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  • C4-3.1 C4-3.1 Overarching Principles

    • C4-3.1.1

      Category 4 investment firms must:

      (a) Act with due skill, care and diligence in all dealings with clients;
      (b) Provide services without any discrimination based on gender, nationality, origin, language, faith, religion, physical ability or social standing;
      (c) Act fairly and reasonably in all dealings with clients;
      (d) Identify clients’ specific requirements in relation to the products and services about which they are enquiring and take adequate measures to avoid mis-selling and mis-representation;
      (e) Ensure that any advice to clients is aimed at the clients’ interests and based on adequate standards of research and analysis;
      (f) Provide sufficient information to enable clients to make informed decisions when purchasing investment products and services offered to them;
      (g) Provide sufficient and timely documentation to clients to confirm that their investment arrangements are in place and provide all necessary information about their products, rights and responsibilities;
      (h) Maintain fair treatment of clients through the lifetime of the client relationships, and ensure that clients are kept informed of important events;
      (i) Ensure complaints from clients are dealt with fairly and promptly;
      (j) Ensure that all information provided to clients is clear, fair and not misleading, and appropriate to clients’ information needs; and
      (k) Take appropriate measures to safeguard any money and property handled on behalf of clients and maintain confidentiality of client information.
      Added: January 2022

    • Client Classification

      • C4-3.1.2

        Category 4 investment firms must only provide services to accredited investors who are defined as:

        (a) Individuals who have a minimum net worth (or joint net worth with their spouse) of USD 1,000,000, excluding that person’s principal place of residence;
        (b) Companies, partnerships, trusts or other commercial undertakings, which have financial assets available for investment of not less than USD 1,000,000; or
        (c) Governments, supranational organisations, central banks or other national monetary authorities, and state organisations whose main activity is to invest in financial instruments (such as state pension funds).
        Added: January 2022

      • C4-3.1.3

        Before providing any regulated investment services to any client, a category 4 investment firm must take reasonable steps to obtain appropriate information to establish whether that client is an accredited investor. Such classification must be communicated to the client along with an explanation of the implications of such classification. Licensees must also keep records of the classification established for each client, including sufficient information to support such classification.

        Added: January 2022

    • Conflicts of Interest

      • C4-3.1.4

        Category 4 investment firms must take all reasonable steps to identify conflicts of interest between themselves (or any person directly or indirectly linked to them by control) and their clients, which may arise in the course of providing a regulated investment service. Any such conflict of interest must be disclosed to the client and take reasonable steps to obtain the client’s no objection.

        Added: January 2022

      • C4-3.1.5

        Category 4 investment firms must establish policies and procedures to manage conflicts to interest, including where appropriate information barriers, Chinese walls etc. If the licensee is unable to manage a conflict of interest it must decline to act for the client. The policies must also cover an employee’s personal account transactions.

        Added: January 2022

      • C4-3.1.6

        Category 4 investment firms must establish controls, policies and procedures to ensure that neither they, nor any of their employees, offer, give, solicit or accept any inducement which is likely to conflict significantly with any duty that they owe to their clients.

        Added: January 2022

    • Professional Indemnity Insurance

      • C4-3.1.7

        Category 4 investment firms must satisfy the CBB that its professional indemnity coverage is adequate for the nature, size and risk profile of its business.

        Added: January 2022