Response to the Consultation Paper on Proposed Enhancements to the Competency Framework for Intermediaries and Individual Practitioners
Release Date: 2021-01-29
Securities and Futures Commission
18 Westlands Road, Quarry Bay,
Hong Kong
Online Submission
https://www.sfc.hk/edistributionWeb/gateway/EN/consultation/
January 29, 2021
To: Securities and Futures Commission
18 Westlands Road, Quarry Bay,
Hong Kong
Online Submission
https://www.sfc.hk/edistributionWeb/gateway/EN/consultation/
January 29, 2021
To: Securities and Futures Commission
Response to the Consultation Paper on Proposed Enhancements to the Competency Framework for Intermediaries and Individual Practitioners
Question 1: Do you agree to raise the minimum academic qualification requirements to the attainment of Level 2 in either English or Chinese as well as in Mathematics in HKDSE or equivalent?
We agree, as we believe this will help raise the basic entry requirements for practitioners.
Question 2: Do you agree to broaden the scope of recognised academic qualifications to cover degrees in other disciplines?
We disagree with expanding the scope of recognized qualifications to include degrees in other disciplines, and the 2003 version should be maintained. The reason is that disciplines outside the "designated fields" do not possess industry sensitivity, and are actually no different from the general public.
Question 3: Do you have any comments on requiring licence applicants with degrees in other disciplines (without passes in at least two courses in the designated fields) and with HKDSE or equivalent academic qualifications to complete Extra CPT to ensure they have sufficient industry knowledge?
Referring to the response to Question 2, we disagree, as we do not believe requiring them to complete relevant additional continuing training can ensure they possess sufficient industry knowledge, and it may also lower the professionalism of the industry.
Question 4: Do you agree with the proposal to grandfather current and ex-licensees who previously qualified under Option 3?
Please provide reasons to support your views.
We agree. We believe this will help strengthen employment, and as former licensees have industry experience, the grandfathering arrangement is acceptable.
Question 5: Do you agree to introduce a full exemption from satisfying the RIQ requirements for temporary licence applicants?
Please provide reasons to support your view.
We agree to a limited extent. If the short-term license applicant does not have any conditions imposed on their local license, then a full exemption can be granted. However, if the short-term license applicant has a similar "temporary license" with conditions, then an exemption cannot be granted.
Question 6: Do you agree to refine the scope of the conditional exemption under paragraph (8) of Appendix E to the 2003 version of the Competence Guidelines as described in paragraph 37 above?
Please provide reasons to support your view.
We agree. We believe this will help practitioners develop in multiple areas.
Question 7: Do you agree that on a case-by-case basis we should take into account licence applicants’ overall career history within the industry?
Question 8: Do you agree that we should critically review experience of applicants claimed through accrediting to previous principals for only a short period of time?
Please provide reasons to support your views.
We agree with the SFC's points that the overall work experience of license applicants in the industry should be taken into account, and experience gained solely through short-term affiliations with previous principals should be scrutinized more closely. We suggest that through annual reporting, the maintenance, increase or decrease of experience should be confirmed, which will help licensed persons continue to perform their duties and avoid not meeting public expectations of licensed persons. If there are certain years where the requirements are not met, consideration should be given as to whether the person is a suitable licensee. This will help improve the management quality of the industry, enhance the stability of the market, and enhance Hong Kong's image as a financial center.
Question 9: Do you agree to confine management experience such that it only refers to hands-on experience in supervising and managing essential regulated functions or projects in a business setting, including the management of staff engaging in these functions or projects?
Please provide reasons to support your view.
We believe there is no need to be too detailed in defining the actual experience of regulated functions or projects. However, we agree with the examples given in paragraph 45 on the distinction between regulated business/purely administrative duties.
Question 10: In respect of the proposed enhancements to the eligibility criteria for ROs and EOs who intend to advise on Codes on Takeovers-related matters, do you agree:
(a) to increase the number of completed TC Transactions from one to two?
(b) that members of the Hong Kong Takeovers and Mergers Panel should serve on the Panel for at least two years in order for that experience to be considered as relevant experience? and
(c) that the experience acquired by the ROs, EOs and members of the Hong Kong Takeovers and Mergers Panel should be recent (i.e. within the last five years)?
We agree with the proposals in the above 3 points. For part (c), similar to our responses to Questions 7 and 8, for Responsible Officers and Principals responsible for the Takeovers Code (which should also include sponsor business), their relevant experience should be confirmed through annual reporting, and if there has been no maintenance of experience for 5 years, consideration should be given as to whether they are a suitable licensee.
Question 11: Do you agree with the additional examination requirement for LRs and ReIs who intend to undertake TC Transaction work?
Please provide reasons to support your views.
We agree.
Question 12: Do you agree with the proposal to change the determination of required number of CPT hours to a “per individual” basis? Please provide reasons to support your view.
We agree. This method is simpler to calculate the number of hours.
Question 13: Do you agree with the proposal concerning minimum requirements for individuals? Please provide reasons to support your view.
We agree.
Question 14: Do you agree that individual practitioners should attend at least five CPT hours on topics directly relevant to their RAs every year? Please provide reasons to support your view.
We agree. This will help practitioners acquire knowledge in various areas, including their regulated activities.
Question 15: Do you agree with the proposed requirements concerning CPT on ethics and compliance? Please provide reasons to support your view.
We agree, as this will help raise the quality of practitioners.
Question 16: Do you agree with the proposed timeframe for implementation? Please provide
reasons to support your view.
We agree. To align with convention and start counting continuing training hours from January 1, the changes should take effect on January 1, 2022.
If you have any inquiries about this letter, please feel free to contact Mr. Mofiz Chan, the Director of Industrial Relations Department, at any time.
Sincerely,
The Council of Hong Kong Securities and Futures Professionals Association