Among the questions posed to help intermediaries adhere to the new rules is one on the use of gifts to promote products.
In response to the question over whether such incentives can be used, the SFC states such gifts should not be tied to particular products or funds because they might distract consumers from fully considering their risks.
A further questions regards the levels of explanation required to clients about certain listed derivative products – what are termed callable bull/bear contracts. Another considers how to define what is classed as “acting in the best interests of clients”, while a fifth sets out how to determine whether someone is classed as “having knowledge of derivatives”.
An e-version of the Q&A is available on the SFC website at http://www.sfc.hk under the section “Intermediaries, Licensing & Investment Products – Intermediaries Supervision Related Matters – FAQs – Revised Code of Conduct”.
