. IV. Operational Aspects 1) Non-SFC-Licensed VATPs: An option is under consideration to allow dealing via overseas-regulated VATPs or liquidity providers, with safeguards like enhanced due diligence and risk disclosures (subject to further consultation). 2) Custody: Client VAs must be held with SFC-licensed or registered VA custodians in Hong Kong, aligning with a separate VA custodian consultation launched on 27 June 2025 [4] . 3) Monitoring: Licensees must track VA origins and destinations using advanced technological solutions. V. Licensing and Transitional Arrangements 1) License Type: Open-ended, valid until revoked (e.g. for misconduct). 2) No Deeming Arrangement: Existing providers must apply for a license by the regime’s commencement date, with no automatic transitional approval. 3) Expedited Process: Available for SFC-licensed VATPs and regulated entities already offering VA dealing services. 4) Fees: Benchmarked to Type 1 regulated activity under the Securities and Futures Ordinance (“ SFO ”), e.g. HK$4,740 application fee and annual fee for licensed corporations. VI. Powers and Sanctions 1) Regulatory Powers Regulator(s) Authorised Power Securities and Futures Commission ( SFC ) Sets standards, imposes conditions, conducts inspections, investigates non-compliance, and applies disciplinary measures. Hong Kong Monetary Authority ( HKMA ) Frontline regulator for banks and SVFs, with similar supervisory powers. 2) Sanctions Violation(s) Sanction(s) i. Unlicensed Operations HK$5 million fine and 7 years imprisonment. ii. Unlicensed Marketing HK$50,000 fine and 6 months imprisonment. iii. AML/CFT Breaches HK$1 million fine and 2 years imprisonment. iv. Fraudulent Behavior HK$10 million fine and 10 years imprisonment. v. Misrepresentation HK$1 million fine and 7 years imprisonment. vi. Misconduct License suspension/revocation, reprimands, or penalties up to HKD$10 million . VII. Next Steps The Public can submit the comment on or before 29 August 2025: Via email: vadealing-consult@fstb.gov.hk ; or Post: Division 5, Financial Services Branch, Financial Services and the Treasury Bureau, 24/F, Central Government Offices, Tim Mei Avenue, Tamar Central, Hong Kong. The final proposals to be determined after analyzing feedback from the Public. VIII. Reference Materials Full Consultation Paper: English: https://www.fstb.gov.hk/fsb/en/publication/consult/doc/VADEALING_consultation_paper_en.pdf Chinese: https://www.fstb.gov.hk/fsb/tc/publication/consult/doc/VADEALING_consultation_paper_tc.pdf [1] https://www.fstb.gov.hk/fsb/en/publication/consult/doc/VAOTC_consultation_paper_en.pdf [2] An advisor may, among others, provide advice and also take an order to purchase or sell VAs. [3] Asset managers may, among others, place trade orders to dealers in the course of managing their own clients’ portfolios of VAs. [4] https://apps.sfc.hk/edistributionWeb/api/consultation/openFile?lang=EN&refNo=25CP7 天匯合規顧問有限公司 ComplianceOne Consulting Limited 2025年6月30日

The topics discussed in this monthly newsletter for insurance are as follows: ComplianceOne Insurance Newsletter – Feb 2025 The topics discussed in this monthly newsletter are as follows: IA to Facilitate the Caps on Commission Rates Hong Kong to License Mainland Insurers for Greater Bay Area Retirement Plans Targeting Middle-Income Residents ICAC investigates puppet insurance agent case involving HK$52 million IA News Updates 1. IA to Facilitate the Caps on Commission Rates The Insurance Authority ( IA ) issued a Practice Note to address concerns that overly optimistic benefit illustrations for participating life insurance policies, influenced by aggressive investment assumptions, could mislead consumers. Under existing guidelines (GL16 and GL28), insurers must provide transparent, non-misleading projections of policy returns, balancing guaranteed and non-guaranteed benefits. The update, effective 1 July 2025 , mandates illustration rate caps of 6.0% for HKD-denominated policies and 6.5% for other currencies on projected surrender values (Customers’ IRR) to curb unrealistic expectations. These caps apply to Customers' IRR on projected surrender values across all payment modes, policy terms, and scenarios (base, optimistic, pessimistic). Illustration rate caps 6.0% for products denominated in Hong Kong Dollar (HKD). 6.5% for products denominated in other currencies. If the underlying IRR is below the cap, insurers must use the actual IRR (per best estimates under GL28). Caps do not limit underlying investment assumptions but guide illustration realism. Exemption: Caps do not apply to re-illustrations of in-force policies, but re-illustrations must not be used for aggressive sales tactics. SIGNIFICANCE: This Practice Note reflects a proactive regulatory stance to balance innovation, competition, and consumer trust in Hong Kong’s insurance sector. Insurers should begin preparing now to ensure compliance by July 2025. And the Consumers benefit from clearer, more reliable projections, fostering informed decisions and aligning with the principle of "treating customers fairly." 2. Hong Kong to License Mainland Insurers for Greater Bay Area Retirement Plans Targeting Middle-Income Residents The Insurance Authority ( IA ) plans to introduce new service providers, primarily large mainland Chinese insurers, to offer integrated retirement and elderly care insurance products targeting middle-class residents seeking to retire in the Greater Bay Area (GBA). This initiative, led by Mr Marty Lui Yu-kwok, the IA’s Executive Director for Long-term Business, aims to address growing demand from Hong Kong residents for northbound retirement options, driven by trends in cross-border consumption and aging populations. The proposed insurance products would provide one-stop solutions covering accommodation, healthcare, and other elderly care services in mainland China. These providers, which currently lack Hong Kong licenses, are expected to bring specialized expertise and value to the local market. The IA aims to issue licenses by the end of 2024, with product launches following shortly after. The target demographic includes middle-income earners with monthly salaries between HK$30,000-50,000, reflecting demand for affordable, high-quality retirement options in the GBA. This move aligns with broader regional integration efforts and responds to challenges posed by Hong Kong’s aging population and high local elderly care costs. The IA emphasizes collaboration with mainland regulators to ensure compliance and consumer protection. Market News 3. ICAC investigates puppet insurance agent case involving HK$52 million The Independent Commission Against Corruption (“ ICAC ”) investigated a corruption complaint involving "puppet insurance agents," leading to the conviction of a former insurance branch manager and 10 puppet agents for conspiracy to defraud and money laundering. Case Details: Between 2016 and 2020, the former branch manager of an insurance company recruited individuals to act as puppet insurance agents for two insurance companies. The insurance companies approved these 478 policy applications and paid commissions, bonuses, and allowances totaling over 52 million HKD to the defendants—exceeding 22 million HKD from one company and 29 million HKD from the other. Related insurance policies were high-commission products, and the majority lapsed due to non-payment of premiums. On 11 February 2025, the District Court sentenced the former branch manager to 46 months’ imprisonment. The 10 puppet agents received prison terms ranging from 11 to 22 months. SIGNIFICANCE: The convictions demonstrate the serious legal consequences for individuals involved in fraudulent activities within the insurance industry. The prison sentences imposed reflect the severity of the offenses and serve as a warning to others against engaging in similar misconduct. [End of ComplianceOne Insurance Newsletter –February 2025] For more details, please click on the title of the topic above. ================================= ~ Make It Right Today, Better Tomorrow ~ ================================= The Newsletter is for general information purpose only and is not intended to constitute legal or other professional advice. For enquiries, please email to support@complianceone.hk or WhatsApp us at (852) 95164607 . Unit 1104, 11/F, 299QRC, 287-299 Queen's Road Central, Sheung Wan, Hong Kong Tel: (852) 39550277 www.complianceone.hk

The topics discussed in this monthly newsletter for insurance are as follows: ComplianceOne Insurance Newsletter – Nov 2024 The topics discussed in this monthly newsletter are as follows: 1. Asian Insurance Forum 2024: Navigating Global Volatility 2. CPD Course for Insurance Brokers on Grandfathered ILAS Policies 3. The SFC Announces First Batch of Brokers for Wealth Management Connect Pilot Scheme and Insights on Insurance Connect IA News Updates 1. Asian Insurance Forum 2024: Navigating Global Volatility The IA's annual flagship event, the Asian Insurance Forum (“AIF”), will be held on 10 December 2024 , themed “Rising to the Challenge amidst Global Volatility.” This event will feature prominent speakers from the insurance and financial sectors, as well as regulators and government officials from Hong Kong and around the world. Keynote speakers include Mr. John Lee, Chief Executive of the HKSAR, Mr. Paul Chan, Financial Secretary of the HKSAR, and Mr. Jonathan Dixon, Secretary General of the IAIS. Panel discussions will cover: Global supervisory priorities. Strengthening the headquarters economy. Insurance solutions in wealth management, along with a dialogue with IA leadership. Participants can register online to join the forum virtually for free. For more details and the full program, visit the AIF 2024 website . 2. CPD Course for Insurance Brokers on Grandfathered ILAS Policies The IA published the circular on 8 November 2024 which provides additional details on the CPD course required for compliance with the Grandfathering Arrangements. From 1 October 2024, licensed insurance brokers offering advisory or discretionary investment services for ILAS Policies must meet new competency requirements as per the Practice Note . Grandfathering Arrangements: Licensed insurance brokers unable to meet the new requirements by 1 October 2024 can continue servicing policies issued before this date (Grandfathered ILAS Policies) until 31 July 2027, provided they comply with the Additional CPD requirement. This entails completing 2 additional CPD hours annually in the following periods: 1 August 2024 to 31 July 2025 1 August 2025 to 31 July 2026 1 August 2026 to 31 July 2027 Firs run of the Course for Insurance Brokers on Grandfather ILAS Policies The Hong Kong Securities and Investment Institute (“HKSI”), in collaboration with the Professional Insurance Brokers Association (“PIBA”) and The Hong Kong Confederation of Insurance Brokers (“CIB”), is launching the first Course on 26 November 2024 , which fulfills the Additional CPD requirement under the Grandfathering Arrangements established by IA. Market News 3. SFC Announces First Batch of Brokers for Wealth Management Connect Pilot Scheme and Insights on Insurance Connect SFC has announced that 14 LCs are now eligible to participate in the Cross-boundary Wealth Management Connect Pilot Scheme (“WMC”) in the Guangdong-Hong Kong-Macao Greater Bay Area (“GBA”). This scheme enhances connectivity between Hong Kong and Mainland China, offering new business opportunities for financial services. Impact on Insurance Brokers and Future of Insurance Connect The success of the WMC is seen as a positive indicator for the potential implementation of similar mechanisms, such as the anticipated Insurance Connect. This would allow Hong Kong and Macau insurance companies to sell insurance products directly to Mainland residents without establishing local branches. However, current Mainland regulations conflict with this approach, and a pilot for Insurance Connect is not yet feasible. Licensed insurer(s), insurance broker companie(s) shall see the WMC as a best practice to get ready for the eventual establishment of Insurance Connect. By familiarizing themselves with cross-boundary operations and regulatory requirements, they can smoothly transition once the Insurance Connect is approved. SIGNIFICANCE: Despite the delay in Insurance Connect, preparations for establishing insurance after-sales service centers in Nansha and Qianhai are in their final stages. These centers will offer policy management and claims services for Hong Kong policyholders in the GBA. [End of ComplianceOne Insurance Newsletter – November 2024] For more details, please click on the title of the topic above. ================================= ~ Make It Right Today, Better Tomorrow ~ ================================= The Newsletter is for general information purpose only and is not intended to constitute legal or other professional advice. For enquiries, please email to support@complianceone.hk or WhatsApp us at (852) 95164607 . Unit 1104, 11/F, 299QRC, 287-299 Queen's Road Central, Sheung Wan, Hong Kong Tel: (852) 39550277 www.complianceone.hk

天匯合規協助大公國際香港成功申請香港信貸評級服務牌照（10號牌） 天匯合規協助大公國際香港成功申請 香港信貸評級服務牌照（10號牌） 天匯合規顧問有限公司(「天匯合規」) 協助大公國際資信評估有限公司（「大公國際」）旗下的香港全資子公司：大公國際香港有限公司（「大公國際香港 」） (中央編號: BUK036) 成功向香港證券及期貨事務監察委員會（「香港證監會」）申請獲准經營第10類受規管活動：信貸評級服務牌照（即10號牌）。大公國際香港成為近四年多以來香港證監會唯一批准的10號牌的公司，也是全香港第九家獲香港證監會批准並持有10號牌的公司（同時為第四家來自中國內地的信用評級公司）。大公國際香港於2023年第四季首次遞交申請，於2024年4月成功取得香港證監會下發的原則性核准函（Approval-in-principle, “AIP”），並於5月27日正式獲批牌照。 大公國際香港的控股股東為大公國際，成立於1994年，是中國人民銀行和原國家經貿委共同批准成立的全國性信用評級機構。成立30年以來，大公國際先後對70多個行業的近萬家企業進行信用評級，是最早在中國內地開展信用評級業務的公司之一，為多家工商企業、金融機構、主權國家、國際公司、資產證券化類產品等提供評級服務，位居產業前列。為提升公司在國際評級競爭中的地位，並滿足其自身發展需求，於2023年6月成立了大公國際香港，該公司主要專注於提供企業和金融機構評級服務以及結構化產品評級服務。 天匯合規作為大公國際香港的合規顧問，為本項目提供了全方位的合規服務，包括提供申請方案設計、合規建議諮詢、內部監控流程的設計、以及協助回復香港證監會對大公國際香港的牌照申請提問的回饋等綜合服務。天匯合規合夥人Tao Wong及Tommy Chung領銜的合規顧問團隊專注於香港境內的金融牌照申請、反洗錢系統、以及各類型合規顧問服務。天匯合規成立7年多以來已成功為數十家公司申請成為持牌法團, 以及為數以百計的各類型金融機構提供不同類型的合規顧問服務, 在香港首屈一指。 大公國際香港這次獲批出信貸評級服務牌照, 特别感謝香港證監會 (SFC) 以及香港投資推廣署 (InvestHK) 對本次申請活動的關注和支持。 2024年5月27日 ComplianceOne helped Dagong Global Hong Kong successfully apply for Type 10 license (providing credit rating services) in Hong Kong ComplianceOne Consulting Limited ("ComplianceOne") assisted Dagong Global Credit Rating Co., Ltd. ("Dagong Global”) 's wholly-owned subsidiary in Hong Kong, Dagong Global Hong Kong Limited ("Dagong Global Hong Kong"), in successfully applying from the Securities and Futures Commission of Hong Kong ("SFC") for approval of Type 10 regulated activity: credit rating services license. Dagong Global Hong Kong became the only company approved by the SFC for Type 10 license in nearly four years, and the ninth company in Hong Kong to be approved and hold a Type 10 license (also the fourth credit rating agency from mainland China). Dagong Global Hong Kong submitted its application in the fourth quarter of 2023, obtained the SFC's approval-in-principle (AIP) from the SFC in April 2024, and obtained the license on 27th May 2024. Dagong Global, the controlling shareholder of Dagong Global Hong Kong, was established in 1994. It is a nationwide credit rating agency approved jointly by the People's Bank of China and the former State Economic and Trade Commission. Over the past 30 years, Dagong Global has conducted credit ratings for nearly ten thousand enterprises in over 70 industries, making it one of the earliest companies to engage in credit rating business in mainland China. It provides rating services for various industrial and commercial enterprises, financial institutions, sovereign states, international corporations, asset securitization products, and more, ranking among the industry leaders. To enhance its position in the international rating competition and meet its own development needs. Dagong Global established Dagong Global Hong Kong in June 2023, which primarily focuses on providing rating services for enterprises and financial institutions, as well as structured product rating services in Hong Kong. ComplianceOne serves as the compliance consultant for Dagong Global Hong Kong, providing comprehensive compliance services for this project. This includes offering assessment of the application, compliance advisory consultations, designing internal control processes, and assisting in responding to inquiries from SFC of Hong Kong regarding Dagong Global Hong Kong's license application. The compliance advisory team, led by partners Tao Wong and Tommy Chung, focuses on financial license applications in Hong Kong, anti-money laundering (AML) systems, and various types of compliance consulting services. Over the past seven years, ComplianceOne has successfully assisted dozens of companies in becoming licensed corporations and provided various types of compliance consulting services to hundreds of financial institutions, establishing itself as a leader in Hong Kong. Dagong Global Hong Kong and ComplianceOne express special gratitude to the SFC and InvestHK for their attention and support during the application process for the Type 10 license. 27th May 2024

The topics discussed in this monthly newsletter are as follows: ComplianceOne Newsletter – May 2022 ComplianceOne Newsletter – May 2022 The topics discussed in this monthly newsletter are as follows: 1. ETF Connect marks another milestone in mutual market access 2. Court orders Pyramid and Ponzi scheme fraudsters to compensate investors 3. SFC bans Ho Pak Hay for life MARKET NEWS 1. ETF Connect marks another milestone in mutual market access The Securities and Futures Commission (SFC) and the China Securities Regulatory Commission (CSRC) today announced details for the implementation of plans to include eligible exchange-traded funds (ETFs) in Stock Connect. According to the joint announcement, the principal arrangements for ETF Connect will follow the existing fund operations, regulations and operational models governing trading and clearing in the two markets. “ ETF Connect is another milestone in the expansion of mutual market access between Hong Kong and Mainland China,” said Mr. Ashley Alder, the SFC’s Chief Executive Officer. Significance: Investors in both markets are provided with more choices, and help foster a healthy development of ETF by expanding the investor base and improving liquidity in the market. ENFORCEMENT NEWS 2. Court Orders Pyramid and Ponzi scheme fraudsters to compensate investors Under the scheme, DFRF and its founder Filho falsely claimed that DFRF would soon be listed in the US, and persuaded a number of Hong Kong investors to acquire “membership units”. DFRF also falsely claimed that investors would be offered the option to convert their units into preferred shares of DFRF at certain price. In December 2016 and March 2017, the SFC obtained interim injunctions to freeze the assets of DFRF in their two bank accounts. And the Court has appointed administrators to receive and distribute the proceeds of the scheme remaining in the two bank accounts – approximately totalling $2.8 million – for the benefit of the investors on a pro rata basis. Significance: The global scale of such a scam as the Ponzi scheme is really unprecedented in recent decades. The scheme camouflaged itself as a type of investment scheme where the founders (basically the "crooks") stole money from investors and masked the theft by funneling returns to clients from funds contributed by newer investors. 3. SFC bans Ho Pak Hay for life The SFC has banned Mr. Ho Pak Hay, a former licensed representative of KGI Asia Limited (KGI) and KGI Futures (Hong Kong) Limited (KGI Futures), from re-entering the industry for life. It was found that Ho had misappropriated and misused funds totalling $1.8 million from the clients between 2018-2019; instead of making investments for the clients , Ho had spent the funds on gambling, and had also issued dishonoured cheques to the clients as repayment of funds. The SFC considers that Ho is not a fit and proper person to be licensed, and has decided that a life ban on Ho is appropriate and commensurate with the gravity of his conduct. Significance: Ho had misappropriated client money and undermined the fundamental principles of GP1 of “Honesty and Fairness” as a licensed person, and GP8 of “Client Assets” being adequately safeguarded. For more details, please click on the title of the topic above. ================================= ~ Make It Right Today, Better Tomorrow ~ ================================== The Newsletter is for general information purpose only and is not intended to constitute legal or other professional advice. For enquiries, please email to support@complianceone.hk or call us at (852) 39550277. Unit 1104, 11/F, 299QRC, 287-299 Queen's Road Central, Sheung Wan, Hong Kong Tel: (852) 39550277 www.complianceone.hk To unsubscribe, please simply reply with “ I don’t like to know more about Compliance ”.