Content

1. Introduction .................................................................................... 2

2. Our risk and regulatory services to Asset and Wealth Managers in Hong Kong ...................................................................................... 4

3. Why PwC? ....................................................................................... 9

4. Our team ........................................................................................ 12

1. Introduction

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Introduction

Asset and wealth managers in Hong Kong are facing high expectations from different stakeholders including investors, regulators, clients and prospective clients, and regulators. They are demanding greater transparency and more assurance and expect asset and wealth managers to have strong compliance and internal controls. Heightened regulatory expectations place additional pressure on senior management and regulated persons in asset and wealth management companies. The consequences of non-compliance are front-page news, and a compliance failure can be disastrous to a firm’s business. Thus, senior management needs confidence that your business model, operational policies and procedures have no unintended or undiscovered compliance problems.

Are you ready to face a challenging regulatory environment?

In order to cope with stricter, more dynamic regulatory environment, asset and wealth managers have to take a proactive approach to establishing proper controls over all business functions and to manage regulatory risks. A professional business advisor that understands the dynamics of today’s regulatory landscape and has the tools and resources necessary can assist you to address regulatory compliance issues and manage regulatory risks effectively.

PwC is the leading professional service firm offering a wide range of capabilities as providers of strategy through execution in relation to regulatory compliance, operational, risk and control services. Our Financial Services Risk and Regulation is a dedicated team of professionals focusing on the risk and regulatory space in financial services. We possess practical experience as well as technical expertise to provide responsive, timely and value-added advice to you. Our mission is to assist you in keeping up with this ever-changing regulatory environment.

With our broad experience in advising and assisting asset and wealth management firms to meet compliance obligations and regulatory changes, we understand the needs of your business. Our regular participation, leadership roles and other involvement in committees formed by the regulators, asset and wealth management and professional associations bring you the most up to date industry insight and perspectives.

In this publication, we have summarised what PwC can provide to support you and enhance your compliance with the relevant rules and regulations in Hong Kong.

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2. Our risk and regulatory services to Asset and Wealth Managers in Hong Kong

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Our risk and regulatory services to Asset and Wealth Managers in Hong Kong

As a team of dedicated regulatory specialists in PwC, we help you analyse, understand and adapt your business to the latest regulatory changes. PwC is uniquely positioned to assist you in dealing with an increasingly stringent regulatory environment.

PwC can assist asset and wealth managers in Hong Kong - from start-ups to well-established businesses - on an ongoing basis. PwC customizes the scope of services and work to develop solutions regardless of where you are in your business cycle.

New start-ups

Internal Control Review 02

Conduct corporate governance, risk culture and internal control framework review

Provide recommendations to enhance existing controls, operational policies and procedures

Perform mock regulatory compliance exams

Provide advice to management to prepare for regulatory inspections

Licensing Application 01

Assist management in applying for the relevant regulatory licences

Review business model and assist management to prepare the required licensing application documents (e.g. business plan, compliance manual, application forms etc.)

Advise the appropriate and applicable regulatory requirements

Ongoing Compliance 03

Provide insight on regulatory changes

Perform periodic regulatory health checks to assess compliance with regulatory obligations

Review regulatory filings, e.g. Financial Resources Returns, relevant forms etc.

Established licensed asset and wealth managers

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Our risk and regulatory services to Asset and Wealth Managers in Hong Kong (Continued)

1. Licensing Application An entity has to obtain the relevant licences from the Securities and Futures Commission of Hong Kong (SFC) before they can carry out any regulated activity in Hong Kong. PwC can provide you advice and support to apply for the relevant licences from the SFC through:

Feasibility Studies

Understand the business activities to be carried out by an asset and wealth manager and assess the relevant types of licences to be applied for from the SFC

Advise on the licensing requirements and ongoing obligations for the asset and wealth management company and the individual applicant (i.e. Responsible Officer and Licensed Representative)

Advice on Licence Applications

Assess compliance with fit and proper criteria and competency requirements set by the SFC for the asset and wealth management company, the individual applicant (i.e. Responsible Officer, Licensed Representative) and the substantive shareholder of the licensed corporation

Review and comment on the licensing application documents (e.g. business plan, compliance manual, projection of financial resources and liquid capital and, application forms etc.)

Provide advice to management to prepare the licensing application documents

Advise the implications of new measures and rules introduced by the SFC to the application

Support management in responding to the SFC enquiries during the licence application process

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Our risk and regulatory services to Asset and Wealth Managers in Hong Kong (Continued)

2. Internal Control Review Investors and regulators expect greater transparency and more assurance over the areas of financial information, controls and performance reporting. PwC can provide support to you to enhance existing operational and internal control policies and procedures:

Internal Control Review

Conduct corporate governance, risk culture and internal control gap analysis reviews to identify any weaknesses and/or root cause issues and provide recommendations to management to rectify the identified gaps

Understand and evaluate the effectiveness of the control environment and internal controls on the key areas, for example:

- AML/KYC procedures;

- Selling practices and disclosures to investors;

- Trade processing and allocation; and

- Risk identification and monitoring etc.

Conduct mock compliance examinations such as interviews with senior management, documentation reviews, sample tests, etc.

Issue independent internal control assurance reports (under ISAE 3402, ISAE 3000, SSAE 16 etc.) for the stakeholders of the asset and wealth managers or for regulatory filing purposes

When PwC performs internal control reviews, PwC adopts the model below:

Phase I: Corporate Governance, Risk Culture and Internal Control Gap Analysis

Phase II: Provide Advice and Recommendations to Management

Perform an in-depth gap assessment to assess the operational readiness of your business in meeting the regulatory requirements

Provide advice to management to enhance the existing controls and procedures of the areas of focus and close the gaps identified

Identify areas of focus and provide you with practical recommendations to close the gaps

Support you to design your organisation’s procedures, and assist the remediation by reviewing the policies and documentations

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Our risk and regulatory services to Asset and Wealth Managers in Hong Kong (Continued)

3. Ongoing Compliance Some asset and wealth managers in Hong Kong outsource part of the compliance function to third party service providers due to limitations with internal resources. PwC provides on-going regulatory compliance support services so that you can satisfy relevant filing requirements and comply with various rules, guidelines and ordinances stipulated by the SFC.

Ongoing Regulatory Compliance Support

Arrange compliance visits on a monthly/quarterly basis to ensure ongoing obligations on specific regulatory areas are met

Perform health-checks taking into account the latest regulatory developments and hot topics in the market

Review the Financial Resources Returns

Review regulatory filings and/or responses to the regulator

Response the ad-hoc regulatory compliance queries raised by the management

Compliance Policies and Procedures Enhancement

Review and enhance the compliance policies and documentations (e.g. compliance manual, operational procedures manual etc.) based on the latest rules and regulations

Regulatory Updates and Training

Share insights on the latest regulatory developments and potential impacts on your business and operations

Develop customised compliance training programmes on hot regulatory topics (e.g. anti-money laundering, suitability obligations etc.)

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3. Why PwC?

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Why PwC?

We know your needs and we have the expertise to meet them.

We have an experienced knowledgeable team

Our team is constructed of individuals experienced across the relevant regulatory advisory areas so that we can call on Subject Matter Experts as and when required.

We possess SFC regulatory expertise

We possess ample understanding of regulatory inspections and have extensive experience in advising asset and wealth managers on relevant SFC rules, guidelines and regulations.

We have a systematic approach

We have a systematic and proved approach to conducting regulatory advisory services based on our client experiences and our discussions with the regulators.

We know Asset and Wealth Managers

We have a dedicated Asset and Wealth Management Team of over 21,000 professionals in Hong Kong, China, Singapore and Taiwan firms, which operate on combined basis, with a view to bringing relevant values to our clients. We work with approximately 70 of the Top 100 global asset and wealth managers.

We are committed

We are committed to being thought leaders in the asset and wealth management industry, as well as keeping up to date on critical global industry issues. We share our knowledge with our clients through well-received regulatory seminars.

We have a global network

We are a member of the PwC global network with a global reach of 223,000 people. We are able to draw on people and knowledge from 157 countries to develop fresh perspectives and practical advice.

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Why PwC? (Continued)

PwC provides professional services to every major segment of the asset and wealth management industry. Our major focus in Hong Kong includes:

Traditional Investments Alternative Investments Service Providers

Open-end and close-end funds

Institutional and retail funds

Exchange-traded funds

Pension funds

Family offices

Hedge funds

Private equity funds

Venture capital funds

Fund of funds

Real estate investment funds

Infrastructure funds

Sovereign wealth funds

Insurance company and bank-advised funds

Investment advisors

Investment managers

Trustees

Fund administrators

Prime brokers

Custodians

Transfer agents

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4. Our team

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Our team

Our team is pleased to provide you with regulatory advice and support to aid you in understanding and complying with regulatory changes.

Should you have any questions regarding regulatory updates in relation to the asset and wealth management industry, please feel free to contact the following key persons:

Emily Lam Partner Financial Services Risk and Regulation +852 2289 1247 emily.lam@hk.pwc.com

Carlyon Knight-Evans Partner Financial Services Risk and Regulation +852 2289 2711 carlyon.knight-evans@hk.pwc.com

Helen Li Partner Financial Services Risk and Regulation +852 2289 2741 helen.l.li@hk.pwc.com

Hilda Tang Senior Manager Financial Services Risk and Regulation +852 2289 6900 hilda.ht.tang@hk.pwc.com

This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

© 2017 PricewaterhouseCoopers Limited. All rights reserved. PwC refers to the Hong Kong member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. HK-20171030-7-C1