Ongoing Compliance Form for Filing of Material Breaches

The Securities and Futures Commission of Hong Kong, SFC, has issued an entirely new form for the reporting of various breaches under the Code on Unit Trusts and Mutual Funds and under the SFC’s Overarching Principles Section of its Handbook. These breaches include, among others, violations of investment restrictions, derivative exposures, position limits, or information reporting.
The new form thereby requires information on
– the investment fund affected by the breach (fund name, custodian, fund management company, etc.);
– type of breach occurred and the respective date on which it occurred;
– the duration of the breach and the impact upon investors;
– the party responsible for the breach and the party who detected the breach; and
– the arrangements made by the investment fund to compensate for breaches that resulted in NAV errors, if necessary.
Unlike the other form for reporting material breaches (EventID 24518), this form requires detailed information on possibly affected Hong Kong investors, such as the total number of HK investors having subscribed during the (breach) period or the total number of redeeming investors during the (breach) period. The form also requires information on ILAS that were invested in the fund during the time that the breach occurred.
—
This form must only be filed by fund management companies, if there were Hong Kong investors invested in the fund at the time a breach occurred.