Corporations licensed to operate in Hong Kong may have to carry out some extensive admin work to ensure they are complying with tough governance regulations set down by the Securities and Futures Commission (SFC).
The possibility of a collective organisational scramble emerged with the 16 December release of new rules for how licensed corporates should disclose the structures of their top management teams.
It is likely that those rules will touch on the activities of some senior corporate treasurers working in the territory.
The SFC has issued its disclosure requirements ahead of the April 2017 commencement of its process to harvest more detailed information on high-level responsibilities at every firm under its watch.
Among their stipulations, the rules state that firms must assign a Manager-in-Charge (MIC) to each of eight, core business functions:
Half of those functions could fall into the remit of corporate treasurers.
The regulator has issued the rules to ensure that the governance structures of licensed corporations are more closely aligned with its responsible officer and regulated persons regime.
Risk management awareness is an area on which the SFC aims to be particularly stringent. For example, the rules say that each member of senior management should be qualified to:
However, it is the requirements for the format in which disclosures should be made that may create a flurry of extra work for senior management teams.
As the rules say, a Hong Kong-licensed corporation “should submit an organisational chart depicting its management and governance structure, business and operational units, and key human resources and their respective reporting lines”.
The text notes: “The chart should capture all MICs engaged by the corporation, their respective reporting lines… and the job titles of the persons reporting directly to [its] MICs in relation to the operations of the corporation.
“A licensed corporation should notify the SFC of any changes in its appointment of MICs (including any new appointment and cessation of appointment) or any changes in the particulars of its MICs… within seven business days of the changes.”
It adds: “Where a change involves a new appointment or cessation of appointment… the licensed corporation should also submit an updated organisational chart in its notification of that change.”
Upon the 18 April implementation of the SFC’s information-gathering process, corporations will be expected to submit the required charts and MIC details via the regulator’s Online Portal within a period of three months – ie on, or before, 17 July.
Ahead of implementation, the SFC will hold workshops introducing corporates to the new features of the Online Portal that will enable them to submit their information.