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The topics discussed in this monthly newsletter for Licensed Corporations are as follows: ComplianceOne Newsletter – April 2026 The topics discussed in this monthly newsletter are as follows: Regulatory Updates SFC unveils new regulatory framework to allow secondary trading of tokenized SFC-authorized investment products = Market News Granting of stablecoin issuer licenses SFC joins global regulatory effort again to combat unlawful activities of finfluencers New speech by Kelvin Wong: Keynote speech at Deloitte's Hong Kong CFO Forum Enforcement News - Intermediaries SFC sanctions Impression Investment Limited and its former responsible officer over staff trading activities SFC reaches agreement with PricewaterhouseCoopers for shareholder compensation of HK$1 billion regarding false financial statements of China Evergrande Group for 2019 and 2020 Enforcement News - Listed Companies SFC commences legal proceedings against former senior executives of China Automotive Interior Decoration Holdings Limited and its subsidiary Regulatory Updates 1. SFC unveils new regulatory framework to allow secondary trading of tokenized SFC-authorized investment products On 20 April 2026, the SFC has introduced a new regulatory framework to pilot secondary trading of tokenized SFC-authorized investment products. The SFC will primarily facilitate secondary trading of tokenized open-ended funds on licensed virtual asset trading platforms (“ VATPs ”), expanding access for retail investors. In a keynote speech by Ms LEUNG, she mentioned “Our new framework marks another major milestone on Hong Kong’s journey to build out a fully integrated, innovative and scalable digital asset ecosystem with robust investor safeguards. This initiative allows a traditional securities product, once tokenized, to be traded in the evening and on weekends, and supported by the use of regulated stablecoins and tokenized deposits to facilitate round-the-clock liquidity, satisfying demand of investors reacting to an increasingly fast-moving and uncertain market environment.” Below highlights the requirements for secondary trading of tokenized SFC-authorized investment products in Hong Kong. Category Key Requirements Scope and Objective The circular sets out requirements for allowing public secondary trading of tokenized SFC-authorized investment products in Hong Kong. Its goals are to enhance product tradability and integrate them in the Web3.0 ecosystem. The initial focus is on SFC-authorized open-ended funds. Permitted Trading Channel Secondary trading for retail investors is to be conducted via on-platform trading provided by SFC-licensed VATPs operators. The trading must follow existing VATP guidelines for virtual asset trading. Fair Pricing Controls SFC-licensed VATPs must implement controls to ensure fair pricing, including: Price Deviation Alert : Alert investors if the execution price significantly deviates from the product’s real-time indicative Net Asset Value (“ NAV ”). Primary Market Alternative : Inform investors of the option to subscribe/redeem in the primary market instead. System Controls : Implement pre-trade and post-trade monitoring to prevent excessive price fluctuations and market manipulation. Liquidity Provision Product Providers : Must use best endeavours to arrange for at least one market maker per product, monitor liquidity, appoint distributors, and facilitate transfers between primary and secondary markets. SFC-licensed VATPs : Responsible for conducting due diligence on and regularly monitoring the performance of market makers on their platforms. All parties : (Product Providers, VATPs, Distributors, Market Makers) must ensure compliance with all applicable laws and regulations. Investor Disclosure Offering documents and trading platforms must clearly disclose: Risks : Liquidity risk, price deviation risk, price fragmentation risk, and market maker resilience risk. Trading & Market Making Details : Operational flow, settlement process, fee ranges, and market making arrangements. Suspension Circumstances : Conditions under which secondary trading may be suspended. Real-time Data : Platforms must provide real-time/near-real-time indicative NAV and the last official NAV. Client Onboarding SFC-licensed VATPs and Connecting Brokers must prominently highlight the associated risks to clients and obtain client confirmation that they understand these risks before onboarding them for secondary trading. Notification Obligations Product Providers : Must give the SFC early alerts of any issues affecting the product’s operations or liquidity and immediately notify the SFC and investors if primary/secondary market dealing or market making activities cease or are suspended. Intermediaries (VATPs, Brokers): Must notify and discuss their proposals with their SFC case officers before engaging in secondary trading business for the first time, and for any subsequent material changes. * For more details, please refer to the circular on secondary trading of tokenized SFC-authorized investment products. SIGNIFICANCE: The new regulatory framework introduces new pathways to operate but also imposes specific investor protection and operational obligations to those that choose to engage in the business of secondary trading for tokenized SFC-authorized investment products. Market News 2. Granting of stablecoin issuer licenses On 10 April 2026, the HKMA has granted stablecoin issuer licensed to Anchorpoint Financial Limited (a joint venture established by Standard Chartered Bank (Hong Kong) Limited (“SCBHK”), HKT and Animoca Brands) and The Hong Kong and Shanghai Banking Corporation Limited for issuing stable coins in Hong Kong. In a keynote speech by Mr Eddie YUE, Chief Executive of the HKMA, “The granting of stablecoin issuer licenses is an important milestone for the development of digital assets in Hong Kong. The regulatory regime provides an orderly operating environment for stablecoin issuers to apply innovative technologies while ensuring robust user protection and effective risk management, which will foster the development of a healthy, responsible, and sustain#86C6E5able stablecoin ecosystem. We look forward to the issuers launching business according to their plans, exploring growth opportunities while properly managing risks. We hope their promotion of regulated stablecoins will address pains points in financial and economic activities, create values for both individuals and businesses, and support the healthy development of digital assets in Hong Kong”. *Please refer to the List of Stablecoin Issuers granted with license under section 15(1) of the Stablecoins Ordinance to issue specified stablecoins in Hong Kong. SIGNIFICANCE: The licensing of Anchorpoint Financial Limited and The Hong Kong and Shanghai Banking Corporation Limited is not merely news for payment sector; it is a fundamental infrastructure upgrade for Hong Kong’s digital asset market. For SFC-licensed corporations, it provides a credible, regulated bridge between traditional finance and virtual assets. Early engagement and strategic planning around these new assets are strongly advised to capture first-mover advantages, enhance risk profiles, and ensure full regulatory alignment. 3. SFC joins global regulatory effort again to combat unlawful activities of finfluencers On 20 April 2026, the SFC participated in “Global Week of Action Against Unlawful Finfluencers” (“ Global Week ”), a coordinated initiative organised under the support of the International Organization of Securities Commissions (“ IOSCO ”). This year’s Global Week saw participation almost double compared to its inaugural edition in 2025, with a total of 17 IOSCO member jurisdictions joining the initiative. The initiative is designed to disrupt unlawful finfluencer activities through a combination of enforcement actions, supervisory measures, investor education and consumer awareness programs. Finfluencer Definition and Risk Profile Finfluencers are social media influencers who use platforms such as Instagram, YouTube and TikTok to promote financial products, share investment insights and offer various forms of financial advice. A growing subset of influencers are engaged in soliciting financial products or services illegally and without regulatory authorisation, typically using the portrayal of a lavish lifestyle, often falsely depicted, to market investment products to young and retail investors. These individuals may not be licensed by the SFC to provide securities or futures advice in Hong Kong. SFC’s Enforcement Actions in the Past Year Issued a compliance advice letter to a finfluencer in connection with the unlicensed promotion of overseas virtual asset trading platforms to the Hong Kong public Submitted 12 reports concerning 33 suspicious posts or accounts to major social media platforms since July 2025, with over 90% of reported posts or accounts promptly removed by the respective platforms; Deployed SENSOR, the SFC’s in-house artificial intelligence-powered social media monitoring system (launched in Q3 2025), which leverages AI and natural language processing to scan social media platforms for unlawful financial promotions and other red flags; and Conducted coordinated outreach with the Hong Kong Monetary Authority (“HKMA”) and the Chinese Banking Association of Hong Kong, including a fraud prevention and investment education session for Mainland-based university students in Hong Kong in March 2026 and anti-scam awareness activities at a Consumer Council event for senior citizens. SIGNIFICANCE: The Global Week, now in its second year and nearly double in jurisdictional participation, signals that finfluencer regulation is firmly embedded on the global regulatory agenda. For licensed corporations operating in Hong Kong, the SFC’s expanding enforcement toolbox, including AI-powered monitoring, platform takedown requests, compliance advice letters and investor education, creates a heightened compliance environment with direct operational implications. 4. New speech by Kelvin Wong: Keynote speech at Deloitte's Hong Kong CFO Forum On 24 April 2026, Dr Kelvin WONG, the Chairman of the SFC, delivered a speech at Deloitte’s Hong Kong CFO Forum. The speech highlights the following: Governance as a Performance Driver The speech argues that governance must evolve from a box-ticking compliance exercise into a strategic framework that drives corporate performance, accountability, and trust. It is an economic necessity that improves decision-making, lowers risk, and creates long-term value, rather than being merely a regulatory cost. The Central Role of Culture Governance failures are often rooted in human weakness. Therefore, a strong ethical culture is identified as the primary safeguard and a “hard control”. The critical test for an organization’s culture is whether it is genuinely safe for employees to raise concerns. Concentrated Ownership As of March 2026, 40% of Hong Kong’s listed companies have a single shareholder with absolute control. This structure heightens risks like information asymmetry and potential minority shareholder abuse, making robust, targeted regulation essential. Audit Quality and Enhanced Accountability The speech underscores Section 277 of the SFO, which holds all parties involved in financial disclosures accountable, including auditors, for disseminating false or misleading information. Auditors must ensure their work papers fully support their conclusions. Enforcement as a Wake-up Call The recent enforcement actions by the SFC and Accounting and Financial Reporting Council for serious audit failures are noted. This served as a constructive wake-up call to strengthen independence, scepticism, and quality controls. ICAC’s Integrity Compliance Management System (“ ICMS ”) The HKEX has integrated the ICMS into its corporate governance guide. Phase 2, launching in 2026, will provide a practical playbook and digital tools to help embed integrity systems beyond paper compliance. Shared Stewardship The conclusion reaffirms that Hong Kong’s future as an International Financial Centre depends on the quality of leadership, the strength of culture, and the courage of professionals to do the right thing. Integrity is a shared mission where every line of defence must uphold its responsibility. * For more details, please refer to Dr Kelvin WONG speech SIGNIFICANCE: The SFC is explicitly stating that it cannot police the market alone. It calls on licensed corporations, as key intermediaries and gatekeepers, to act as co-stewards of market quality. The speech sets the expectation that licensed corporations must exercise heightened judgement, courage, and professional scepticism to uphold Hong Kong’s reputation as an International Financial Centre, positioning their role as both a commercial and public trust. Enforcement News - Intermediaries 5. SFC sanctions Impression Investment Limited and its former responsible officer over staff trading activities On 09 April 2026, the SFC announced disciplinary sanctions against Impression Investment Limited, a Type 9 licensed corporation, and Mr Liu Shan, a former director, Responsible Officer (“ RO ”) and Manager-in-Charge (“ MIC ”) of the firm. Impression was publicly reprimanded and fined HK$2 million. Liu was prohibited from re-entering the securities and futures industry for eight months, from 2 April to 1 December 2026. SFC Findings Between January 2016 and March 2021, Liu and another staff member engaged in personal securities trading in a manner contrary to regulatory requirements, whilst simultaneously responsible for making investment decisions for funds managed by Impression, the specific failures identified were the following: • Over 2,500 personal transactions executed without pre-clearance approval • Same-day personal trading in the same securities as funds under management, in some instances at more favourable prices than those obtained for investors • Absence of post-trade monitoring of staff personal trading during the relevant period The SFC concluded that Impression’s failures were directly attributable to Liu’s neglect in discharging his duties as RO and member of senior management. SIGNIFICANCE: This case serves as a timely reminder that staff trading controls remain a high priority of SFC supervisory focus. The misconduct persisted for more than five years without detection, reflecting serious governance failures and resulting in both corporate and individual sanctions. 6. SFC reaches agreement with PricewaterhouseCoopers for shareholder compensation of HK$1 billion regarding false financial statements of China Evergrande Group for 2019 and 2020 On 23 April 2026, the SFC announced an agreement with PricewaterhouseCoopers Hong Kong limited (“ PwC HK ”) requiring the firm to pay HK$1 billion into a dedicated compensation fund for eligible independent minority shareholders of China Evergrande Group (“ Evergrande ”). In a concurrent action, the Accounting and Financial Reporting Council (“ AFRC ”) imposed a HK$300 million fine and a six-month practice restriction on PwC HK – prohibiting the firm from accepting or performing audit engagements for new listed clients during that period. The AFRC additionally issued public reprimands and fined two PwC partners HK$10 million each. The combined sanctions across both regulators total HK$1.3 billion. For more details, please refer to AFRC – Press Releases on 23 April 2026 . The SFC’s investigation concluded that Evergrande’s audited annual reports for financial years 2019 and 2020 contained materially false or misleading financial information. Revenue was artificially inflated by prematurely recognizing income from property sales before the completion and delivery of the relevant properties to buyers. SUMMARY OF MISSTATEMENT Financial Year Revenue Overstatement Reported Profit Actual Result FY2019 RMB 213.9 billion (overstated 44.79%) RMB 33.5 billion RMB 7.12 billion loss FY2020 RMB 350.2 billion (overstated 69.03%) RMB 31.4 billion RMB 19.9 billion loss Whilst not admitted by PwC HK, the SFC considers that PwC HK, as auditor of Evergrande: · was involved in disclosing false or misleading information; · failed to maintain auditor independence in the FY2019 and FY2020 audits; · failed to apply adequate professional scepticism in planning, procedures, and handling irregularities; · did not design and perform effective site inspections to verify property completion and revenue recognition; · acquiesced to Evergande management’s manipulation of audit samples and site inspections, concealing premature revenue recognition; and · failed to verify the authenticity of supporting documents and records Ms Julia LEUNG stated that this marks the first time that auditors of a defunct company have been required to provide compensation to independent minority shareholders harmed by false and misleading financial statements, and that outcome sends an unequivocal message of accountability to the audit profession and investing public alike. SIGNIFICANCE: The Evergrande/PwC HK enforcement outcome is one of the most consequential in the SFC’s history, establishing a new precedent for auditor’s accountability and investor compensation in the context of market misconduct. Its implications extend well beyond the accounting profession. Enforcement News - Listed Companies 7. SFC commences legal proceedings against former senior executives of China Automotive Interior Decoration Holdings Limited and its subsidiary On 29 April 2026, the SFC has file legal proceedings in the Court of First Instance against two former executives of China Automotive Interior Decoration Holdings Ltd. (“ China Automotive ”) (stock code: 00048 ) and its subsidiary Giant Faith Holdings Ltd. The case centres on alleged misappropriation of funds disguised as trade payments. Between December 2019 and January 2020, WONG Ho Yin, former director of China Automotive and its subsidiary, allegedly signed cheques for three payments totalling HKD 14.6 million. These were recorded as payments to a Mainland company for purchasing food products. However, the SFC alleges these were fictitious transactions causing loss to the listed company. The proceedings were commenced under Section 214 of the Securities and Futures Ordinance. If the court rules in the SFC’s favour, the defendants could face disqualification from corporate management for up to 15 years, in addition to the financial restitution sought. SIGNIFICANCE: While this case directly targets a listed company’s directors, it serves as a critical warning signal for all SFC-licensed corporations. The enforcement action underscores that the regulator views fictitious transactions and misappropriation as severe breach of the fit and proper test, with direct implications of a firm’s internal controls and senior management accountability. [End of ComplianceOne Newsletter – April 2026] 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

我們非常榮幸地宣佈，天匯合規顧問有限公司 (ComplianceOne Consulting Limited) 正式獲委任為深圳市商業聯合會 (SGCC) 副會長職位。 【深港聯動 • 智領未來】天匯合規榮膺深圳市商業聯合會（SGCC）副會長職位，引領監管科技新局 (2026.04) 我們非常榮幸地宣佈， 天匯合規顧問有限公司 (ComplianceOne Consulting Limited) 正式獲委任為 深圳市商業聯合會（SGCC）副會長級職位 。 在近日舉行的「第十五期深商企業產品 Show：AI 科技企業展示暨新會員頒牌」活動上，本公司合夥人 王陶浚 代表天匯合規接過「副會長會員」榮譽牌匾。獲委任為副會長單位，不僅是業界對天匯專業實力的權威認可，更象徵著我們在鏈接深港金融生態、推動大灣區跨境合規創新方面，扮演著更為核心的領導角色。 核心洞察：合規，始終是 AI 創新的穩健基石 隨著 AI 技術持續重塑金融版圖，天匯合規始終走在行業前沿，引領範式轉移。透過將香港嚴謹的監管架構與尖端科技深度融合，我們不僅為企業提供合規保障，更致力於為其創造價值，助力客戶在充滿信心的前提下，實現業務規模的無縫擴張。 全方位推動大灣區金融合規發展 RegTech 科技創新： 旗下「東查查反洗錢/客戶管理系統」(eDon Screen-X AML/CRM Solutions) 利用 AI 技術，為現代金融環境優化反洗錢 (AML) 及了解你的客戶 (KYC) 的工作流程。 市場領先專業知識： 作為香港 MSO 顧問服務市場佔有率第一的標桿，我們專精於證監會 (SFC) 牌照申請及全方位監管支持。 全球金融門戶： 憑藉 20 年的行業實務經驗，我們扮演「跨境戰略橋樑」的角色，協助企業對接國際監管標準，實現全球業務的可持續增長。 作為新任 副會長 ，我們期待與 SGCC 的各界會員企業緊密協作，在大灣區共同構建一個更具韌性、以科技驅動的金融未來。 We are honored to announce that ComplianceOne Consulting Limited has been officially appointed as a Vice President Member Unit of the Shenzhen General Chamber of Commerce (SGCC) . At the recent "15th SGCC AI Technology Showcase," one of our founder, Tao Wong, was privileged to receive the Vice President plaque on behalf of the firm. This appointment recognizes ComplianceOne’s professional standing and our commitment to leading financial compliance standards within the Greater Bay Area. Core Insight: Compliance—The Enduring Bedrock of AI Innovation As AI continues to reshape the global financial landscape, THC Consulting remains at the forefront, driving industry paradigms forward. By deeply integrating Hong Kong’s rigorous regulatory framework with cutting-edge technology, we do more than just provide a compliance safety net; we are dedicated to creating tangible value—empowering our clients to scale their operations seamlessly and with absolute confidence. Driving Excellence in the GBA Financial Ecosystem RegTech Innovation: Our "eDon Screen-X AML/CRM Solutions" system leverages AI to streamline AML and KYC workflows for the modern era. Market-Leading Expertise: Ranking Top 1 in Hong Kong’s MSO advisory market, we specialize in SFC licenses and end-to-end regulatory support. Global Gateway: With 20 years of expertise, we serve as a Strategic Cross-Border Bridge , helping firms navigate international regulatory standards to achieve sustainable global growth. "Going far requires going together." As a Vice President Unit , we look forward to collaborating closely with our fellow SGCC members to build a more resilient, technology-driven financial future for the Greater Bay Area.

免責聲明：本文件所載內容及建議僅爲本公司內部意見及指引，僅供內部參考及評估之用。 【合規提示】場外衍生工具發牌制度生效 (2026.08) 免責聲明 ： 本文件所載內容及建議僅爲本公司內部意見及指引，僅供內部參考及評估之用。 免責聲明 ： 本文件並不構成專業或正式法律意見。文件所載資料可能因應證券及期貨事務監察委員會或其他 免責聲明 ： 有關監管機構的進一步修訂或更新而有所變動。本公司概不就本文件的內容承擔任何法律責任。 免責聲明 ： 持牌法團在參考或使用本文件時，應根據本身的情況及最新監管規定作出獨立判斷，並在有需要 免責聲明 ： 時，向合資格律師或專業顧問尋求獨立法律意見。 免責聲明 ： 本公司保留權利，可隨時修改或更新本文件，而毋須事先通知。 目錄 1. 背景 2. 適用範圍及發牌規定 3. 最低資本規定 4. 建議的第11 類受規管活動（場外衍生品交易商）牌照申請規定 5. 過渡安排 6. 核心要點及下一步行動 7. 我們可以如何協助 1. 背景 證券及期貨事務監察委員會（「 證監會 」）正推行場外衍生品活動改革的主要部分，方法是引入： 兩項 新增 受規管活動—— 第 11 類受規管活動 （場外衍生品產品交易或就場外衍生工具產品提供意見）及第 12 類受規管活動（爲場外衍生品交易提供客戶結算服務）；及 兩項經 擴大 受規管活動—— 第 7 類受規管活動 （自動化交易服務）及第 9 類受規管活動（資產管理），兩者將涵蓋場外衍生工具產品。 證監會估計新制度將於 2027 年下半年 生效。 持牌法團評估其現有或計劃中的活動是否屬於這些新增或經擴展受規管活動的範圍，並及早於生效日期前採取準備行動。 2. 適用範圍及發牌規定 持牌法團應仔細考慮其建議進行／現行的業務活動是否觸發發牌規定： 活動 是否須領有牌照？ 所需牌照類別 以代理形式進行場外股票衍生品交易（附註1） × 第 1 類 以代理形式進行場外期貨衍生品交易 × 第 2 類 以主事人形式進行場外股票衍生品交易 ✓ 第 11 類 進行利率衍生工具、信貸衍生工具、商品衍生工具等交易 ✓ 第 11 類 就場外衍生工具產品提供意見 ✓ 第 11 類 場外衍生品持倉的自營結算 × 無需就第 12 類申領牌照 透過中央對手方向第三方客戶提供結算服務 ✓ 第 12 類 爲場外衍生工具產品營運電子交易平臺 ✓ 第 7 類（經擴大） 爲場外衍生工具產品提供僅限執行的自動化交易服務 ✓ 第 7 類（經擴大） 爲外部客戶管理載有場外衍生工具產品的投資組合 ✓ 第 9 類（經擴大） 爲全資集團公司管理場外衍生工具投資組合 × 第 9 類 附註1 1. 發牌規定 在新的場外衍生工具發牌制度下，證監會就進行場外股票衍生工具交易時以代理人身分行事及以主事人身分行事，劃出明確界線。 代理形式 代表其客戶 執行交易， 並不會成爲該交易的對手方，亦不會承擔主事人的市場風險或信貸風險 。 在此身分下，有關活動不屬新增第 11 類受規管活動的範圍，並會繼續受現有的第 1 類受規管活動（證券交易）及第2 類受規管活動（期貨合約交易） 牌照所涵蓋。 主事人形式 持牌法團以直接對手方的身分與其客戶訂立場外股票衍生工具交易，承擔市場風險，實際上是以自己的帳戶「買賣」該等產品。 這構成一項交易活動，直接觸發新的第 11 類受規管活動發牌規定。 至於非股票類場外衍生工具（例如利率、信貸、商品衍生工具），代理／主事人的區分並非決定性因素——除非有特定豁免適用，否則不論該公司是以代理人抑或主事人身分行事，進行該等產品的交易或提供意見一般均須領有第 11 類牌照。 因此，公司應仔細評估其業務模式及入帳安排，以確定其是以代理人抑或主事人身分行事，尤其是在進行場外股票衍生品交易時，因爲此項區分將直接影響其在新制度下的牌照義務。 3. 第 11 類受規管活動牌照擬申請要求 焦點範疇 資產管理集團中央場外衍生品交易商 場外衍生品交易商經紀 場外衍生品交易商 資本規定 繳足股本資本： 3,000萬港元 規定速動資金： 1,500萬港元 繳足股本資本： 6 ,000萬港元 規定速動資金： 3,000萬港元 低於指明門檻 ： 有形資本：5 億港元 規定速動資金：7,800 萬港元 其他情況 有形資本：10 億港元 規定速動資金：1.5 億港元 資本要求的計算方法 基本計算法（BMRA / BOCCRA） 標準計算法（SMRA／SOCCRA） 風險管理資源 由於不擔任主事人對手方，風險程度較低 風險數據彙集及計算較爲簡單 須使用複雜計算方法及較精確的風險數據 需要維持精密的風險管理系統 負責人員的勝任能力 於過去6 年內具備至少3 年的相關行業經驗 熟悉場外衍生工具制度下的風險管理及資本標準 4. 過渡安排 爲避免對市場造成干擾，證監會已設定了一項爲期6 個月的過渡安排，預計將於 2027 年 7 月開始實施 ，讓現有合資格的市場參與者可於根據新制度取得正式牌照前，繼續進行其業務活動。 注2 適用於未持有新增第11類及第12類，或擴大的第7類及第9類受規管活動牌照的持牌法團、負責人員及持牌代表。 注3 適用於現有第9類牌照持有人，而其爲外部客戶管理包含場外衍生工具產品的投資組合。 注4 持牌法團符合「合資格」條件的要求： 在生效日期前的至少2年內一直進行該項活動； 至少有2名合資格的負責人員。 注4 負責人員符合「合資格」條件的要求： 在生效日期前的至少2年內一直進行該項活動。 5. 核心要點及下一步行動 高級管理層應確保在 2027 年下半年之前完成以下五項準備工作： 全面檢視現有業務活動是否屬於第 11 類、第 12 類，或擴大的第 7 類及第 9 類受規管活動範圍。 確定公司是否符合視爲獲發牌機制的資格。 檢視實體及交易入賬安排，評估相關風險的入賬及管理安排。 評估監管框架如何適用於有關業務。 確保管治、風險管理及內部監控措施適合受規管的營運環境。 6. 我們可以如何協助 天匯合規團隊由具備豐富經驗的專業人士組成，在合規、風險管理以及政策檢視與制定方面擁有深厚專業知識。我們能夠準確識別相關通函所載監管期望與貴公司現行政策及程序之間的差距。 憑藉對監管要求複雜性的深入理解，我們可根據貴公司的具體需要提供度身訂造的方案及分析，並協助處理任何重大不足之處。我們的專業能力可協助貴公司持續符合監管標準，同時全面提升合規管理水平。 如有任何疑問，歡迎隨時聯絡我們的合規支援團隊。 [完結 - 【合規提示】場外衍生工具發牌制度生效 (2026.08)] For more details, please click on the title of the topic above. ================================= ~ Make It Right Today, Better Tomorrow ~ ================================= The article 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

The topics discussed in this monthly newsletter for insurance are as follows: ComplianceOne Insurance Newsletter – March 2026 The topics discussed in this monthly newsletter are as follows: Regulatory Updates HKMA, SFC, IA and MPFA Launch GenA.I. Sandbox++to foster A.I. innovation across financial services Market News IA Might Reviews Definition of Mainland China Visitors (MCV) Marine Risk Pool Now Operational and Providing War Risk Cover Amid Middle East Tensions Regulatory Updates 1. HKMA, SFC, IA and MPFA Launch GenA.I. Sandbox++to foster A.I. innovation across financial services On 5 March 2026, the Hong Kong Monetary Authority (“ HKMA ”), Securities and Futures Commission (“ SFC ”), Insurance Authority (“ IA ”) and Mandatory Provident Fund Schemes Authority (“ MPFA ”), in collaboration with the Hong Kong Cyberport Management Company Limited (“ Cyberport ”), jointly announced the launch of the Generative Artificial Intelligence (“ GenA.I. ”) Sandbox++ initiative. Building on the success of the original GenA.I. Sandbox launched in 2024, the expanded Sandbox++ now covers multiple financial sectors, including banking, securities and capital markets, asset and wealth management, insurance, mandatory provident fund (“ MPF ”) schemes, and stored value facilities. The initiative continues to prioritise three high-impact application areas: i) Risk management ii) Anti-fraud measures iii) Customer experience enhancement It further advances “A.I. vs. A.I.” strategies, using A.I. technologies to identify, monitor and mitigate risks arising from A.I. adoption itself. Participating financial institutions will benefit from Targeted supervisory guidance from the four regulators; Technical support; and Complimentary access to graphics processing unit (“ GPU ”) computing resources at Cyberport’s A.I. Supercomputing Centre. This risk-controlled environment enables institutions to develop, pilot and refine generative A.I. use cases more efficiently. The Sandbox++ encourages both sector-specific and cross-sector applications, including but not limited to: A.I.-driven insurance underwriting and claims processing Automated suitability assessments for investment product distribution Intelligent compliance tools for regulatory requirements Advanced fraud detection systems Enhanced customer service via intelligent chatbots Broader industry-wide solutions Key Statements from Regulators Mr Eddie YUE, Chief Executive of the HKMA Mr YUE described the launch as a significant milestone under the “Fintech 2030” strategy, aimed at unlocking A.I.’s potential to drive growth, efficiency and customer-centricity while reinforcing Hong Kong’s position as a leading international financial centre. Ms Julia LEUNG, Chief Executive Officer of the SFC Ms LEUNG highlighted the expansion as a collective commitment to responsible market innovation, urging licensed corporations to participate actively to enhance operational efficiency, resilience and growth through A.I. Mr Clement CHEUNG, Chief Executive Officer of the IA Mr CHEUNG noted that the initiative fosters an accountable, inclusive and prudent environment for A.I. innovation, aligning with the IA’s AI Cohort Programme and supporting talent attraction to strengthen Hong Kong’s regional A.I. hub status. Mr CHENG Yan-chee, Managing Director of the MPFA Mr CHENG encouraged MPF trustees and intermediaries to explore advanced fintech solutions, including A.I., to improve operational efficiency and service quality for scheme members. SIGNIFICANCE: The GenA.I. Sandbox++ represents a major collaborative step by Hong Kong’s financial regulators to accelerate responsible generative A.I. adoption across the entire financial ecosystem. For the insurance sector, this creates a supervised platform to test innovative applications such as faster claims handling, improved underwriting accuracy, enhanced anti-fraud capabilities, and better customer interactions while ensuring strong governance, risk controls, and policyholder protection. By providing free access to high-performance computing resources and cross-sector collaboration opportunities (including with technology partners), the initiative lowers barriers to entry and promotes practical, high-impact A.I. deployment. This positions Hong Kong as a leading regional hub for A.I.-enabled financial services, supporting competitiveness, innovation, and long-term resilience in a rapidly digitizing industry. Markets News 2. IA Might Reviews Definition of Mainland China Visitors (MCV) On 16 March 2026, the Insurance Authority (“IA”) announced a review of the definition of Mainland China Visitors (“MCV”) used in insurance business statistics. Mr. LUI Yu-kwok, Executive Director (Long-term Business), indicated that individuals entering Hong Kong through talent admission schemes (such as the Top Talent Pass Scheme) and Mainland residents who permanently reside overseas may no longer be classified as MCV under the revised definition. The IA has suspended publication of 2025 MCV-specific insurance figures. Mr. Clement CHEUNG, Chief Executive Officer of the IA, observed that new life insurance premiums in the first three quarters of 2025 grew 55.9% year-on-year, yet the MCV proportion (under the existing definition) fell below 30%, compared with 32.6% in 2023 and 28.6% in 2024. The historical peak stood at 39% in 2016. The IA plans to collect more granular data on clients’ place of usual residence to better analyse and promote business from non-local, non-MCV segments, including Southeast Asia and the Middle East. Background of the Current Definition The existing MCV definition: “Mainland residents entering Hong Kong as visitors holding the Two-way Permit (往來港澳通行證 / 雙程證) or a Chinese passport” has been applied since 1 April 2005. This definition originated from a 2004 regulatory measure by the Office of the Commissioner of Insurance (the predecessor of the IA), which required Mainland persons to purchase insurance policies in person in Hong Kong to prevent unauthorised cross-border sales. The IA intends to launch a formal industry consultation in the second quarter of 2026, with updated guidelines on the new client definition and related regulatory requirements (including identity documents and sales processes) to be issued within 2026. Period Event(s) Content and Source(s) 1 April 2005 Current MCV definition introduced Applied by the Office of the Commissioner of Insurance (“OCI”) for insurance statistics. (Source: Market Performance of the Hong Kong Insurance Industry for the first half of 2005 ) 2016 Highest MCV proportion recorded upon 2016 2016 Q1-Q3: Reached 37% of new life insurance premiums. (Source: OCI Annual Report 2016 ) 2023 MCV proportion Recorded at 32.6% of total new office premiums for individual business. (Source: IA provisional statistics releases for 2023 ) 2024 MCV proportion and circular Proportion at 28.6%; new business premiums from MCV reached HK$62.8 billion. (Source: IA provisional statistics release for 2024 ) Related IA circular (22 May 2024) on non-compliant referral models for MCV business. 2025 IA announces review and suspends 2025 MCV figures Publication of separate MCV statistics suspended pending review. 23 (Source: IA provisional statistics release for 2025 ) Q2 2026 (planned) Formal industry consultation Stated encouraging Mainland China visitors to purchase long-term life insurance in Hong Kong and providing relevant insurance companies with appropriate assistance. (Source: LC Paper No. CB(1)176/2026(07) ) Within 2026 (planned) Updated guidelines issuance On new client definition, identity documents, and sales processes. (Source: The Standard News on 16 March 2026 ) SIGNIFICANCE: This review reflects the IA’s commitment to refining market data for accuracy and relevance in a changing environment. By potentially excluding talent-scheme entrants and overseas Mainland residents from the MCV category, the IA seeks to avoid data distortion, reduce unnecessary “fly-to-buy” requirements for high-net-worth clients, strengthen policyholder protection and risk management, and support Hong Kong’s strategy to diversify its insurance clientele and develop headquarters economy through talent and overseas capital attraction. The move aligns with broader efforts to enhance Hong Kong’s competitiveness as an international insurance hub while maintaining robust regulatory safeguards. 3. Marine Risk Pool Now Operational and Providing War Risk Cover Amid Middle East Tensions The escalating conflict in the Middle East, triggered by U.S. and Israeli military strikes on Iran beginning late February 2026, has led to heightened tensions in the Persian Gulf, including Iranian threats to close the Strait of Hormuz and retaliatory attacks across the region. Marine Specialty Risk Pool In Press Release dated 17 September 2025 , the IA has welcomed and supported the establishment of the Hong Kong Marine Specialty Risk Pool (also known as the Hong Kong Marine War Risks Insurance Pool ), a commercially operated facility launched in November 2025 to provide stable war risk and specialty marine coverage primarily for Hong Kong and Mainland Chinese shipowners, see below table for further details of the Pool: Launch Date Announced and operational from around 17 November 2025 Founding Members Proposed by Legislative Council Member Honourable CHAN Pui-leung and developed in collaboration with Alliance Risk Transfer Limited as its manager. Founding participants include multiple local insurers such as: China Taiping Insurance (HK); PICC (Hong Kong); CMB Wing Lung Insurance; China Pacific Insurance (HK); and Asia Insurance. Capacity Up to approximately US$130 million (around HK$1.01 billion) Coverage War risks, including vessel hull damage arising from war, piracy, terrorist acts, and related geopolitical events (does not cover cargo) Current Exposure As of early March 2026, the pool has underwritten war risk cover for over 10 mainland Chinese-owned vessels operating in the high-risk Persian Gulf area, with all vessels reported safe and no claims filed to date *Source: S&P Global Market Intelligence (March 2026) , and South China Morning Post (10 March 2026) . SIGNIFICANCE: The Marine Specialty Risk Pool marks a strategic milestone in diversifying Hong Kong’s general insurance sector (currently ~15% of the market versus 85% life insurance) and reduces over-reliance on traditional London capacity for high-risk marine covers. By consolidating local underwriting expertise, the pool delivers tailored, more competitive solutions for Chinese and Hong Kong shipowners, enhances pricing influence on regionally specific risks, and creates new revenue opportunities for participating insurers. This initiative directly supports HKSAR Government policy objectives to position Hong Kong as an international maritime and risk management hub ( The Chief Executive’s 2025 Policy Address – Supplement 6 ), aligning with the Belt and Road Initiative and the National 15th Five-Year Plan . It also opens pathways for further product innovation, such as trade credit insurance to mitigate supply-chain disruptions from geopolitical events. [End of ComplianceOne Insurance Newsletter – March 2026] 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

7月7日，香港證監會表示歡迎中國人民銀行推出支持香港固定收益及貨幣市場發展的多項新措施，進一步推動香港建設國際固定收益及貨幣交易中心。 重磅！ 11項措施落地！央行、金管局、證監會聯手發力，香港再迎政策利好，固定收益及貨幣市場發展進入新階段！ 7月7日，香港證監會表示歡迎中國人民銀行推出支持香港固定收益及貨幣市場發展的多項新措施，進一步推動 香港建設國際固定收益及貨幣交易中心 。 這一次政策重點圍繞債券市場、人民幣產品、風險管理工具以及跨境金融基礎設施展開，對未來香港金融機構開展相關業務也將帶來新的影響。 六項措施支持香港固定收益及貨幣市場建設 根據中國人民銀行公佈的安排，相關措施主要包括： 1. 歡迎建立香港固定收益及貨幣交易平臺 推動香港建設更加完善的固定收益及貨幣交易基礎設施，提升市場交易效率和國際競爭力。 2. 支持香港交易所正式推出離岸人民幣國債期貨 進一步豐富人民幣利率風險管理工具，爲投資者提供更多風險對沖渠道，增強香港離岸人民幣市場吸引力。 3. 支持香港期貨結算所和聯交所期權結算所接納【債券通】（北向通）債券作爲合資格履約抵押品 支持香港期貨結算所及聯交所期權結算所接納“債券通”（北向通）債券作爲合資格履約抵押品，提高債券資產流動性及市場使用效率。 4. 優化“互換通”機制 進一步完善內地與香港利率互換市場連接安排，提升跨境利率風險管理能力。 5. 進一步優化擴容【債券通】(南向通) 進一步擴大內地投資者投資香港債券市場的渠道，推動香港債券市場規模增長。 6. 優化“債券通”（北向通）結算安排 完善跨境債券交易結算機制，提高交易便利度，增強市場運行效率。 （資料來源：香港證監會《推進香港固定收益及貨幣市場發展的措施》第二頁） 五項措施助力香港離岸人民幣市場發展 除推動固定收益市場建設外，此次政策也重點支持香港離岸人民幣生態進一步完善，包括： 1. 擴容優化金管局人民幣業務資金安排 提升香港人民幣流動性管理能力，爲離岸人民幣業務發展提供更穩定的資金支持。 2. 研究推出七天離岸人民幣流動資金投標機制 通過更加靈活的流動性管理工具，增強香港離岸人民幣市場深度。 3. 研究發行離岸人民幣短期債務工具 豐富人民幣投資產品類型，進一步完善離岸人民幣金融產品體系。 4. 推進建立離岸人民幣及印尼盾的雙邊貨幣交易框架 擴大人民幣在區域貿易及金融市場中的使用場景，推動人民幣國際化進程。 5. 就推動人民幣使用向銀行業界分享良好做法 加強市場經驗交流，促進銀行業進一步拓展人民幣相關業務。 （資料來源：香港證監會《推進香港固定收益及貨幣市場發展的措施》第二頁） 重點措施解讀 這次公佈的多項措施，主要圍繞提升香港固定收益及貨幣市場的交易能力、擴大人民幣資產應用場景展開。 （圖片來源：香港交易所） 其中，兩項重點安排與香港證監會及香港金融管理局於2025年發佈的《固定收益及貨幣市場發展路線圖》有關。已於昨天舉行的香港固定收益及貨幣峯會暨債券通論壇(峯會)上予以公佈： 1.中國外匯交易中心將與香港交易所在香港共建電子固定收益及貨幣交易平臺(交易平臺)。包括推出時間表在內有關交易平臺的進一步詳情，將適時予以公佈。 2.接受在債券通北向通下持有的在岸中國國債及政策性銀行債作爲香港交易所兩家結算所-香港期貨結算有限公司及香港聯合交易所期權結算所有限公司--的合資格抵押品，目標實施日期爲2026年底。 與此同時，香港將於2026年8月3日推出 五年期中國國債期貨合約 ，並且證監會現正與中國人民銀行商討進一步優化互換通機制，包括在2026年第四季度將 銀銀 間 「7天期存款機構回購定盤利率」（FDR007） 納入互換通合約參考利率。 證監會行政總裁梁鳳儀表示: 「今天公佈的措施，是支持人民幣國際化及推進香港作爲全球風險管理樞紐關鍵角色的重要一步。這些措施提供了有效的對沖工具，擴大中國國債的離岸應用場景，並提升香港固定收益及貨幣交易的效率及透明度。」 （圖片來源：香港證監會） 整體來看，隨着債券、利率及風險管理工具不斷完善，香港金融市場的基礎設施將進一步升級，也將爲更多國際投資者參與人民幣資產提供更便利的渠道。 合規佈局不能忽視 隨着債券、人民幣資產及衍生品市場不斷發展，未來會有更多金融機構參與香港市場。 但業務機會增加的同時，監管要求也會同步提升。 例如： • 開展證券交易相關業務，需要符合香港證監會第1類牌照要求； • 涉及期貨及衍生品交易，需要關注第2類牌照要求； • 開展資產管理業務，需要滿足第9類牌照及持續合規要求； • 跨境資金流動增加後，AML反洗錢、客戶盡職調查及風險管理體系也需要進一步完善。 對於計劃進入香港市場的企業來說，提前規劃牌照架構和合規體系，是長期穩定發展的重要基礎。 天匯合規專注香港及海外金融合規服務，爲企業提供： ✅ 香港金融牌照申請諮詢 ✅ SFC 1/2/4/9號牌規劃及申請支持 ✅ MSO金錢服務牌照申請 ✅ 保險經紀牌照申請 ✅ AML反洗錢體系建設 ✅ 持牌機構持續合規支持 我们能帮助企业了解香港监管要求，搭建符合业务发展的合规架构，让企业更稳健地进入香港市场。 市场机会正在增加，而合规准备需要提前开始 [完結 - 重磅！ 11項措施落地！央行、金管局、證監會聯手發力，香港再迎政策利好，固定收益及貨幣市場發展進入新階段！] For more details, please click on the title of the topic above. ================================= ~ Make It Right Today, Better Tomorrow ~ ================================= The article 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

近年中港兩地金融監管機構對證券期貨業的合規審查力度顯著升級，兩地均聚焦於「跨境管道風險」與「開戶源頭治理」，旨在遏制非法金融活動並防範系統性洗錢風險。 天匯合規：合規提示 《綜合整治非法跨境證券期貨基金經營活動實施方案》 及 《開立帳戶及與客戶維持關係時應採取的監控措施》 之影響分析 (2026年5月) 免責聲明: 本文件內所載的內容及建議，純屬本公司內部意見及指引，僅供內部參考及評估之用。 本文件並不構成專業或正式的法律意見。本公司不會就本文件之內容承擔任何法律責任。持牌法團在參考或使用本文件時，應根據自身情況及最新監管要求作出獨立判斷，並建議在有需要時尋求合資格律師或專業顧問的獨立法律意見。 本公司保留隨時修改或更新本文件的權利，恕不另行通知。 目錄 I. 背景及概要 II. 《通函》 及 《整治方案》 的摘要 III. 《通函》下處理內地個人投資者帳戶之要求及注意事項 IV. 《通函》之影響分析 V. 《整治方案》下之行動建議 VI. 總結 VII. 我們如何提供協助 I. 背景及概要 近年中港兩地金融監管機構對證券期貨業的合規審查力度顯著升級，兩地均聚焦於「跨境管道風險」與「開戶源頭治理」，旨在遏制非法金融活動並防範系統性洗錢風險。中港兩地金融監管機構共同在2026年5月22日發佈重大監管措施，向市場投下震撼彈。 在香港市場方面，香港證監會於檢視12家證券經紀行的開戶作業手法後發出 《開立帳戶及與客戶維持關係時應採取的監控措施》通函 (“ 通函 ”)。結果顯示部分持牌法團在盡職審查及持續監察上存在重大缺失，包括在 開戶流程中接受可疑或偽造文件 ，以及 未有對與海外中介人的跨境代理關係作出有效管理 。另外，由於在檢視中識別出的可疑或偽造文件大多涉及內地投資者 [1] ，因此香港證監會在通函中亦列載了在 開立及管理內地投資者的投資帳戶時所須採取的額外措施 。同時，香港金管局亦有發 通知 予香港銀行提示業界需留意上述通函並按相同標準加強對內地投資者的監控及審批等。 在中國內地市場方面，在總結2022年底對中國境外機構的跨境整頓經驗後，中國證監會（“ 中證監 ”）在同日亦發佈了 《綜合整治非法跨境證券期貨基金經營活動實施方案》 (“ 整治方案 ”)。此舉旨在根除中國境外機構未經批准、擅自或利用中國境內關聯或合作主體在中國境內招攬客戶，並通過網站、應用程式 (“ APP ”) 向中國境內投資者非法提供中國境外證券開戶及交易服務等的行為。有鑑於此，整治方案強調全鏈條治理，亦旨在於兩年整治期中全面清理非法存量業務，將違規經營活動逐出中國內地市場。 兩地監管在同一天發布重大監管措施並非偶然。香港證監會在其通函中明確提及中國證監會的整治方案，要求持牌法團在向香港境外投資者提供服務時，必須同時遵守香港及適用司法管轄區（即中國）的所有相關法律及監管規定，並且不得從事或協助任何非法活動。某程度上，這反映兩地監管的緊密合作。 [1] 內地投資者 - 指根據持牌法團的紀錄或在開立投資帳戶時，使用中華人民共和國簽發的居民身份證及／或護照作為身分證明文件的個人投資者。 II . 《通函》 及 《整治方案》 的摘要 A. 《通函》下持牌法團的監管要求摘要 完善開戶文件及帳戶審查程序 a) 如收到香港證監會的要求，需外聘顧問在三個月內按照香港證監會訂明的範圍及方法進行開戶核查 (“ 開戶核查 ”)； b) 就算沒有收到香港證監會的要求，也應盡快進行內部核查，以偵測是否曾接納可疑或偽造文件開戶。就所識別出的客戶，應發出事先書面通知，告知將暫停任何新交易及計劃在六個月內關閉有關帳戶； c) 應禁止已識別的客戶日後在持牌法團或其關聯公司開立投資帳戶；及 d) 開戶時應向潛在客戶說明提交偽造文件的嚴重後果，並由管理層對開戶文件進行審核後才可批准開戶。 關閉零結餘不動投資帳戶 a) 如收到香港證監會的要求，需在三個月內識別所有零結餘不動投資帳戶 (“ 不動戶核查 ”)； b) 就已識別的帳戶，應通知客戶需要確認KYC 及 CDD的資料仍然反映現況及相關，以及完成第3b點中提及的銀行帳戶措施，否則將暫停為其展開任何新交易，以及會在六個月內關閉有關帳戶；及 c) 如已識別的帳戶同時亦屬使用可疑或偽造文件開戶的帳戶，則應發出事先書面通知，告知將暫停任何新交易及計劃在六個月內關閉有關帳戶，以及禁止該客戶日後在持牌法團或其關聯公司開立投資帳戶。 內地投資者開立投資帳戶之額外措施 ( 僅限個人客戶，公司或機構客戶不適用 ) a) 需取得客戶的書面聲明，確認以下各項： 所有用以支持投資活動及相關結算的資金均來自 內地以外 的合法來源； 沒有因曾使用可疑或偽造文件而令帳戶遭到任何持牌法團或銀行關閉或暫停； 承諾如其書面聲明中的資料出現任何更改，會在七個營業日內通知持牌法團；及 明白持牌法團可能會按執法機構或監管機構的要求，披露該投資者的個人及其他相關資料； b) 要求該客戶使用以其名義在香港持牌銀行或在合資格司法管轄區的銀行持有的銀行帳戶，作結算及提存之用；及 c) 若其後發現該客戶的資金來源屬不合法，或違反內地任何資本管制法規，應發出事先書面通知，告知將暫停任何新交易及計劃在六個月內關閉有關帳戶，以及禁止該客戶日後在持牌法團或其關聯公司開立投資帳戶。 完善收集客戶識別資訊及客戶住址的程序 a) 需遵守從身分證明文件收集個人客戶識別資訊的排序表規定，即身分證明文件的優先次序應為香港身份證，國民身分證明文件及護照； b) 在接納客戶提供的身分證明文件前，應採取合理步驟，如向客戶取得陳述及保證，以確認客戶沒有持有次序較高的身分證明文件；及 c) 應審查客戶地址是否存在異常情況，例如多個明顯無關連的客戶使用同一住址等。 完善海外中介人跨境代理關係 [1] 之盡職審查及持續監察 a) 在與海外中介人建立跨境代理關係前，應瞭解中介人的性質、聲譽、牌照或註冊狀況及所受到的監管，其相關客戶的類別，以及預期的交易性質、交易量及交易額； b) 應按照在開戶盡職審查時獲得有關海外中介人的資訊定期進行持續監察，以識別預警跡象； c) 應採取額外措施，如要求海外中介人提供交易的相關資料，以減低潛在洗錢風險；及 d) 如洗錢風險無法被充分減低，應避免與該海外中介人建立關係。 B. 中國證監會的《整治方案》摘要 禁止中國境外機構未經國務院證劵監督管理機構批准下，擅自在中國境內或跟境內協助方合作開展證劵期貨基金業務相關的營銷招攬活動 [2] 及 提供相關開戶、處理交易指令、資金劃轉等交易服務 [3] ； 對整治對象作出嚴懲及巨額罰款，並在為期2年的集中整治期內，禁止作為整治對象的中國境外機構為存量投資者在中國境內提供買入交易、轉入資金等服務，僅允許單向賣出並轉出資金的交易。集中整治期滿後，在確保客戶財產安全及落實其帳戶處置安排的前提下，中國境外機構必須關閉中國境內網站、交易軟件及配套服務器，並停止為存量投資者在中國境內進行任何交易；及 禁止中國境內相關主體協助未經批准的中國境外機構開展營銷活動或提供交易服務，以及為其提供網站、交易軟件開發運營、客戶服務、經營網絡平台及自媒體等支持服務。 匯轉帳環節的客戶身份盡職調查及交易資訊保存職責，加大非法走資違規行為的查處力度以加強打壓非法走資。 [1] 海外仲介人跨境代理關係 － 指透過海外中介人（不論是否有聯屬關係）向投資者提供證券交易（包括首次公開招股認購）、期貨合約交易或槓桿式外匯交易服務，即構成跨境代理關係。 [2] 營銷招攬活動 － 指包括在中國境內營運網站及交易軟件、發布營銷資訊、推送投資資訊、開展返利營銷活動及宣傳推介和誘導認購境外股票等 [3] 開戶、處理交易指令、資金劃轉等交易服務 － 指包括在中國境內通過網站、交易軟件及配套服務器等跨境接收和傳輸開戶申請及交易指令等。 III . 《通函》下處理內地個人投資者帳戶之要求及注意事項 帳戶類別 監管要求 注意事項 新開立之內地投資者帳戶 硬性規定： 取得客戶的書面聲明 綁定指定香港／合資格司法管轄區的海外銀行 建議執行： 檢查內地投資者的資金來源合法性 (例如是否有合法的境外收入來源，如工作或業務收入等) 用面對面方式為內地投資者進行開戶時，應要求內地投資者提供香港入境小票，以證明其入境紀錄 現有內地投資者帳戶 (含零結餘不動投資帳戶) 硬性規定： 如收到香港證監會的要求，應進行開戶核查 (檢查開戶文件之真偽) 及不動戶核查 (識別零結餘不動投資帳戶) 對核查中識別出來的帳戶，根據本文第2章 - 《通函》中第1點 及 第2點處理 就不動戶需要重啟的情況，必須取得客戶的書面聲明 及綁定指定香港／合資格司法管轄區的海外銀行 建議執行 ： 就算未有收到香港證監會的要求，也應在切實可行的情況下進行開戶核查及不動戶核查 對識別出來的帳戶，按上段方式處理 就需要重啟的帳戶，檢查內地投資者的資金來源合法性 對其他非內地投資者帳戶也應每年進行一次不動戶核查，及在通知客戶後決定是否重啟或關閉帳戶 如屬中證監的整治對像，那必須有序地清除存量內地客戶 IV. 《通函》之影響分析 監管要求 目的 影響 完善開戶文件及帳戶審查程序 打擊內地投資者使用偽造文件開戶 合規成本攀升： 持牌法團需要花額外行政成本、技術成本及人力成本加強檢查及進行"回溯式"審核等。 關閉零結餘不動投資帳戶 打擊洗錢活動，大部分呈現分層交易活動模式的帳戶通常在資金被悉數提取後會一直閒置。此外，部分該等帳戶被發現由提供偽造文件開戶的內地投資者所持有 內地投資者開立投資帳戶之額外措施 加強壓制及打擊內地投資者非法走資 內地客源進一步收縮，影響業務收入： 雖未有明文禁止香港銀行或持牌法團為內地客戶提供服務，但香港銀行及持牌法團仍需加強對內地投資者之帳戶審批及檢查內地投資者資金來源之合法性，因此內地投資者於香港開立金融帳戶變得更困難。依賴內地客源的持牌法團需積極考慮開拓其他客源或合法渠道。 完善海外中介人跨境代理關係之盡職審查及持續監察 打擊與新西蘭或越南等海外持牌券商合作的香港持牌法團透過跨境代理關係降低開戶門檻及洗錢監控，藉此為內地投資者開立虛假帳戶參與香港IPO市場及接受虛擬貨幣出入金。 需跟不達標的海外券商IPO業務合作需終止： 香港券商需對海外券商進行更嚴格的盡職調查並審慎考慮跟不達標準的海外中介人終止合作關係，否則將面臨監管判罰。 V . 《整治方案》下之行動建議 任何跟中國境內中介機構甚至個人合作之持牌法團都建議立即檢示是否有進行以下行為，因其可能構成在境內非法招攬或提供金融投資服務予內地投資者，隨時會收到中證監的通知並成為整治對象及施加罰款。 檢查事項 潛在風險 行動 是否有內地網站，於內地平台經營社交媒體／網誌或平台等（例如：小紅書，抖音，微博，微信公開朋友圈），及有於內地平台上架交易軟件及APP等。 就算內容上未有指明目標客戶是內地投資者，只要屬內地平台，仍可被視為有意圖非法招攬內地投資者。 建議在審慎評估內地法規風險後，盡快下架有關網站，社交媒體／網誌或平台以及軟件或APP等。 是否有跟任何內地中介合作以提供行銷招攬，運營網站及交易軟體／平台等。 被視為非法招攬內地投資者，提供金融服務等。 即時終止所有合作關係。 是否設有或跟境內中介合作設置境內聯繫或服務點等，以提供境外金融服務查詢或聯繫。 被視為有非法招攬內地投資者，提供金融服務等。 即時終止所有境內聯繫或服務點。 前線員工是否有經營個人內地社交媒體／網誌或平台以推薦金融服務或產品等，甚至私下跟內地中介機構及個人有合作轉介內地投資者等。 如持牌法團未有合適的監控措施，仍可能需負上連帶責任。 即時提供相關培訓，在員工守則上明確禁止此等行為及要求員工簽署聲明。 如有跨境業務活動需求，建議檢視或更新內部跨境業務活動指引／措施以說明員工在中國境內可進行之業務活動。 只要在境內未有相關牌照或許可的情況下推薦或介紹境外金融服務或投資產品等，即可構成在境內非法開展證券期貨基金業務相關行銷招攬活動。 透過培訓及指引確保員工知悉在中國境內出差時的注意事項。如對中國境內可進行之活動／行為有任何疑問，建議可進一步咨詢內地專業法律意見。 VI. 總結 中國監管的整治方案對外方面：透過重拳處罰、殺雞儆猴，形成寒蟬效應，令香港持牌法團不敢貿然以非法方式招攬內地投資者。對內方面：進一步加強外匯管制監控，打壓境內投資者違法走資行為。上述舉措亦無疑為香港金融市場的發展蒙上陰霾，因內地資金實為香港金融市場的重要一環。 綜合兩地監管「雙管齊下」，我們認為對香港持牌法團的核心影響可歸納為四個層面： 合規成本攀升： 內部核查、帳戶關閉、開戶標準提升等要求帶來顯著的合規成本增加； 內地客源收縮： 內地客戶開戶門檻提高； 業務轉型壓力： 依賴非法內地資金或客源的商業模式面臨根本性調整； 內地法規、監管執法風險上升： 內地監管對於境外金融機構在境內重大違規持「零容忍」態度並可施加嚴懲，持牌法團及其高級管理層所面臨合規責任及風險加重。 在此監管新格局下，香港持牌法團須即時實踐對內地投資者的新監管措施並密切關注市場反應以調整業務策略及開拓新渠道等，在確保業務經營的合規性與可持續性下繼續支持香港金融市場的發展。 VII. 我們如何提供協助 我們的團隊由經驗豐富的專業人士組成，在合規、風險管理，以及政策審閱與制定方面擁有深厚的專業知識，能精準識別通函中的監管預期與貴司現行政策及程式之間的差距。我們深諳監管要求的複雜性，並能提供量身定制的解決方案及分析等，以滿足貴司的特定需求並填補任何重大缺陷。我們的專業知識可確保貴司遵守監管標準，並全面提升合規實踐水準。 如有任何疑問，歡迎隨時與我們的合規支援團隊聯繫。 [完結 - 天匯合規：合規提示 |《綜合整治非法跨境證券期貨基金經營活動實施方案》及《開立帳戶及與客戶維持關係時應採取的監控措施》 之影響分析 - (2026年5月)] For more details, please click on the title of the topic above. ================================= ~ Make It Right Today, Better Tomorrow ~ ================================= The article is for general information purpose only and is not intended to constitute legal or other professional advice. 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ComplianceOne Consulting Limited (ComplianceOne) is very proud to announce that our client, KUAIPAY HK LIMITED, successfully obtained the Money Service Operator License (MSO License) issued by the Hong Kong Customs and Excise Department in August 2026! Success Case Sharing | ComplianceOne Assists "KUAIPAY HK" in Successfully Obtaining Hong Kong Money Service Operator (MSO) License!(2026.08) [Good News] Warm Congratulations to KUAIPAY HK LIMITED on Successfully Obtaining the Hong Kong MSO License! ComplianceOne Consulting Limited (ComplianceOne) is very proud to announce that our client, KUAIPAY HK LIMITED, successfully obtained the Money Service Operator License (MSO License) issued by the Hong Kong Customs and Excise Department in August 2026! This license application took 14 months (June 2025 to August 2026). Under the full guidance and support of ComplianceOne's professional team, KUAIPAY HK successfully passed the stringent compliance review and evaluation by Customs, embarking on a new milestone in global cross-border payments and fintech development! Client Background & Strong Mainland Licensed Qualifications Strong Alliance & Strategic Synergy: KUAIPAY HK LIMITED established a local office in Hong Kong, dedicated to providing high-quality, safe, and convenient cross-border payment and currency exchange services to global individual and corporate clients. Backing of Top-Tier Mainland Payment License: KUAIPAY HK has achieved strategic synergy with leading Chinese mainland e-payment enterprise—99Bill Corporation ("99Bill"). Established in 2004, 99Bill is among the first batch of renowned payment enterprises to receive the Payment Business License (License No.: Z2000831000014) issued by the People's Bank of China. It possesses comprehensive service qualifications including internet payments, mobile phone payments, and nationwide bank card acquiring services, cumulatively serving over 400 million individual users and 6.5 million business partners. Relying on strong industrial synergy and compliance capabilities, KUAIPAY HK will continue to expand into global markets such as Southeast Asia, Europe, and the Americas. Hong Kong MSO Industry Trends & Compliance Challenges Since 2019, the Hong Kong Customs and Excise Department has significantly tightened regulation and oversight of Money Service Operators (MSOs): Sharp 70% Drop in Licensed Entities: The number of local licensed institutions has dropped sharply from over 2,500 in early 2020 to just over 600 today. Technology-Driven Transformation: Most institutions failed to renew their licenses primarily due to loopholes in Anti-Money Laundering (AML) policies, insufficient staffing, and a lack of compliance tools. At the same time, the industry is accelerating its transformation from traditional models into tech-driven, standardized international cross-border payment operations. ComplianceOne's Comprehensive Advisory Services As a professional consulting team holding the highest market share in Hong Kong and having cumulatively handled over 200 MSO license applications and renewals, ComplianceOne provided KUAIPAY HK with end-to-end professional services, including: One-Stop MSO License Application Consultancy: Providing pre-compliance advice regarding senior management "Fit and Proper Person" criteria, business processes, and operating premises regulations. Carefully reviewing and drafting the Business Plan and Anti-Money Laundering and Counter-Financing of Terrorism Policy (AML/CFT Policy) according to the latest Customs guidelines. Submitting applications to Customs on behalf of the client, assisting with site visits, and following up on Customs inquiries throughout the entire process until approval. Pre-Meeting Training with Customs & Competence Assessment Mock Exam Questions: Offering an exclusively developed 7-module Competence Assessment mock question bank to help clients deeply master regulatory requirements. Providing training prior to Customs interviews and breaking down "Frequently Asked Questions" to ensure interview performance aligns with regulatory expectations. Dedicated AML/CFT Compliance Training: Providing KUAIPAY HK and its staff with no less than 2 hours of professional compliance training (covering due diligence, risk-based principles, suspicious transaction identification, etc.) and issuing certificates of completion. About ComplianceOne Relying on rich experience in the financial services industry, ComplianceOne has repeatedly earned praise from regulatory authorities and officers. Whether it is new MSO license applications, license renewals, AML training, or mock exam system support, ComplianceOne can safeguard your business development! If you have any MSO license or compliance consultation needs, please feel free to contact us at any time!

The topics discussed in this monthly newsletter for Licensed Corporations are as follows: ComplianceOne Newsletter – January 2026 The topics discussed in this monthly newsletter are as follows: Regulatory Updates SFC and HKMA jointly consult on standard calculation periods under OTC derivative Clearing Rules SFC directs IPO sponsors to promptly conduct internal reviews to rectify serious deficiencies in the preparation of new listing documents Reminder of statutory obligations during SFC inspections to comply with section 180 of the Securities and Futures Ordinance Market News In Memory of David Webb – a corporate governance activist Forum of Speech SFC and UAE’s Capital Market Authority sign milestone MoU to strengthen cross-border digital asset collaboration Writing the Next Chapter for Hong Kong’s REIT Market- New speech by Alexandra Yeong on HK REITS Cross Agency Steering Group announces Strategic Priorities for 2026-2028 Enforcement News - Intermediaries SFC Reprimands and Fines Saxo Capital Markets HK Limited $4 Million for Failures in Distributing Unauthorised VA-Related Products SFC Suspends WONG Chi Fai for 27 Months and CHOI Sau Wai for 7 Months Over Undisclosed Personal Trading in Suspected Ramp-and-Dump Case Regulatory Updates 1. SFC and HKMA jointly consult on standard calculation periods under OTC derivative Clearing Rules The SFC and HKMA issued a joint consultation on standardizing the calculation periods for each year under the Clearing Rules for over-the-counter (“ OTC ”) derivative regulatory regime. Current Approach to accommodate additional Calculation Periods Since 2016, implementation of the mandatory clearing introduced four Calculation Periods (“ CPD ”) within the Clearing Rules at consistent six-month intervals with aims to: ensure timely identification of new dealers entering the OTC derivative market, or any prescribed persons (e.g. a licensed corporation under the SFC) which have met the Clearing Threshold; mitigate the risk of market participants manipulating their positions during the specific CPDs to avoid clearing obligation; following the consultations in 2018 and 2021, sixteen additional CPDs were incorporated in the Schedule 2. Proposed Approach to accommodate additional Calculation Periods beyond 2026 In assessing the need to adjust the three key elements related to CPDs, namely, (i) the three-month duration, (ii) the frequency of CPDs per calendar year, and (iii) the Prescribed Day (which occurs seven months after the end of each CPD); it is indicated in the observations that two CPDs per calendar year with three-month duration prove to be effective; while maintaining the Clearing Thresholds at USD20 billion. A Summary of the Proposed Approach to the Schedule 2 of the Clearing Rule Calculation Period Clearing Threshold Prescribed Day From 1 March 2027 onwards, 1 March to 31 May in a year USD20 billion 1 January in the following year From 1 March 2027 onwards, 1 September to 30 November in a year USD20 billion 1 July in the following year SIGNIFICANCE: This formulaic approach would provides prescribed persons with certainty that future Calculation Periods can be determined based on the established methodology, without reliance on adding new calculation periods to Schedule 2 to the Clearing Rules from time to time; and will not incur any operational changes the prescribed person have to comply relating to Clearing Rules. 2. SFC directs IPO sponsors to promptly conduct internal reviews to rectify serious deficiencies in the preparation of new listing documents The SFC set forth a circular highlighting the issues related to deficiencies in the preparation of listing documents, potential misconduct and significant mismanagement of resources of over-engagement in new listing applications. Some key takeaways of the deficiencies found: in reviewing recent listing applications, the SFC and SEHK found that some sponsors did not have a thorough understanding of their listing applicants, implying due diligence works on the applicants were not sufficient; strained resources status of the sponsors with over-reliance on external professional parties, while the sponsor principals are not capable of supervising their transaction teams, and the staff team involved is not equipped with requisite knowledge, and experience in IPOs arrangement; In the light of the findings, the SFC and SEHK have come up with the following rectification measures: joint letters were sent to 13 sponsors, requiring them to complete comprehensive reviews within three months on the deficiencies identified as well as the resources status to discharge their sponsor work; requiring all sponsors to submit the followings: - within two weeks, the names and number of appointed Principals and the number of active listing engagements; in order to ensure if the sponsors have adequate resources to carry out the duties; - within one week, a list of individuals engaged in IPO sponsor work and also those who have not yet passed the HKSI LE Paper 16 within three years or within six months after their first engagement in such work; onsite thematic inspections are expected on those concerned principals and sponsors; sponsors providing materially incomplete or unsatisfactory responses to the regulators, the vetting process may be suspended; engaged individuals who do not meet the eligibility criteria are now subject to tightened examination requirements; SIGNIFICANCE: The deficiencies findings reveal the facts that licensed corporations are thinning out their resources and straining personnel competence for undertaking business which they are not so well-acquainted or financial capable to handle. In the eyes of the regulators, as Ms. Julia Leung has said, “ The gatekeeping role of sponsors in the listing process is critical to maintaining the quality of Hong Kong’s capital market and sustaining investor confidence in new listings that will hold up through all market cycles. That role may have been eroded in their eager pursuit of deal volume . ” 3. Reminder of statutory obligations during SFC inspections to comply with section 180 of the Securities and Futures Ordinance The SFC found in its routine inspections that some licensed corporations (“ LC ”) engaged in unsatisfactory practices and behaviours which appeared to stem from a misunderstanding of the SFO or a lack of awareness regarding the LCs’ statutory obligations. According to the section 180 of the SFO “ Supervision of intermediaries and their associated entities”, it empowers the SFC to supervise licensed intermediaries and their associated entities by entering premises, inspecting records, and making inquiries to ensure compliance with financial and conduct requirements like onsite inspections. What are the malpractices of the findings by SFC? obstructing inspection arrangements: e.g. intending to postpone and delay; disputing the inspection without good reason: arguing over the areas and scope of samples evading responses: delaying in responses and providing misleading information; submitting false/distorted information: providing information which is ambiguous, inaccurate; actively disrupting the inspection process: intentionally disrupting the inspection process; unprofessional conduct toward inspectors: adopting an uncooperative attitude to take the inquiries seriously. Expected Standards & Statutory Obligations of LCs toward the SFC access to information & answers: LC should provide access to records / documents as required under section 180 of the SFO; maintenance & retrieval of records: maintain proper business records at all times for ready retrieval to SFC as required under Securities and Futures (Keeping of Records) Rules; availability of Responsible Officers (ROs): ensuring two ROs for each regulated activities and their availability during SFC visits; fitness & properness of LCs: adhering to the General Principles stated in the Code of Conduct for licensed persons; engagement of external representative: the LCs should realize their ultimate accountability and responsibilities to SFC for any information provided by outsourced external representatives on their behalf. Consequence of failure to cooperate or non-compliance The SFC takes any breaches of section 180 of the SFO seriously, and will not hesitate to exercise its powers under the SFO to take appropriate regulatory actions, such as: Supervisory interventions, which may include, but not limited to: imposing conditions on the LC to limit its business of regulated activities, e.g. no onboarding of new clients; fully evaluating the fitness and properness of the LC and its management personnel Enforcement actions, which may include, but not limited to: initiating criminal proceedings for contravention of the stipulated requirements; taking appropriate disciplinary actions; SIGNIFICANCE: As a licensed corporation, together with its licensed persons like Responsible Officers, licensed representatives, should bear in mind and get acquainted with not only the codes and guidelines which governing their behaviours to certain expected standards, a cooperative attitude in collaboration with the SFC upon any requests or inquiries should be ascertained to express their competence and fitness to remain licensed. Market News 4. In Memory of David Webb – a corporate governance activist David Webb was a renowned Hong Kong-based corporate governance activist, and an investor, who contributed his long-devoted efforts in advocating transparency in the stocks market, with his valuable research work and findings. David’s Key Roles and Contributions As an activist investor and market watchdog: the most well-known contribution was his publication of a list of " 50 Hong Kong stocks not to own " on 15 May 2026, within which he highlighted some bubble stocks subject to SFC concentration risk warnings, and aroused alerts to investors to stay away from these troubled stocks. His devoted efforts to advocate for greater transparency and improved corporate/economic governance; always known as one of Hong Kong's most vocal activist investors, and his investigations into corporate misconducts triggered regulatory concerns. He always stood out with brave to safeguard the interests of retail investors at large against non-performing managements of the listed stocks. As Founder of Webb-site.com : David moved to Hong Kong in 1991 as an investment banker, taking advantage of his professional insights, he founded the Webb-site.com w hich was a free online platform providing stock market news, data, and analyses for market participants. Appraises to this data base is considered as “second to none”! Later Years and Legacy Diagnosed with metastatic prostate cancer in 2020, David scaled down his research work. He passed away peacefully on January 13, 2026, at age 60 in Hong Kong, survived by his wife and two children. And in February 2026, the closure of Webb-site.com was announced and public release of its database, putting an end to David’s legend. RIP: David's enduring impact lies in his fearless market oversight through Webb-site.com , persistence in upholding the transparency in Hong Kong's financial markets; and most praised for his endeavour to speak for the retail investors! Forum of Speech 5. SFC and UAE’s Capital Market Authority sign milestone MoU to strengthen cross-border digital asset collaboration The SFC has entered into a landmark Memorandum of Understanding ( MoU ), with and the Capital Market Authority (“ CMA ”) of the United Arab Emirates ( UAE ), earmarking a further commitment to promoting international cooperation under its ASPIRes Roadmap . Key takeaways of the comments on the MOU from senior executives in the forum an unprecedented collaboration with overseas regulator with mutual consultation, information exchange to enhance cross-border regulatory cooperation on digital asset-related matters; an industry roundtable on digital asset innovation between the SFC and the CMA senior executives from the digital asset industry to discuss on the digital asset ecosystem; upholding a shared objective to enable responsible innovation while upholding market integrity and strong investor protection; the MoU provides support for responsible financial innovation for HK and UAE in fostering sustainable growth of HK’s vibrant and secure digital asset ecosystem; SIGNIFICANCE: This MoU marks an emblem in transnational financial collaboration, positioning Hong Kong and the UAE as progressive, well-regulated digital asset hubs. It demonstrates a mutual commitment to responsible innovation, enhanced supervisory coordination, and the establishment of global standards that underscore transparency, integrity, and investor confidence in the digital asset ecosystem. 6. Writing the Next Chapter for Hong Kong’s REIT Market- New speech by Alexandra Yeong on HK REITS In as speech delivered in a luncheon by Ms. Alexandra Yeong, Interim Head, Investment Products, at the Hong Kong REITS Association (“ HKREITA ”) provides a comprehensive overview of the future trajectory of Hong Kong’s REIT market, and the roles of the regulator in navigating the development. Some key takeaways for the readers Enhancing market competitiveness and regulation a wide range of new measures have been launched to attract new REIT listings, enhance market liquidity, broaden investor base and facilitate secondary offering with an ultimate aim to fostering the growth of REIT market in HK, including: Grant scheme and stamp duty waiver (i) extend the grant scheme for REITs for three years to MAY 2027 (ii) to waive the stamp duty for the transfer of REIT units since DEC 2024 REIT Connect (i) REIT Connect is expected to significantly increase our REIT market liquidity and broaden investor base, and a number of local and overseas REIT issuers have already expressed interests in launching their REITs in Hong Kong upon the launch of REIT Connect. (ii) Rapid growth and diversification in the China Mainland REIT (“C‑REIT”) market, including an international-sponsored retail C‑REIT; this signified a key milestone in the internationalization and diversification of the C-REIT market and offered a model for greater offshore participation in the massive market. (iii)The SFC further assured that early implementation of this major initiative remains a top priority. New REIT Channel and streamlined measures (i) A dedicated “REIT Channel” be launched in October allowing new REIT applicants to consult the SFC confidentially on listing applications, (ii) The SFC has also streamlined its authorization process so that, under normal circumstances, new REIT applications can be approved within four weeks from take-up. (iii) For secondary offerings, documentary requirements have been streamlined so that documents focus on offer-specific information, without the need for any updated portfolio valuations or accountants’ reports on condition that ongoing disclosure and reporting requirements are already in place, thus shortening preparation time and enhancing time-to-market. Facilitating corporate activities and privatization (i) Following an October 2024 consultation, the proposal of the Government and SFC to introduce a statutory scheme of arrangement and compulsory acquisition mechanism for REITs; with an aim to facilitate Hong Kong REITs to expand through mergers and acquisitions and to conduct privatization and corporate restructuring in a clear and orderly manner, while strengthening investor protection. Strengthening global partnerships and international collaboration Beyond REIT Connect, the SFC has also been engaging with other international markets like Saudi Arabia to explore more potential collaboration opportunities, there were also bilateral meeting on exchanging views on dual listing of investment products such as ETFs and REITS. SIGNIFICANCE: As a concluding remark, Ms. Alexandra Yeong reinstated that “ the SFC will continue to work closely with the Government, industry participants and all stakeholders to foster the growth of the Hong Kong REIT market, and reinforce its position as a trusted platform for capital formation and long-term value creation. ” 7. Cross Agency Steering Group announces Strategic Priorities for 2026-2028 In the 12 th meeting in Jan 2026, the Green and Sustainable Finance Cross‑Agency Steering Group (“ Steering Group ”) set out its strategic priorities for 2026-2028 to further strengthen Hong Kong’s role as a competitive and future‑ready sustainable finance centre. Built on the solid foundation of the 2023-2025 plan, the Steering Group’s strategic priorities for the next three years are anchored around two key pillars : (1) Consolidate and strengthen efforts to solidify Hong Kong as a sustainable finance centre through: strengthening the sustainability disclosure ecosystem, and the effective use of technology; expanding and deepening sustainable finance markets; strengthening external engagement; supporting talent development with capacity building initiatives (2) Develop Hong Kong’s strengths in emerging areas scaling transition finance with practical guidance, using tools and reference to case studies; while encouraging wider industry adoption of transition planning; supporting adaptation finance by building market readiness, identifying capability gaps, and supporting product innovation and development, while strengthening physical risk assessment capabilities. SIGNIFICANCE: Comments from the CEO of SFC, Ms. Julia Leung, and Chief Executive of the HKMA, Mr. Eddie Yue highlighted the significance of these updated 2026-2028 priorities: l underscore the ongoing commitment to ensuring Hong Kong remains globally aligned, forward‑looking, and responsive to market needs. l reinforce the groundwork for building a robust sustainable finance ecosystem, while positioning Hong Kong to capture the emerging opportunities in Asia’s transition to a low-carbon and climate-resilient economy Enforcement News - Intermediaries 8. SFC Reprimands and Fines Saxo Capital Markets HK Limited $4 Million for Failures in Distributing Unauthorised VA-Related Products On 6 January 2026, the SFC reprimanded and fined Saxo Capital Markets HK Limited (CE: AVD061 ) (“ SCMHK ”) $4 million for significant regulatory breaches related to the distribution of virtual asset (“ VA ”) funds not authorised by the SFC and VA-related products (collectively “ VA Products ”) on its online trading platform (the “ Online Platform ”). SCMHK ceased carrying on regulated activities on 28 February 2025* Relevant Period and Key Breaches (1 November 2018 to 25 November 2022) : During this over four-year period, SCMHK permitted retail clients to trade 32 VA Products on the Online Platform, executing 1,446 transactions involving six individual professional investors (“ PIs ”) and 130 retail clients. All products were complex, including 21 exchange-traded derivative VA Products. These VA Products should only have been offered to PIs per the SFC's 2018 Circular (" Distribution of virtual asset funds ") and 2022 Joint Circular (" Joint circular on intermediaries’ virtual asset-related activities "). SCMHK failed to: Assess clients' knowledge of investing in VA Products; Provide sufficient VA-specific information and warning statements; Implement specific product due diligence procedures for VA Products (relying instead on deficient group-level protocols from its parent company that failed to identify VA exposure); Ensure adequate policies and controls to supervise the Online Platform and meet regulatory standards for VA Product distribution; Confirm suitability of complex VA Product transactions for clients; Provide sufficient details on the nature, features, and risks of VA Products, along with appropriate warnings; For 87 clients (82 retail and five individual PIs) trading the 21 exchange-traded derivative VA Products, conduct adequate enquiries or gather sufficient information to assess derivatives knowledge and characterise clients accordingly. For more details of the background, please refer to the Statement of Disciplinary Action . SIGNIFICANCE: In determining the sanction, the SFC considered mitigating factors, including the prolonged nature of the failures (over four years), SCMHK's self-reporting of misconduct, voluntary client compensation for losses from VA Product trading, cessation of regulated activities, full cooperation with the SFC (accepting findings and facilitating early resolution), and its otherwise clean disciplinary record. This action represents a landmark enforcement in Hong Kong's regulation of virtual assets, marking one of the first major fines against a licensed intermediary for breaches in VA Product distribution. It underscores the SFC's strict expectations for robust due diligence, suitability assessments, client knowledge checks, and platform supervision in handling complex and high-risk VA Products, particularly in online environments. Even with remediation and cooperation, the substantial fine highlights zero tolerance for prolonged failures that expose retail investors to unauthorised products, reinforcing the need for intermediaries to align controls with evolving SFC guidance on virtual assets to protect investors and maintain market integrity. 9. SFC Suspends WONG Chi Fai for 27 Months and CHOI Sau Wai for 7 Months Over Undisclosed Personal Trading in Suspected Ramp-and-Dump Case On 26 January 2026, the SFC announced disciplinary actions against two licensed representatives involved in serious breaches related to undisclosed personal securities trading. The cases are interconnected, arising from an SFC investigation into a suspected Ramp-And-Dump Scheme (唱高散貨). Participants of the Case Mr WONG Chi Fai (Principal Offender) Mr WONG Chi Fai (" WONG "), a former licensed representative for Type 1 and Type 2 regulated activities, suspended for 27 months from 23 January 2026 to 22 April 2028. WONG’s actions circumvented staff dealing policies, prevented effective monitoring of frequent day trading and short-term margin trading, and demonstrated wilful and dishonest conduct. Ms CHOI Sau Wai (Facilitator) Ms CHOI Sau Wai (" CHOI "), a former licensed representative for Type 1 and Type 2 regulated activities, suspended for seven months from 23 January 2026 to 22 August 2026. CHOI’s conduct exposed the client to risks from WONG’s personal trading, exposed GSSL to potential liability if the client disputed the trades, and hindered the firm’s compliance obligations. Key Breaches Name Timeline Key Breach Remarks WONG Chi Fai July 2019 to January 2022 At Fulbright Securities Limited and Fulbright Futures Limited : Conducted approximately 1,300 securities transactions worth $670 million in a securities account held in the name of his relative at Glory Sun Securities Limited (“ GSSL ”, formerly China Goldjoy Securities Limited), without disclosure or approval. Repeatedly falsely declared to Fulbright that he had no beneficial interest in external securities accounts. January 2015 to December 2018; with concealment from May 2011 At Open Securities Limited (OSL, formerly TC Concord Securities Limited): Executed approximately 10,000 personal trades worth $2.8 billion through another relative-held account without required approval, making false declarations to conceal his financial interest and control. CHOI Sau Wai October 2019 to January 2022 Knowingly allowed and facilitated WONG to operate and execute personal trades in a client’s securities account at GSSL without the client’s written authorisation or written consent from WONG’s employer (“ Fulbright ”). This enabled the 1,300 transactions worth $670 million over more than two years, breaching GSSL’s internal policies and the Code of Conduct for Persons Licensed by or Registered with the SFC. For more details of the background, please refer to the: Statement of Disciplinary Action - WONG Chi Fai ; and Statement of Disciplinary Action - CHOI Sau Wai . SIGNIFICANCE: These linked enforcement actions underscore the SFC’s strong commitment to addressing undisclosed personal trading and unauthorised account access, especially when such conduct may facilitate market manipulation schemes like ramp-and-dump. WONG’s multi-firm, long-term misconduct and CHOI’s knowing facilitation in a client account highlight critical lapses in staff dealing controls, disclosure obligations, and intermediary supervision. The differentiated suspension periods, longer for the primary actor and shorter for the facilitator, reflect a proportionate yet firm response, reinforcing that licensed persons must strictly comply with authorisation requirements, accurate declarations, and employer policies. This serves as a clear deterrent to dishonest behaviour that jeopardises client protection, firm compliance, and overall market integrity. [End of ComplianceOne Newsletter – January 2026] 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 Licensed Corporations are as follows: ComplianceOne Newsletter – May 2026 The topics discussed in this monthly newsletter are as follows: Market News Hong Kong overtakes Switzerland as the World’s Top Offshore Wealth Centre Enforcement News SFC obtains disqualification orders against former directors of China Candy Holdings Limited SFC obtains two-year disqualification order against former financial controller and company secretary of Qunxing Paper Holdings Company Limited Movie producer Wong Pak Ming convicted of insider dealing in SFC’s prosecution SFC bans Nerico Brothers Limited’s former responsible officer, manager-in-charge and director Paul Wan Kai Leung for life over US$222 Million Client Asset Scandal SFC Raids Two more Chinese Brokerages in Widening IPO Probe Regulatory Updates SFC steps up measures to address forged documents, money laundering risks and account opening standards FTSB and SFC conclude consultations on Virtual asset advisory and management regimes SFC issues news guidance to help securities issuers prepare for upcoming uncertificated securities market regime Markets News 1. Hong Kong overtakes Switzerland as the World’s Top Offshore Wealth Centre For decades, Switzerland has been synonymous with offshore wealth and private banking, however this era has formally ended. According to the Boston Consulting Group (“ BCG ”)’s latest Global Wealth Report, Hong Kong has surpassed Switzerland in 2025 to become the world’s single largest destination for cross-border wealth. Assets booked in the city jumped 10.7% in the past year to a massive total reaching USD2.95 trillion. Switzerland comparatively had a 7.6% growth coming in at USD2.94 trillion. The drivers of this surge in growth can be attributed to the following events: a resurgent IPO market that returned Hong Kong to the top of global fundraising tables, a steady flood of capital from mainland China and market infrastructure reforms at the HKEX spanning equity financing, debt issuance and commodity trading. BCG’s analyst described Hong Kong’s rise as reflecting “the growing gravitational pull of Asian wealth and capital markets,” with cross-border flows becoming more concentrated in a smaller number of globally connected hubs.This momentum is expected to keep growing as denoted by BCG’s projection of annual cross-border wealth growth of approximately 9% for Hong Kong through 2030, suggesting the gap with competitors will widen rather than narrow. SIGN IFICAN CE: Wealth managers, private banks, external asset managers and financial institutions with regional ambitions this ranking is a commercial sign. The structural case for expanding cross-border wealth management operations in Hong Kong has arguably never been stronger. Firms that are watching cautiously from the sidelines should reconsider their capacity, product and positioning in the city before the next competitive cycle locks in market share. Enforcement News 2. SFC obtains disqualification orders against former directors of China Candy Holdings Limited When auditors flag discrepancies in company financial statements and management promises to fix them, independent directors cannot simply take those promises at face value. This was the central lesson delivered by the Court of First Instance this month, when it issued disqualification orders against four former directors of China Candy Holdings Limited (“ China Candy ”) (HK Stock Code: 8182 ), whose cash balances had been inflated by as much as 97% in its annual filings from 2016. The external control reviewers at China Candy identified problems in 2015 and 2016 regarding missing petty cash records, inconsistent management accounts and unresolved bank reconciliation gaps. The four directors, two executive chairpersons and two independent non-executives, confessed to passively relying on external professionals to identify and report potential red flags, which eventually led to the failure to properly scrutinise these issues and verify whether the proposed remedies had been implemented. As a result, their duties were abdicated by the court. Name Position P enalty Ms Yvonne HUNG (洪綺婉) Executive Director 33 months of disqualification Ms Li YUNA (李宇娜) Executive Director 24 months of disqualification Mr FANGUS Chu Wai Wa (朱偉華) Independent Director 12-month ban Mr ONG King Keung (王競強) Independent Director 12-month ban Following these sanctions the case is not over as the three alleged architects of the fraud, including the former chairman and CEO, are awaiting separate judgment following a hearing that concluded in March 2026. SIGNIFICANCE: Independent directors cannot outsource their oversight obligations to management or external advisers. When Internal control reviews surface issues, the senior management needs to track remediation to completion. Financial institutions should use this case to promptly review on how their senior management handle follow-through on audit and control findings 3. SFC obtains two-year disqualification order against former financial controller and company secretary of Qunxing Paper Holdings Company Limited This month, the SFC secured a two-year disqualification against Mr POON Tsz Hang, the former financial controller and company secretary of Qunxing Paper Holdings Company Limited (“ Qunxing ”), for disclosing false and misleading information regarding the annual turnover of Qunxing published in its financial statements from 2007 to 2011. Mr POON, the most senior finance office, held a unique vantage point from where the irregularities should have been visible. The SFC found that he failed to exercise basic oversight of the accounting and finance functions that reported to him. He also failed, in his company secretary role, to promptly escalate a critical restructuring event at a subsidiary that pointed to a sudden deterioration in the group’s finances. Furthermore, the company’s former chairman and his son were ordered by the Court back in 2018 to compensate investors, and HKD92 million was eventually distributed to approximately 27,000 eligible investors in 2023. Poon’s case represents the tail end of an enforcement effort that has now spanned nearly a decade. SIGNIFICANCE: Finance professionals in listed companies carry significant personal accountability. As the SFC has demonstrated it will pursue individuals’ years after misconduct occurs, CFOs and company secretaries should take note of the regulatory consequences of inadequate oversight and failure to escalate issues as they can lost beyond a company’s demise. 4. Movie producer Wong Pak Ming convicted of insider dealing in SFC’s prosecution Well-known film producer and chairman of Pegasus Entertainment Holdings, Mr WONG Pak Ming, was convicted for an insider dealing scandal this month following a 16-day criminal trial. Case Details In 2017, Mr WONG received serious, price-sensitive information about the sale of his controlling stake in the company, and within the same day received a HKD 10 million earnest payment from a prospective buyer. Immediately, upon receiving the earnest money, Wong transferred HKD 2 million to his sister, and advised her to buy over nine million Pegasus shares at prices well below Pegasus’ ensuing market price preceding the deal announcement. Based on the SFC’s calculations it was estimated that Wong’s sister earned more than HKD 1 million from these transactions. After a 16-day criminal trial at the Eastern Magistrate Court, Mr Wong was convicted of insider dealing whilst sentencing has been adjourned to June 9 th , 2026. The SFC commenced criminal proceedings against him in February 2025. Case Timeline Date 25 Aug 2017 25 Aug – 30 Aug 2017 25 Aug – 17 October 2017 25 October 2017 Event Mr. Wong received $10 million in earnest money. Transferred $2 million to his sister. Wong’s sister bought over nine million Pegasus shares below market price. Deal Announced SIGNIFICANCE: This case is a reminder that insider dealing does not require complex trading structures or anonymous offshore accounts. A simple word to family members backed by sensitive information is sufficient to constitute a serious criminal offence. Firms should ensure that information barriers are clearly communicated to senior individuals, and that personal trading policies explicitly address the prohibition on tipping family and friends. The SFC’s readiness to win criminal trials reinforces that consequences are not just regulatory, they are criminal. 5. SFC bans Nerico Brothers Limited’s former responsible officer, manager-in-charge and director Paul Wan Kai Leung for life over US$222 Million Client Asset Scandal The SFC has drawn a firm line under one of Hong Kong’s most egregious client asset scandals by permanently banning Mr Paul WAN Kai Leung, former responsible officer, manager-in-charge, and director of Nerico Brothers Limited (“ NBL ”) from the industry. Between mid-2020 and early 2021, NBL covertly used over USD 68 million of a single client’s funds for the firms gain, breaching the client agreement. The firm then went further, facilitating a fraudulent scheme misappropriating an additional USD 154 million of the same client’s money leading to a combined loss of more than USD 222 million. The orchestrator of this external scheme, Neo Ng Yu, had his firm’s license revoked and received a lifetime ban in separate proceedings. Furthermore, Mr WAN’s ban follows those already imposed on NBL’s director Jerff Lee Cheuk Fung and the connected principals of Amber Hill Capital in 2025. The SFC is systematically working through the management chain of this misconduct, making clear that a failure to prevent client asset misuse carries equal consequence as the perpetration of client asset misuse. SIGNIFICANCE: The effects of these actions send a powerful message to senior management: ignorance or passivity toward the misuse of client funds is not a valid exemption to avoid regulatory scrutiny. All responsible officers and managers must treat client asset protection as a front-line personal obligation, not a compliance department task. Regular independent reconciliation, escalation protocols, and board oversight of client asset controls are now considered as baseline requirements. 6. SFC Raids Two more Chinese Brokerages in Widening IPO Probe On May 27 the SFC cracked down on the investment banking sector. Enforcement officers raised the Hong Kong offices of CCB International (“ CCBI ”), local arm of China Construction Bank, and China Securities International (“ CSCI” )), a subsidiary of China Securities Co. Electronic devices and documents were seized for investigation into suspected misconduct linked to share offerings. The raids were notable as they represent a large-scale widening investigation rather than an isolated action. In March 2026, the SFC conducted what was described as one of the most significant enforcement sweeps of the investment banking sector in the past decade, targeting CITIC Securities and Guotai Junan International, during which eight individuals were arrested. The May raids followed 2 months later, targeting two more state-linked Chinese institutions. Following Hong Kong’s IPO boom, the city surged back to the top of global fundraising rankings, with a wave of new listings across mainland Chinese companies. The SFC has made clear that this boom cannot come at the cost of due diligence standards. The recent raids share the enforcement arm of this message. The SFC, CSCI and CCBI declined to comment and no formal charges have been filed and no fines announced at the time of writing. SIGNIFICANCE: Investment banks and underwriters active in Hong Kong’s ECM market should conduct internal audits of their IPO due diligence and listing advisory procedures. The SFC’s willingness to raid major state-linked institutions signals that firm size and market position provide no regulatory protection or special treatment. Financial institutions and licensed corporations that are proactive in self-reviewing and remediating errors will be better placed than those who wait to be investigated. Regulatory Updates 7. SFC steps up measures to address forged documents, money laundering risks and account opening standards On 22 May 2026, the SFC issued a circular outlining the expected controls for account opening and maintenance of client relationships. The China Securities Regulatory Commission has also specified relevant remediation plans for certain illegal cross-boundary securities, futures, and investment fund-related activities conducted in Mainland China. We have prepared an impact analysis on the expected controls for account opening and ongoing client relationship management. An SFC review of account opening practices across 12 securities has uncovered deficiencies in due diligence on account opening documentation and acceptance of forged documents making their way into client files. Firms accepting them are either unaware or choose not to look hard enough and consequently, the SFC has responded with a forceful circular that sets out binding expectations for every licensed corporation. The regulator identified a collection of recurring failures as a result of superficial due diligence at onboarding, inadequate handling of client introductions through overseas intermediaries, and a general culture of growth at expense of know-your-client procedures. The SFC is explicit that forged documents create pathways for money laundering and terrorist financing through Hong Kong’s securities infrastructure. The Circular Requirements: LCs must conduct an internal review to identify whether questionable or forged documents were accepted at account opening. The SFC has specified additional requirements for accounts held by Chinese Mainland Investors including: Closure of accounts with forged or questionable documents Closure of zero-balance dormant investment accounts Written investor declarations and a requirement that all settlements and fund movements use only the client’s own named bank accounts with eligible banks. The SFC also reminds investors that submitting false documents to open a brokerage account can constitute a criminal offence under the Hong Kong Crimes Ordinance. SIGNIFICANCE: The circular demands immediate action from firms to designate a senior individual to own the internal review, set a clear completion deadline, and document findings. For mainland investor accounts specifically, the additional measures apply to all new accounts going forward. The SFC has signaled that follow-up inspections and enforcement will follow firms that have self-identified and remediated problems will be far better positioned than those discovered to have done nothing. 8. FTSB and SFC conclude consultations on Virtual asset advisory and management regimes Hong Kong has spent the last three years building a legal framework for digital assets. On the 26 th of May, the Financial Services and the Treasury Bureau (“ FSTB ”) and SFC took the final significant step in that project, publishing consultation conclusions that pave the way for licensing regimes covering virtual asset advisory and management service providers. The framework is deliberately designed to mirror the conventional securities licensing structure: VA advisory services will be regulated in line with Type 4 (advising on securities) and VA asset management will track Type 9 (asset management). The “same activity, same risks, same rules” principle means that firms already operating in asset management or investment advisory should find compliance architecture even if underlying assets are new. The consultation drew 51 responses from a broad range of stakeholders. The FSTB and SFC have confirmed they are targeting the legislative bill itself to introduce into the legislative council before the end of 2026. The full suite of VA service providers, trading platforms, stable coin issuers, managers, advisors, etc. will sit within a regulated ecosystem upon the approval of the framework. SFC CEO Ms Julia LEUNG, described the development as “the final leg of our journey to complete the regulatory framework for digital assets” while Secretary Christopher Hui framed it as part of a broader effort to build a digital asset ecosystem “comparable to conventional finance.” SIGNIFICANCE: Firms currently providing VA advisory or portfolio management services in Hong Kong should start engaging with the SFC on pre-application discussions now to understand fit and scoping before the bill is tabled. For LCs that already hold Type 4 and Type 9, adding the VA versions may be smoother but still requires separate licensing and possible substantive obligations on licensing, conduct, and client asset handling. 9. SFC issues news guidance to help securities issuers prepare for upcoming uncertificated securities market regime Hong Kong’s securities market is on the verge of a structural reform that has been years in the making. Physical share certificates, a relic of the paper-era financial system, are being phased out. The SFC has published a Guidance Note to prepare issuers for the Uncertified Securities Market (“ USM ”) regime, which is scheduled to go live on November 16 th , 2026. Under the implementation of USM, issuers are obliged to maintain an approved securities registrar at all times. Currently, six companies have applied to becoming approved securities registrars. Issuers are also required to complete their amendment exercise by the first anniversary of USM launch by the 16 th of November 2027 or by the date of their first annual general meeting post USM launch. SIGNIFICANCE: Listed issuers should treat the November 16 th launch date deadline as an immediate action item. Issuers are recommended to appoint legal counsel and identify a preferred approved securities registrar from the applicant pool and build the USM amendments into their next AGM agenda. Proactive adoption is critical, delaying until 2027 will result in a missed AGM cycle and potential compliance risk. [End of ComplianceOne Newsletter – May 2026] 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

The topics discussed in this monthly newsletter for insurance are as follows: ComplianceOne Insurance Newsletter – August 2026 The topics discussed in this monthly newsletter are as follows: Regulatory Updates IA Clarifies that Mainland Residents’ Obligation to Declare and Pay Tax on Overseas Investment Income Has Always Existed IA’s Observations on Insurance Business Carried On with Premium Financing Facilities IA Requires Authorised Insurers to Adopt an Integrity Management Policy by 1 January 2027 Enforcement News IA and Hong Kong Police Force Conduct Joint Operation and Arrest 15 Persons for Suspected Fraudulent Practices at an FLMI Examination Centre Market News HKSAR Government Re-appoints Mr Clement CHEUNG as Chief Executive Officer of the IA First cohort of GenA.I. Sandbox++ announced, including insurance claims and anti-fraud use cases Regulatory Updates 1. IA Clarifies that Mainland Residents’ Obligation to Declare and Pay Tax on Overseas Investment Income Has Always Existed On 06 Aug 2026, multiple media outlets reported that cities such as Beijing and Hangzhou where individual income tax at 20% has been levied on Hong Kong insurance proceeds, covering insurance policy dividends (保險分紅) and prepaid premium interest (預繳保費利息). However, the taxation is not yet universal, with no unified enforcement standard. Source: Reuters ; South China Morning Post ; HK01 The Insurance Authority (" IA ") responded that the Government and the IA are closely monitoring the latest developments regarding mainland financial product tax arrangements. The IA emphasised that the requirement for Chinese residents to lawfully declare and pay tax on overseas investment income has always existed, and the market should not over-interpret or speculate. The IA further noted that Hong Kong’s insurance market remains mature and attractive to mainland clients, offering currency selection, global asset allocation, life planning and wealth succession services. The next-day (i.e. 07 Aug 2026) official Mainland line is separate: State Taxation Administration of PRC / Xinhua on 7 August 2026 SIGNIFICANCE: The IA and STA clarifications confirm that mainland tax residents’ duty to declare and pay tax on overseas investment income, including returns on Hong Kong policies, is a long-standing rule rather than a new levy aimed at Hong Kong. Enforcement does not yet appear uniform. Brokers in cross-border business should make sure mainland clients are told that filing and payment obligations may arise, and that marketing and oral explanations do not treat Hong Kong proceeds as tax-exempt. Stay close to further STA and local-bureau practice: a move toward consistent collection would change how certain savings and participating features are sold, even if the legal text does not change. 2. IA’s Observations on Insurance Business Carried On with Premium Financing Facilities On 20 August 2026, the IA issued a circular to chief executives of all authorised insurers carrying on long-term insurance business, setting out its observations on policies written with premium financing facilities. The Hong Kong Monetary Authority (“HKMA”) also issued a companion circular the same day to all authorized institutions, including those acting as licensed insurance intermediaries or as premium financing providers. The IA noted a marked rise in premium-financed long-term business in the first half of 2026. The increase was observed across a number of life insurers, and for some insurers premium financing has become the main source of new sales. Period Figure H1 2025 *Premium-financed business about 21% of new business premiums. H1 2026 *Premium-financed business about 36% of new business premiums (+15 percentage points). H2 2026 IA and HKMA schedule a further joint thematic inspection on premium financing. *For some products, PF Policies exceeded 80% of policy count or premiums. What is Premium-Financed Policies: Premium-financed policies (“PF Policies”) are commonly used for wealth management. Customer objectives and lapse behaviour can differ materially from non-PF policies. Because participating policyholders share returns from the same participating fund pool, practices on PF business can also affect the long-term outcomes of non-premium-financed policyholders. Principal risks identified What the IA observed Interest-rate and market sensitivity PF business is sensitive to interest rates and economic volatility. Leverage amplifies these risks for policyholders and insurers, raising lapse risk and putting pressure on liquidity in private credit, private equity and other alternatives. Correlated stress sales A concentrated PF book may trigger correlated asset sales at depressed prices in a stress scenario. Lapse assumption mismatch If a large number of customers surrender when target returns are reached, or when financing facilities mature, actual lapse experience may diverge from product-design assumptions and produce adverse financial effects for the insurer. Competitive leverage The industry has competed through larger premium discounts and higher “Day 1” surrender values, while banks have offered higher loan-to-value ratios. Recent IA reviews found sales materials suggesting a policyholder could achieve leverage of up to nine times by contributing only 10% of the premium. Supervisory expectations What is expected Authorised insurers Comply with the Insurance Ordinance and relevant regulatory requirements when underwriting new policies that use premium financing facilities. Authorised insurers - ORSA Enhance Own Risk and Solvency Assessment (“ORSA”) analysis of PF business, including appropriate lapse and economic stress and scenario testing. Insurers - sales and training Keep materials well balanced. Do not emphasise the leveraging benefit of premium financing. Disclose potential significant losses under adverse scenarios and other key downside risks clearly and prominently. Authorized institutions acting as intermediaries Keep abreast of changes in appointing principals’ materials and ensure the relevant information is properly disclosed and explained to customers. SIGNIFICANCE: Premium financing is no longer a niche wealth-management feature. It now accounts for about 36% of Hong Kong new business premiums. The circular is a clear signal that product design, illustrations, sales scripts, fund management and ORSA should treat PF books as a distinct risk cluster, not as ordinary participating business with a financing overlay. Insurers, banks and intermediaries should review materials, leverage disclosures, persistency assumptions and participating-fund fairness before the H2 2026 joint inspection. 3. IA Requires Authorised Insurers to Adopt an Integrity Management Policy by 1 January 2027 On 31 August 2026, the IA issued a circular to chief executives of all authorised insurers. Each authorised insurer must formulate an Integrity Management Policy, or enhance its existing policy, by 1 January 2027 . The IA’s position is that sound corporate governance and internal controls are essential to the healthy development of the insurance industry. Integrity standards must be clearly communicated and built into the insurer’s control system through: reporting and enforcement of non-compliance; and regular review of the integrity policy and related procedures Essential governance aspects in the sample policy ( Annex ) Pillar Expectation Anti-bribery Prohibit the offer, solicitation or acceptance of advantages. Conflicts of interest Avoid conflicts where possible. Declare and properly manage conflicts that cannot be avoided. Confidentiality Preserve confidential information of the insurer, policyholders and counterparties. Enforcement and reporting Report and enforce non-compliance, including corruption. Provide assistance to regulators and law enforcement agencies. Covered Persons The policy is expected to bind directors, controllers, key persons in control functions, staff and agents. Insurance Broker Companies are not required to adopt their own policy under this circular, but counterparties may still raise anti-bribery, conflicts, confidentiality and reporting standards in agency agreements and due diligence. SIGNIFICANCE: This circular is addressed to authorised insurers only. Licensed insurance agencies and broker companies are not required to adopt their own Integrity Management Policy under this circular. That said, intermediaries should not treat the development as irrelevant. Appointed agents of an insurer fall within that insurer’s policy once it is in force, and insurers may cascade the same integrity standards through agency agreements, codes of conduct, training and monitoring. Brokers dealing with those insurers may also see tighter counterparties’ expectations on anti-bribery, conflicts, confidentiality and reporting. Enforcement News 4. IA and Hong Kong Police Force Conduct Joint Operation and Arrest 15 Persons for Suspected Fraudulent Practices at an FLMI Examination Centre On 27 August 2026, the IA and the Hong Kong Police Force conducted a joint enforcement operation against an examination centre operated by the Greater China Wemedia Association Limited. The centre organised the Fellow, Life Management Institute (“ FLMI ”) examinations awarded by the Life Office Management Association (“ LOMA ”). The IA announced the operation on 28 August 2026. The operation covered searches of nine locations and the arrest of 15 persons, including three current and three former licensed insurance intermediaries. Cheating in Exams Police identified a syndicate of three local companies that marketed “intensive revision classes” and a “guaranteed pass”. Candidates were charged an extra HK$14,000 on top of the official examination fee of about HK$20,000. The alleged method was to: install remote-control software on candidates’ examination computers; arrange syndicate staff as invigilators; and have off-site operators sit the online paper while the candidate remained seated, to create the appearance of a normal sitting. Source: stheadline 29 Aug 2026 Temporary IA Non-Recognition of FLMI Because there were indications that the suspected malpractice had continued for some time, and that LOMA had not exercised effective monitoring, the IA immediately suspended recognition of the FLMI as a qualification meeting the educational requirements for an insurance intermediary licence. The IA will also review in detail all cases in which the qualification was obtained through the examination centre concerned. SIGNIFICANCE: This is the first public use of the 2024 IA and Police joint enforcement MoU and goes directly to fitness and propriety. With immediate effect, FLMI is not recognised as meeting the educational requirements for an insurance intermediary licence. Firms should not treat an FLMI certificate as a valid licensing credential until the IA reinstates recognition. The IA has also said it will review, case by case, qualifications obtained through the affected centre, which may lead to follow-up on existing licences. Identify staff and appointed agents who used FLMI from that centre, keep the records, and be ready for licensing queries. Markets News 5. HKSAR Government Re-appoints Mr Clement CHEUNG as Chief Executive Officer of the IA On 14 August 2026, the HKSAR Government announced the reappointment of Mr Clement CHEUNG Wan-ching (張雲正) as Chief Executive Officer of the IA for a further term of three years, from 15 August 2026 to 14 August 2029. Mr CHEUNG was first appointed as CEO in August 2018. He currently serves as a member of the Executive Committee of the International Association of Insurance Supervisors and as a member of the Asian Forum of Insurance Regulators. Sources: HKSAR Government press release (14 August 2026) IA press release (14 August 2026) SIGNIFICANCE: Continuity of leadership matters for the regulatory calendar, such as RBC refinements, ILS and captives, and the conduct and technology agenda. The more immediate signal is the one CHEUNG gave on reappointment: reduce concentration on mainland-visitor demand and widen the regional client base. 6 . First cohort of GenA.I. Sandbox++ announced, including insurance claims and anti-fraud use cases The HKMA, the Securities and Futures Commission, the IA and the Mandatory Provident Fund Schemes Authority, together with the Hong Kong Cyberport Management Company Limited, announced the first cohort of the Generative Artificial Intelligence Sandbox++ (“GenA.I. Sandbox++”). From nearly 100 proposals, 36 use cases were selected, involving 30 financial institutions and 27 technology partners. Selection turned on innovation, technical complexity and potential value to the industry, together with advice from an academic selection committee. Participants will be onboarded to a designated platform at Cyberport’s Artificial Intelligence Supercomputing Centre. Technical trials start later in 2026. This cohort focuses on agentic A.I. systems that go beyond content generation and can take on greater autonomy. Testing will cover end-to-end processes including customer onboarding, payments, insurance claims and customer interactions. Building on the earlier “A.I. vs. A.I.” theme, the pilots will also examine how one A.I. application can provide dynamic oversight of another. Illustrative themes Theme Example use cases Risk management Real-time A.I. judge for chatbots; multimodal A.I. for compliance review; A.I.-enhanced due diligence; A.I. cybersecurity tools; A.I. compliance and regulatory-oversight assistants. Anti-fraud Fraud simulation and defence reinforcement; multi-agent fraud detection and behavioural risk monitoring; intelligent fraud prevention for digitally altered medical documentation. Customer experience Agentic payments; multi-agent wealth management; A.I. knowledge assistant for medical claims; A.I. engagement platforms for MPF scheme members. Insurance-sector participants in the first cohort include: AXA China Region Insurance Company (Hong Kong) Limited; FWD Life Insurance Company (Bermuda) Limited; HSBC Life (International) Limited; BOC Group Life Assurance Company Limited; and Manulife (International) Limited. For more details, please refer to the Annex(s) Mr Clement CHEUNG, Chief Executive Officer of the IA, said: “ I am very impressed by the quality and diversity of proposals originating from the insurance industry which reflect a commitment to deploy advanced technologies for the betterment of policyholders. The GenA.I. Sandbox++ has inspired new ideas, generated practical insights and deepened cross-sector collaboration. The IA will strive to reinforce the position of Hong Kong as an international innovative and technology centre under the National 15th Five-Year Plan through progressive expansion of the AI Cohort Programme. ” SIGNIFICANCE: The first cohort confirms that agentic A.I. in claims, anti-fraud and customer servicing is moving from concept to supervised testing. Firms that are not in the cohort should still prepare governance, model-risk and conduct frameworks. Sandbox learnings are intended to be shared more widely through the IA’s AI Cohort Programme, and those standards will not stay confined to the 30 participating institutions. [End of ComplianceOne Insurance Newsletter – August 2026] 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) 3955 0277 www.complianceone.hk

The topics discussed in this monthly newsletter for insurance are as follows: ComplianceOne Insurance Newsletter – February 2026 The topics discussed in this monthly newsletter are as follows: Regulatory Updates Anti-Money Laundering and Sanctions Updates Market News Hong Kong’s Single-Family Offices total surpasses 3,380, Contributing Approximately $12.6 Billion Annually to Hong Kong’s Economy IA Launches Public Consultation on Enhancements to the Risk-based Capital Regime Enforcement News IA Reprimands and Fines Three Licensed Broker Companies HK$429,000 Total for Failures in AML/CFT Requirements Regulatory Updates 1. Anti-Money Laundering and Sanctions Updates In early March 2026, the Insurance Authority (“ IA ”) issued several key circulars and updates on anti-money laundering (“ AML ”) and counter-financing of terrorism (“ CFT ”) matters, accessible via the dedicated IA page for 2026 AML circulars. These updates primarily relate to international sanctions regimes, United Nations measures, and Financial Action Task Force (“ FATF ”) guidance, requiring prompt attention from authorized insurers and licensed insurance intermediaries (especially those handling long-term business). Circulars / Sanction List Updates Contents 3 March 2026 Circular on United Nations (Anti-Terrorism Measures) Ordinance [G.N. (E.) 11 of 2026] Significant Updates: The updated Schedule specifies the following individuals (no entities or groups are added in this update): QDi.001: Mohammed Salahaldin Abd El Halim Zidane , who’s Responsible for security of Usama bin Laden. QDi.002: Amin Muhammad Ul Haq Saam Khan , who’s Security coordinator for Usama bin Laden. QDi.003: Salim Ahmad Salim Hamdan , who’s supporting acts or activities of Al-Qaida and Usama bin Laden. These designations trigger asset freezing, prohibitions on making funds or financial services available, and other restrictions under the Ordinance. 3 March 2026 Circular on Statements issued by the Financial Action Task Force (" FATF ") Informs insurance institutions (“ IIs ”) of the FATF Plenary outcomes (11–13 February 2026), including: High-Risk Jurisdictions subject to a Call for Action : DPRK (Democratic People's Republic of Korea) and Iran remain listed due to ongoing strategic deficiencies and proliferation/terrorism financing risks; countermeasures and enhanced vigilance required. Myanmar continues under enhanced due diligence with potential future countermeasures if no progress by June 2026. Jurisdictions under Increased Monitoring : IIs must factor these into risk assessments and monitor the FATF website for changes. Where the Virgin Islands (UK) (BVI) still remain in the list. Emerging focus areas: Cyber-enabled fraud, virtual assets, offshore VASPs, stablecoins, and unhosted wallets (with related FATF reports expected in March 2026). 2 March 2026 United Nations Sanctions (Sudan) Regulation 2013 [G.N. (E.) 10 of 2026] Significant Updates: United Nations Sanctions (Sudan) Regulation 2013 (Cap. 537 sub. leg. BF), notice updates the list of relevant persons specified under section 31 of the Regulation. It reflects amendments or additions to designations related to Sudan sanctions (imposed by UN Security Council resolutions concerning the situation in Sudan, including arms embargoes, asset freezes, and travel bans on certain individuals or entities linked to conflict or violations). 2 March 2026 Updated list of relevant persons and entities under the United Nations Sanctions (ISIL and Al-Qaida) Regulation Features the latest consolidated list (as at 27 February 2026) of designated individuals and entities linked to ISIL (Da'esh) and Al-Qaida; Insurers and intermediaries must screen clients and transactions against this list to avoid sanctions violations. SIGNIFICANCE: These updates reinforce Hong Kong's alignment with global standards set by the FATF and UN, helping to safeguard the insurance sector against money laundering, terrorism financing, and proliferation risks. Insurance companies, agents, and brokers need to be aware of immediately updating their name screening databases to include the latest UN Security Council Consolidated List, FATF High-Risk Jurisdictions subject to a Call for Action, and FATF Jurisdictions under Increased Monitoring, while conducting enhanced due diligence on high-risk elements, incorporating emerging risks into assessments, and ensuring staff training for ongoing compliance. Timely compliance is essential to avoid regulatory breaches, reputational damage, or enforcement actions by the IA. With increasing scrutiny on virtual assets and cyber fraud, these notices underscore the need for robust screening, risk assessment, and staff training to maintain policyholder protection and industry integrity in an evolving threat landscape. Markets News 2. Hong Kong’s Single-Family Offices total surpasses 3,380, Contributing Approximately $12.6 Billion Annually to Hong Kong’s Economy On 10 February 2026, the Financial Services and the Treasury Bureau (“ FSTB ”) and Invest Hong Kong (“ InvestHK ”) jointly released findings from the Market Study on the Family Office Landscape in Hong Kong , commissioned by InvestHK and conducted by Deloitte. The study estimates that 3,384 single-family offices were operating in Hong Kong as of the end of 2025, marking an increase of 681 offices (over 25%) since the end of 2023. Two major affects to the Hong Kong Market: Economic Impact: Single-family offices contribute approximately HK$12.6 billion annually to the local economy through operating expenditures alone and directly employ over 10,000 full-time professionals. When including multifamily offices and supporting service providers, the overall economic benefits are expected to be substantially greater. Hong Kong’s Wealth Management Position: As of end-2024, assets under management in Hong Kong reached approximately HK$35 trillion (about US$4.5 trillion). The city ranked second globally in the number of ultra-high-net-worth individuals as of June 2025, reinforcing its status as a leading destination for family offices. Key highlights from the announcement and study: Upcoming measures in 2026 Upcoming measures include legislative proposals in the first half of 2026 to expand preferential tax regimes for funds and single-family offices to cover additional asset classes such as precious metals, loans, private credit investments, and digital assets. Achieving the new target set out in the Chief Executive's 2025 Policy Address The Government aims to assist more than 220 family offices to establish or expand in Hong Kong from 2026 to 2028. *The target was set out in the Chief Executive's 2025 Policy . Comments from Representatives of FSTB and InvestHK Mr Christopher HUI, Secretary for Financial Services and the Treasury, attributed the sustained growth to Hong Kong’s advantages under the “one country, two systems” framework, including its role as a leading global asset and wealth management hub with predictable environment, connectivity to the mainland and the world, and supportive policies. Ms Alpha LAU, Director-General of Investment Promotion at InvestHK, highlighted strong overseas interest (particularly from Europe and Southeast Asia) in Hong Kong’s flexible investment environment, no geographical restrictions on investments under the preferential tax regime, high privacy (no general licensing requirement for single-family offices), and tax incentives. SIGNIFICANCE: The surge in single-family offices underscores Hong Kong’s strengthened position as Asia’s premier wealth and asset management hub, attracting diverse global capital through targeted policy enhancements, tax competitiveness, privacy protections, and strategic connectivity. The substantial annual economic injection of HK$12.6 billion (via operating expenditures) and direct employment of over 10,000 professionals highlight the sector’s growing role in driving local financial services growth, job creation, and broader ecosystem development. With forthcoming tax expansions (including digital assets) and ambitious growth targets, these developments reinforce Hong Kong’s appeal to ultra-high-net-worth families amid global shifts toward sustainable wealth management and intergenerational planning, further solidifying its status as a trusted international financial centre. 3. IA Launches Public Consultation on Enhancements to the Risk-based Capital Regime On 11 February 2026, the IA launched a public consultation on proposed amendments to the Insurance (Valuation and Capital) Rules (Cap. 41R) , applied for authorized insurers only (excluding licensed insurance agencies and licensed insurance broker companies). This follows a comprehensive review of the Risk-based Capital (“ RBC ”) Regime, which commenced on 1 July 2024. The proposed changes seek to refine the framework while preserving strong prudential safeguards for policyholders. Key areas include: Preferential capital treatment for eligible infrastructure investments, to encourage financing that supports local economic development. Revisions to the required capital amounts for general business lines. Technical adjustments for indexed universal life (“ IUL ”) business. Specific treatments for crypto assets (with a proposed 100% risk charge in related discussions) and specified stablecoins, reflecting evolving exposures to digital assets. These refinements aim to enhance Hong Kong’s position as a competitive global risk management hub, attract more international activity, and align capital requirements with market innovations and emerging asset classes. The consultation paper is available on the IA website. Interested parties, including insurers, intermediaries, industry associations, and the public, are invited to submit comments by 10 March 2026 via: email to rbc@ia.org.hk ; or by post to the IA office at 19/F, 41 Heung Yip Road, Wong Chuk Hang, Hong Kong. SIGNIFICANCE: This consultation represents a forward-looking adjustment to the RBC Regime, balancing innovation with stability. By incentivizing infrastructure investments and clarifying treatment of modern assets like crypto and stablecoins, the proposals support Hong Kong’s strategic goals in sustainable development and digital finance. They also reinforce the city’s attractiveness to multinational insurers and investors, while ensuring continued robust protection for policyholders amid global regulatory evolution. Industry participants are encouraged to engage actively to shape these important enhancements. Enforcement News 4. IA Reprimands and Fines Three Licensed Broker Companies HK$429,000 Total for Failures in AML/CFT Requirements On 4 March 2026, the IA announced disciplinary action against three licensed insurance broker companies for breaches of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance ( Cap. 615 ). The affected companies are: Insurance Broker Companies’ Name License Number ASI-Union Global Assets Management Ltd. FB1534 Macroscopica International Wealth Management Ltd. FB1557 Bay Union Insurance Brokers Limited (formerly known as Huize Hong Kong Insurance Broker Limited) FB1661 The contraventions include: Failure to establish and maintain effective internal procedures for conducting customer due diligence (“ CDD ”). Failure to determine whether customers were politically exposed persons (“ PEPs ”) or whether a person was purporting to act on behalf of the customer. Failure to keep relevant records as required. In addition to the companies, three related individuals were reprimanded for their involvement in these compliance failures. The total pecuniary fine imposed across the three broker companies amounts to HK$429,000. The IA noted that the companies have since implemented effective remedial actions to address the identified deficiencies. SIGNIFICANCE: No evidence of actual money laundering or terrorist financing was reported in connection with these cases, but the breaches highlight gaps in frontline controls that could expose the insurance sector to misuse. Broker companies play a critical role as the primary point of contact with policyholders and are essential in preventing the insurance industry from being exploited for financial crime, thereby protecting Hong Kong's reputation as an international financial centre. This enforcement action reinforces the IA's ongoing priority on robust AML/CTF compliance among insurance intermediaries, particularly broker companies. As intermediaries interact directly with clients, effective CDD, PEP screening, and record-keeping are foundational to preventing financial crime and maintaining trust in Hong Kong's insurance market. The penalties serve as a reminder that even post-remediation cooperation does not eliminate accountability for systemic control weaknesses. With increasing regulatory scrutiny on financial crime risks, licensed entities are urged to review and strengthen their AML/CTF frameworks to avoid similar outcomes, including potential reputational damage, higher supervisory intensity, or escalated sanctions in future cases. [End of ComplianceOne Insurance Newsletter – February 2026] 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

The reform introduces new and expanded SFC regulated activities for Hong Kong OTC derivatives, expected to take effect in H2 2027. ComplianceOne's Impact Analysis : Commencement of OTC Derivatives Licensing Regime (August 2026) Disclaimer: The content and recommendations contained in this document are solely our internal opinions and guidelines, for internal reference and evaluation purposes only. This document does not constitute professional or formal legal advice. The information contained herein is subject to further amendments or updates by the Securities and Futures Commission or other relevant regulatory authorities. Our company assumes no legal responsibility for the content of this document. Licensed corporations should make independent judgments based on their own circumstances and the latest regulatory requirements when referring to or using this document, and are advised to seek independent legal advice from qualified lawyers or professional advisors if necessary. Our company reserves the right to modify or update this document at any time without prior notice. Table of Contents 1.......... Background 2.......... Scope and Licensing Implications 3.......... Proposed RA11 OTCD Dealer Licence Application Requirements 4.......... Transitional Arrangements 5.......... Key Takeaways and Next Steps for Industry 6.......... How we can help 1. Background The Securities and Futures Commission (“ SFC ”) is implementing the major component of OTC (“ Over-the-Counter ”) derivatives (“ OTCD ”) reforms by introducing: Two new regulated activities – Type 11 (dealing in or advising on OTC derivative products) and Type 12 (providing client clearing services for OTC derivative transactions); and Two expanded regulated activities – Type 7 (automated trading services) and Type 9 (asset management) extended to cover OTC derivative products. The SFC estimates the new regime will become effective in the second half of 2027 . Licensed corporations (“ LCs ”) is highly encouraged to assess whether their existing or planned activities fall within the scope of these new or expanded regulated activities and take preparatory action well in advance of the commencement date. 2. Scope and Licensing Implications LCs should carefully consider whether their proposed / existing business activities trigger licensing requirements: Activity Licensed Required? Type of License Required Dealing in OTC equity derivatives on agency basis ( Note 1 ) × RA1 Dealing in OTC futures derivatives on agency basis × RA2 Dealing in OTC equity derivatives on principal basis √ RA11 Dealing in interest rate derivatives, credit derivatives, commodity derivatives, etc. √ RA11 Advising on OTCD products √ RA11 Proprietary clearing of OTCD positions × RA12 license not required Providing clearing services to third-party clients through a CCP √ RA12 Operating an electronic trading platform for OTCD products √ RA7 (Extended) Providing execution-only ATS for OTCD products √ RA7 (Extended) Managing portfolios containing OTCD products for external clients √ RA9 (Extended) Managing OTCD portfolios for wholly-owned group companies × RA9 Note 1 Licensing Implications Under the new OTC derivatives licensing regime, the SFC draws a clear line between acting as agent and acting as principal when dealing in OTC equity derivatives. Agency basis executes transactions on behalf of its clients , does not become a counterparty to the trade, and does not assume principal market or credit risk . In this capacity, the activity falls outside the scope of the new Type 11 regulated activity and remains subject to the existing Type 1 (dealing in securities) and Type 2 (dealing in futures contracts) licences Principal basis the firm enters into OTC equity derivative transactions as a direct counterparty to its clients, taking on proprietary risk and effectively “dealing” in those products on its own account. This constitutes a dealing activity that squarely triggers the new Type 11 licensing requirement. For non‑equity OTC derivatives (e.g. interest rate, credit, commodity derivatives), however, the agency / principal distinction is generally not the determining factor – any dealing or advising in such products will typically require a Type 11 licence, regardless of whether the firm acts as agent or principal , unless a specific exemption applies. Firms should therefore carefully assess their business models and booking arrangements to determine whether they are acting as agent or principal, particularly for OTC equity derivative transactions, as this distinction directly affects their licensing obligations under the new regime. 3. Proposed RA11 Licence Application Requirement Activity Licensed Required? Activity Licensed Required? Capital Requirement Paid-Up Share Capital: HK$30 million Required Liquid Capital: HK$15 million Paid-Up Share Capital: HK$60 million Required Liquid Capital: HK$30 million Below specified thresholds [1] Tangible Capital: HK$500 million Required Liquid Capital: HK$78 million In any other case Tangible Capital: HK$1 billion Required Liquid Capital: HK$150 million FRR Computation Approach Basic approaches (BMRA / BOCCRA) Standardized approaches (SMRA / SOCCRA) Risk Management Resources Low risk profile without taking principal position Less complex risk data aggregation and calculation Require use of complex calculations and more advanced risk data Need to maintain sophisticated risk management systems RO Competence At least 3 years of relevant industry experience within the past 6 years Familiar with the risk management and capital standards for the OTCD regime [1] HK$600 million of aggregate gross notional amount of OTCD transactions in 12 months 4. Transitional Arrangements To avoid market disruption, the SFC has designed a 6-month transitional arrangement commencing in Jul 2027 (estimated) to enable existing qualified market participants to continue their activities before obtaining the full licence under the new regime. Note 2 Applicable for LC, RO and LR with no licence for the new (Type 11 and 12) or expanded RA (Type 7 and 9) Note 3 Applicable for LC, RO and LR with existing license for RA9 which managing portfolios containing OTCD products for external clients Note 4 LC will be deemed as Qualified if: Has been carrying on the activity for at least 2 years immediately before the commencement date Has at least 2 eligible ROs RO will be deemed as eligible RO if: Has been carrying on the activity for at least 2 years immediately before the commencement date 5. Key Takeaways and Next Steps for Industry Senior management should ensure the following five readiness steps are completed before H2 2027: Complete a thorough review of whether current activities fall within Type 11, 12, or expanded Types 7 and 9. Determine whether the firm qualifies for the deeming mechanism. Review legal entity and booking arrangements and assess where risks are booked and managed. Evaluate how the broader regulatory framework applies to the business. Ensure governance, risk management, and internal controls are appropriate for a regulated environment. 6. How we can help Our team consists of experienced professionals with deep expertise in compliance, risk management, and policy review and development. We can accurately identify gaps between the regulatory expectations outlined in the relevant circulars and your company’s existing policies and procedures. With a thorough understanding of the complexities of regulatory requirements, we provide tailored solutions and analyses to meet your specific needs and address any material deficiencies. Our expertise ensures that your company maintains full compliance with regulatory standards while comprehensively elevating your compliance practices to a higher level. If you have any questions, please feel free to contact our compliance support team at any time. [End of ComplianceOne's Impact Analysis: Commencement of OTC Derivatives Licensing Regime – Augest 2026] 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 . 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