Charltons

On 20 October 2023, Julia Charlton presented a webinar on Hong Kong Regulation of Virtual Asset Trading Platform. This webinar will cover Hong Kong’s licensing regime for virtual asset trading platforms, the ongoing obligations and various restrictions on their activities once they become licensed, the statutory offences that cover misconduct involving virtual assets and the latest development of the JPEX scandal. This webinar will cover the following topics in detail: - Introduction to the licensing regimes under the AMLO & SFO; - Key Definitions: virtual assets, VASPs etc; - The Licensing Requirements: Financial Resources; Responsible Officers; Licensed; Representatives; Ultimate Owners & Substantial Shareholders, MICs; - External Assessment Reports; - Licensing Conditions: Token Admission Review Committee; VA due diligence and admission criteria; - Conditions for offering VA for retail trading; - Prohibited activities; - VASP’s obligations re: suitability, disclosure, handling client assets, insurance & compensation; - AML and CTF obligations and Application of Travel Rule to VA transfers; - VASP’s ongoing reporting obligations & CPT requirements; - Market misconduct offences; - AMLO licensing regime’s transitional arrangements; and - Latest development of the JPEX scandal.

On 26 September 2023, the Hong Kong Stock Exchange (HKEX) published a Consultation Paper setting out reforms to the GEM Listing Rules aimed at encouraging more companies to list on GEM. The proposal includes an introduction of an alternative listing eligibility test to allow the listing of high growth enterprises that cannot meet GEM’s positive cashflow test, the re-introduction of a streamline transfer mechanism for GEM issuers to transfer to the Main Board, and to align certain GEM Listing Rules requirement with those to the Main Board. This webinar covers the HKEX’s proposals to the GEM Listing Reforms in detail, including 1. introduction and overview of the proposed GEM Listing Reform; 2. background of current GEM market and stakeholder feedback; 3. the proposed new alternative financial eligibility test for initial listing; 4. the proposed post IPO lock up period on controlling shareholders; 5. the proposed amendments to the continuing obligations; and 6. the new streamlined transfer mechanism to the main board.

On 8th August 2023, the Securities and Futures Commission (SFC) published its Consultation Conclusions on the changes to Hong Kong's insider dealing regime under the Securities and Futures Ordinance (SFO). The current insider dealing regime only covers securities that are listed on the Hong Kong Stock Exchange, and Courts often have to resort to section 300 of the SFO on prohibiting fraudulent or deceptive schemes in transactions involving securities for cases that involve securities that are listed on overseas markets. The Consultation Conclusions expands the insider dealing provisions to also include dealings in overseas listed securities and derivatives to broaden its territorial scope.

The Hong Kong Securities and Futures Commission (SFC) published its Consultation Paper on the proposed amendments to the Codes on Takeovers and Mergers and Share Buy-backs in May of this year. The consultation proposed a number of changes, including the codification of various existing practices of the Takeovers Executive, housekeeping amendments and green initiatives aimed at cutting the number of paper documents published under the Codes. This webinar covers the SFC’s proposed revisions to the Codes in detail, including those to: -the definitions of “close relatives”, “voting rights”, “derivatives” and “on market share buy-backs”; - the provisions on “irrevocable commitments”; - give the Executive express power to issue “Put Up” or “Shut Up” orders; - align the timing for the return of share certificates with the timing of payment of offer consideration; - prohibit offer price disclosure in Talks Announcements; - require special deal disclosures in firm intention announcements; - introduce a number of green initiatives. #SFC #takeoverscode #sharebuyback

Charltons and Alsuwaidi & Company hosted a webinar entitled “A Tale of Three Cities: Overview of the legal systems of Abu Dhabi, Dubai and Hong Kong”. Julia Charlton was joined by the managing partner of Alsuwaidi & Company, Mr Mohammed Alsuwaidi and senior associates and representatives of the firm. Alsuwaidi & Company is a UAE law firm established over 20 years ago with offices across the UAE, which has represented the interests of over 500 clients in the Gulf Cooperation Council and beyond. Speakers: Mr. Mohammed Alsuwaidi, Managing Partner, Alsuwaidi & Company, UAE, Ms. Julia Charlton, Founding & Principal Partner, Charltons Solicitors, Hong Kong SAR Mr. Ali Alraeesi, Partner, Alsuwaidi & Company UAE Mr. Nidal Alsayed, Head of Banking & Islamic Finance, Alsuwaidi & Company, UAE Mr. Suneer Kumar, Head of Corporate & Commercial, Alsuwaidi & Company, UAE Ms. Vida Grace Serrano, Corporate & Commercial Senior Associate, Alsuwaidi & Company, UAE Mr. Rajiv Suri, IP, Corporate & Commercial Senior Associate, Alsuwaidi & Company, UAE Mr. Craig Cothill, Senior Associate, Alsuwaidi & Company, UAE Moderator: Mr. Patrick M Dransfield, Client Relations Director, Alsuwaidi & Company

The Hong Kong Securities and Futures Commission has recently released its consultation conclusions on the Proposed Regulatory Requirements for Virtual Asset Trading Platform Operators Licensed by the Securities and Futures Commission in February 2023. This finalises the detailed regulatory requirements for Virtual Asset Trading Platforms operators under the SFC licensing regime. Along with the licensing regime under the new Part 5B of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, which came into effect on 1 June 2023, Hong Kong now has two licensing regimes for entities carrying on a business of operating a virtual asset trading platform. This webinar discusses the requirements for platform operators to become licensed under the two regimes and their ongoing obligations under them. It covers the following topics: ∙ the overview of the Hong Kong Virtual Asset Service Provider licensing regime and the background to the SFC consultation conclusions on the proposed regulatory requirements for Virtual Asset Trading Platform operators; ∙ retail access to licensed virtual asset trading platforms; ∙ insurance or compensation arrangements; ∙ trading in virtual asset derivatives; ∙ other adaptations to existing requirements incorporated into the SFC’s Guidelines for Virtual Asset Trading Platform Operators; and ∙ the transitional arrangements under the licensing regimes.

The Securities and Futures Commission of Hong Kong has recently released a consultation paper on proposed regulatory requirements for virtual asset trading platform operators. In light of the rapid growth of virtual assets, it has become increasingly crucial to ensure that these platforms operate fairly, transparently, and securely, with the interests of investors being protected. The proposed regulatory framework, which would require virtual asset trading platforms to be licensed by the SFC, aims to address this need by imposing a range of requirements on these platforms. One of the key requirements proposed in the paper is the implementation of measures to prevent market manipulation, which is a significant risk associated with virtual asset trading. Additionally, the proposed framework would require virtual asset trading platforms to ensure the safe custody of assets, as well as to disclose key information to investors. This would enable investors to make informed decisions and better manage their risks. In addition to these requirements, the consultation paper also sets out a range of requirements for the management of risks associated with virtual assets, including cybersecurity and operational risks. This is particularly important given the increasing frequency and sophistication of cyber attacks in today's digital landscape. Overall, the consultation paper proposes a robust regulatory framework that seeks to address the unique risks and challenges posed by virtual asset trading. It is open for public comment until 31 May 2023, providing interested parties with ample opportunity to provide feedback and shape the future of virtual asset trading in Hong Kong. #sfc #hongkonglaw #virtualassettradingplatform Timecodes: 00:00 Julia Charlton's welcome speech 00:14 Background to Hong Kong’s New Licensing Regime for VASPs 05:33 Who will require a licence for providing VA service? 06:51 VASP Licensing Requirement under the AMLO 08:17 What is the definition of “Virtual Assets”? 10:03 The VATP Guidelines 10:58 Fit and Proper Test 12:04 General Principles Outlined in the VATP Guidelines 13:42 Whether Retail Investors should be allowed access to Licensed VA Trading Platforms 16:57 Onboarding requirements 19:24 Suitability Obligation 21:59 Solicitation or recommendation of VAs 23:13 Solicitation or recommendation of complex products 25:10 Requirements Concerning Governance of Licensed VA Trading Platform Operators 27:29 General token admission criteria 30:00 Specific token admission criteria – the relevant virtual assets must be an “eligible large-cap virtual assets” 32:47 Other Hong Kong token due diligence requirements 34:34 Disclosure Obligations (I) 36:02 Disclosure Obligations (II) 38:35 Disclosure Obligations (III) 40:04 SFC’s proposed requirements for insurance or compensation arrangements 42:50 Trading in virtual asset derivatives 43:33 Adaptations to existing requirements to be incorporated into the VATP Guidelines (I) 46:34 Adaptations to existing requirements to be incorporated into the VATP Guidelines (II) 47:20 Adaptations to existing requirements to be incorporated into the VATP Guidelines (III) 48:28 Guideline on Anti-Money Laundering and Counter-Financing of Terrorism 50:09 Virtual asset transfers 51:56 Requirements for the identification of suspicious transactions and sanctions screening in relation to virtual asset transfers 54:55 SFC Regulatory Powers 57:57 Transitional Arrangements for existing platform operators 1:00:16 Transitional Arrangements 1:01:41 Pre-existing VA trading platforms which intend to apply for a licence 1:03:03 Pre-existing VA trading platforms which do not intend to apply for a licence / VA trading platforms already existing in Hong Kong 1:03:49 SFC Publication of Trading Platform Lists 1:05:50 Dual Licensing 1:07:21 External assessment report 1:09:57 Selection and appointment of external assessors Charltons Law Firm: https://www.charltonslaw.com/ Julia Charlton https://www.charltonslaw.com/the-firm/people-culture/team-profile/julia-charlton/ Don’t forget to follow our YouTube-channel and social media accounts: Telegram: https://t.me/charltonslaw LinkedIn: https://linkedin.com/company/2995759/ Facebook: https://facebook.com/charltons Instagram: https://instagram.com/charltonslaw/

On 1 March 2023, Julia Charlton presented a webinar on the HKEX and SFC Disciplinary & Enforcement Actions between May and August 2022. This webinar provided a brief introduction and overview of the trends of the disciplinary and enforcement actions of the HKEX and the SFC from May to August 2022, and considered various enforcement cases of the HKEX and the SFC with an aim to give you an understanding and awareness on the enforcement areas and breaches which were focused by the Stock Exchange and the SFC during the said period. In May 2022, the Stock Exchange took disciplinary actions against several companies and their directors, including Wuzhou International Holdings Limited, CIL Holdings Limited, CR Construction Group Holdings Limited and Zhejiang State-owned Capital Operation Company Limited. These cases underscored the significance of adhering to the disclosure requirements of the Listing Rules, and maintaining robust internal control systems. In June 2022, we witnessed disciplinary actions against Mingfa Group (International) Company Limited and four former directors for failing to report various transactions to the board of directors and failing to comply the disclosure requirements under the Listing Rules. In addition, the SFC publicly reprimanded and fined China Everbright Securities (HK) Limited for failing to implement adequate and effective systems in anti-money laundering and counter-financing of terrorism, and CES Capital International (Hong Kong) Co., Limited for failing to discharge its duties as an investment manager of two funds. In July 2022, RBC Investment Services (Asia) Limited was reprimanded and fined for improper handling of client assets. Concurrently, Rifa Futures Limited was given a penalty for inadequate due diligence and failure to implement secure login methods for clients' internet trading accounts. KTF Capital Management Limited also received a fine for non-compliance with financial resources requirements, while Mr. Chan Ka Hey was banned from re-entering the industry for six months due to his deceptive practices on handling a customer's signature. Lastly, in August 2022, the SFC reprimanded and fined TC Capital International Limited and suspended its responsible officer for failing to discharge duties as the sponsor in connection with the HKEX IPO application for China Candy Holdings Limited. This case accentuated the need for sponsors to conduct reasonable due diligence and maintain proper records. The period between May and August 2022 saw HKEX and SFC take a firm stance on corporate governance, internal control systems, and compliance with the HKEX Listing Rules. These disciplinary actions and enforcement efforts serve as a reminder for companies and directors to ensure they adhere to the relevant regulations and maintain high standards of corporate conducts. #hkex #sfc #enforcementactions Timecodes: 00:00 Julia Charlton's welcome speech 00:44 Overview of enforcement trends - May to august 2022 01:43 HKEx’s Disciplinary Action Against Wuzhou International Holdings Limited and Nine Former Directors 08:46 Stock Exchange’s Disciplinary Action against Two Directors of CIL Holdings 14:02 Stock Exchange ’s Disciplinary Action Against CR Construction Group Holdings Limited, Six Directors and Zhejiang State-owned Capital Operation Company Limited 20:42 Stock Exchange’s Disciplinary Action against Four Former Directors of Mingfa Group (International) Company Limited 27:03 SFC Disciplinary Action To Reprimand and Fine China Everbright Securities (HK) Limited for HK$3.8 Million 30:32 SFC Disciplinary Action To Reprimand and Fine CES Capital International (Hong Kong) Co., Limited for HK$3.2 Million 36:06 SFC Reprimands and Fines RBC Investment Services (Asia) Limited HK$7.7 Million for Mishandling Client Assets 40:41 SFC Reprimands and Fines Rifa Futures Limited HK$9 Million 45:10 KTF Capital Management Reprimanded and Fined for Non-Compliance With Financial Resources Requirements 49:34 Chan Ka Hey Banned from Re-entering the Industry for 6 Months 51:44 SFC Reprimands and Fines TC Capital International Limited HK$$3 million and Suspends Its Responsible Officer for Sponsor Failures on an HKEX IPO application Charltons Law Firm: https://www.charltonslaw.com/ Julia Charlton https://www.charltonslaw.com/the-firm/people-culture/team-profile/julia-charlton/ Don’t forget to follow our YouTube-channel and social media accounts: Telegram: https://t.me/charltonslaw LinkedIn: https://linkedin.com/company/2995759/ Facebook: https://facebook.com/charltons Instagram: https://instagram.com/charltonslaw/

On 27 February 2023, Julia Charlton presented a webinar on the HKEX and SFC Disciplinary & Enforcement Actions between January and April 2022. This webinar provided a brief introduction and overview of the trends of the disciplinary and enforcement actions of the HKEX and the SFC in the first four months of 2022, and considered various enforcement cases of the HKEX and the SFC with an aim to give you an understanding and awareness on the enforcement areas and breaches which were focused by the Stock Exchange and the SFC during the said period. #HKEX #SFCDisciplinary #sfc Timecodes: 00:00 Julia Charlton's welcome speech 00:32 Overview of enforcement trends - January to April 2022 02:44 SFC reprimands and fines Zhonghui International Futures Company Limited HK$5 million 06:12 SFC’s action against Tianhe Chemicals Group Limited and its executive director 09:53 SFC reprimands and fines Citigroup Markets Asia Limited HK$348.25 million for serious regulatory breaches over client facilitation activities 12:56 Stock Exchange’s Disciplinary Action against Beijing Media Corporation Limited 15:57 SFC reprimands and fines South China Commodities Limited HK$4.8 million for regulatory breaches 17:32 Court orders insider dealers to pay HK$12.9 million to investors in TeleEye shares 20:10 Stock Exchange’s Disciplinary Action Against Six Former Directors of National Investments Fund Limited 26:38 SFC Obtained Court Order to Disqualify Former Directors of DBA Telecommunications (Asia) Holdings Limited 30:30 SFC Reprimands and Fines Emperor Securities Limited and Emperor Futures Limited for Breaches of Anti-money Laundering Regulatory Requirements 34:27 SFC Publicly Censures Wonderful Sky Financial Group Holdings Limited and Liu Tianni and Publicly Criticises Liu Kiki Ching Tung for Breaching the SFC Code on Share Buy-backs 37:24 SFC Bans Kim Bum Suk for 27 Months 42:16 Stock Exchange’s Disciplinary Action against Hsin Chong and seven former Directors 48:28 Takeovers Executive's Public Criticism of Directors for Breach of the SFC Takeovers Code’s No Frustrating Action Rule 4 56:25 SFC Bans Mr. Poon Choi Yung, a licensed representative of China Tonghai Securities Limited for 20 Months for Trading without Client Authorisation under section 194 of the SFO Charltons Law Firm: https://www.charltonslaw.com/ Julia Charlton https://www.charltonslaw.com/the-firm... Don’t forget to follow our YouTube-channel and social media accounts: Telegram: https://t.me/charltonslaw LinkedIn: https://linkedin.com/company/2995759/ Facebook: https://facebook.com/charltons Instagram: https://instagram.com/charltonslaw/