Advisers urged to be 'vigilant' over Hong Kong regulatory changes

| 16 Nov 2023

Financial advisers should closely monitor updates to laws like the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (AMLO) and ensure their clients' portfolios adhere to these regulations, said Mr Nigel Green, Chief Executive of the deVere Group, an advisory company which operates across the globe.

Also, due to its unique geopolitical positioning, he said that assessing domestic and international geopolitical risks was "vital to ensure viability of clients’ financial planning strategies". 

According to Mr Green, advisers should work closely with their clients to evaluate the impact of events such as trade disputes, political tensions, and economic fluctuations on their portfolios. Diversifying assets across multiple jurisdictions can, of course, mitigate risk. 

Advisers operating in, or working with international advisers based in Hong Kong should also make sure they keep abreast of regulatory developments.

For example, the National Security Law (NSL), which was implemented in Hong Kong in 2020, contained clauses that strengthened the management of foreign non-governmental organisations and news agencies. 

Because the NSL grants authorities in Hong Kong broader powers to regulate and oversee activities related to national security, this does involve the movement of money. 

Therefore, financial advisers with cross-jurisdictional clients based in Hong Kong may find they are under greater pressure to ensure the privacy and security of their clients’ financial information and communications. 

They must also be cautious when handling sensitive client data, as it could be subject to surveillance or investigation, according to Mr Green. 

Moreover, there are compliance issues that differ across regions, so financial advisers with clients who have assets or investments in Hong Kong may need to navigate international compliance issues.

They must ensure their clients’ financial activities are in compliance with both Hong Kong’s NSL and the laws and regulations of their home countries, which may have restrictions on dealings with Hong Kong, reported FT Adviser.