HK watchdog steps up monitoring of fund managers amid volatility

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HONG KONG, March 27 (Reuters) – Hong Kong’s markets watchdog warned fund managers on Friday to be careful when selling illiquid investment products to clients during market volatility caused by the new coronavirus in Hong Kong and globally.

A gauge of volatility on Hong Kong’s benchmark Hang Seng Index shot up to 64.8 this month, its highest level since 2008.

The Securities and Futures Commission (SFC) also said it had stepped up its monitoring of fund managers, emphasising that they should treat their clients fairly.

The SFC said in a circular that managers must ensure that when selling investment products they have checked that the liquidity and credit quality of the funds are suitable for the client.

In a separate circular, it told them to be careful when managing their funds’ liquidity and to keep investors informed about steps they had taken to do so.

“Under current market conditions, industry participants should exercise due care when recommending products which may be highly volatile or less liquid,” Ashley Alder, chief executive of the SFC, said in a statement.

Reporting by Alun John and Noah Sin
Editing by Robert Birsel

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