Augmenting the accountability of licensed corporations’ senior management

Augmenting the accountability of senior management

Discussion of the SFC circular on the MIC regime, detailing senior management’s accountability and obligations in LCs

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 Augmenting the accountability of licensed corporations senior management

On 16 December 2016, the Securities and Futures Commission (SFC) released Circular to Licensed Corporations Regarding Measures for Augmenting the Accountability of Senior Management, accompanied by a set of FAQs. The circular introduces the new Managers-In-Charge (MIC) initiatives to heighten the accountability of senior management of all licensed corporations (LCs), and promote awareness of senior management obligations under the current regime.

The concept of holding senior management of an LC accountable for misconduct is nothing new, and the SFC’s recent circular is built upon existing regulations. Through this new initiative, the SFC aims to heighten MICs’ awareness of their obligations and liability under the law, regardless of whether they are licensed. The SFC has taken steps to foster a sense of genuine responsibility and clear accountability for LCs’ activities and to drive proper conduct and behaviour. The SFC hopes to see front-line business managers take on responsibility for compliance, instead of solely relying on the compliance department, and set a tone from the top that consistently places client interests and the integrity of the market at the centre of business decisions. 

This client alert looks at the details of implementing the MIC regime, including the timeline, criteria for selecting a manager in charge, the SFC’s expectations, as well as how KPMG can assist.  

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