Financial Services Practice Group Compliance Services

The Compliance Challenge

Deacons Compliance Services

Financial Services Practice Group Compliance Services

Deacons Compliance Services team is part of Deacons' award winning Financial Services Practice Group, the market leader in Hong Kong in terms of size, depth of client base and range of funds we have established. Our focus is on clients in the business of investment / asset management and our client base includes traditional asset managers and investment advisors, alternative managers such as hedge funds and private equity groups, insurance companies, securities and futures traders, placing agents, MPF / retirement schemes, fund distributors, investment product intermediaries including retail banks, private banks and administrators, trustees and custodians.

The practice group has been recognised as a market leader by Asia Pacific Legal 500 since 2000. This publication described the practice group in the following terms: "Its long-term commitment to this (fund) industry has earned it an impressive client portfolio, attracted by its experience of licensing and regulatory compliance in particular." Asian Counsel readers selected Deacons as the Regulatory/Compliance 2009 Hong Kong Firm of the Year. This award recognises the work of our Compliance Services team. Deacons has also been consistently ranked by Chambers Asia as a leading law firm in the Financial Services area in Hong Kong since 2008. The practice group was described in the following terms in the 2010 edition: "It (Deacons' financial services practice group) handles matters such as licensing applications and regulatory and compliance services, including regulatory investigations, and general corporate and commercial issues on behalf of financial services firms…The firm's dedicated eight-strong compliance services team, led by Jane McBride, includes several ex-SFC staffers and is one of the practice's distinctive strengths."

The Compliance Challenge

As the rapidly changing regulatory landscape in each of the various financial services markets across Asia becomes more complex, ensuring compliance becomes a greater challenge.

Increased regulatory scrutiny, continuous regulatory developments, differences between global and Asian markets and the personal liability of senior management for compliance breaches add further levels of compliance risk for management and the other stakeholders of regulated entities.

Not knowing your responsibilities or not having appropriate risk management, supervision and internal controls in place, will never be a valid excuse for non-compliance should the regulators come knocking.

Penalties for compliance breaches are significant, business reputations inevitably suffer, significant amounts of management time need to be spent, litigation can be costly, licences may be revoked and criminal convictions can be imposed sometimes on those who are found to be responsible.

Deacons Compliance Services

Our Compliance Services team comprises 9 experienced regulatory and compliance professionals, offering both breadth and depth of knowledge and experience in the provision of regulatory and compliance advisory services to asset managers, investment advisors, banks, funds and other investment product distributors. The team comprises former regulators, in-house legal, compliance personnel and audit professionals.

Jane McBride, a lawyer qualified in Hong Kong; England and Wales; and Australia, is Head of Compliance Services at Deacons. Jane has lived and worked in Asia since 1991 and during this time she spent 8 years working for financial institutions in Hong Kong and in Tokyo, in senior regional roles with legal as well as compliance responsibilities. The rest of her career was spent in private practice. She is also fluent in Japanese.

We work closely with our clients' management teams or their in-house legal and compliance representatives on their day-to-day compliance needs and also provide practical regulatory and compliance advice and solutions.

Woking together with other Deacons practice groups, we also provide a seamless service on intellectual property, employment and immigration, litigation, corporate secretarial and real estate issues.

Examples of the compliance and regulatory services we can provide include:

Compliance Due Diligence / Internal Control Reviews

• regulatory compliance due diligence reviews
• "health checks" on specific business functions and processes (e.g. trading, client take on, investment decision making, sales practices, code of ethics)
• assistance on regulatory inspections, inquiries and investigations
• work with internal audit teams on reviewing management, operations and internal controls
• acquisition / JV target compliance regulatory due diligence reviews

SFC Licensing

• preliminary assessments on the company and individuals and provide legal advice on type of licence required
• new corporate and individual SFC licence applications
• subsequent applications (e.g. additional regulated activity, new substantial shareholder approvals, modification of licensing conditions, FRR return authorised signatories)
• assistance in responding to SFC inquiries
• notifications to and on-going regulatory filings with the SFC

Compliance Operations and Regulatory Advice / On-going Support

• Financial Resources Rules interpretation and practical guidance
• preparation / review / update of compliance manuals, policies and procedures including adapting existing group documentation to the Hong Kong compliance environment
• regulatory and compliance aspects of staff dealing, trading errors, investment guidelines, client take on, professional investors, etc
• advising on regulatory breaches and assistance in handling breach notifications to the SFC
• review of corporate website and disclaimer and other marketing materials
• corporate governance and internal controls
• advice on disclosure of interests in listed securities, and preparation of disclosure notices
• preparation of KYC, AML, record keeping and staff dealing procedures
• assistance in setting up / reviewing compliance plans and compliance monitoring systems

Gap Analysis and Follow-up

• review of compliance / operations manuals, policies and procedures against actual practices and to ensure compliance with regulatory requirements and industry best practices where required
• regulatory and compliance risk identification, assessment and development of mitigating internal controls
• assistance with implementation of internal audit / regulatory review recommendations

CPT Training

• the SFO requirements
• trading compliance
• staff dealing
• regulatory updates
• compliance policies and procedures
• disclosure of interests

Retainer Compliance Services

We can also offer compliance services on a monthly or other retainer basis. Please approach us to discuss your specific needs.