Hong Kong's Securities and Futures Commission has published new forms on which firms should disclose interests (DI notices) for use when mandatory electronic filing takes effect on 3 July. It has also embarked on two consultative exercises on the subject of IT.

Firms may submit DI notices relating to events that occur before 3 July using the old forms and methods. For events that necessitate disclosure on or after that date, firms should use the new prescribed forms and submit them through a new Disclosure of Interests Online System (DION System) to be introduced by Hong Kong Exchanges and Clearing Ltd (HKEX). For a three-month period of grace, filers may use the old forms and submit them by fax, hand, post or email to SEHK and to the listed corporation concerned. The SFC says that it is unlikely to prosecute a breach of Part XV Securities and Futures Ordinance arising solely from an incorrect use of a prescribed form or submission method.

Meanwhile, the regulator has drawn up proposals for guidelines to govern online distribution and advisory platforms, with comments welcom for the next three months. Paragraph 5.2 of the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission dictates that licensed or registered persons should, when making a recommendation or solicitation, ensure that the suitability of the recommendation or solicitation for the client is reasonable in all the circumstances, having regard to information about the client of which the licensed or registered person is or should be aware.

The proposed guidelines tackle the question of how this "suitability requirement" should operate in an online environment. The requirement will certainly apply when a firm provides robo-advice. The regulator also wants to extend it to the sale of complex products on online platforms because retail investors may have difficulty in fully understanding the risks when they see them there.

The SFC is also consulting interested parties about proposals to reduce the risk of hacking in internet trading, this time with a two-month comment window. It has drafted new guidelines for internet brokers to make them stronger in areas that hackers might exploit and to expound clear cybersecurity standards. Some of these requirements already feature in the Code of Conduct for Persons Licensed by or Registered with the SFC or in varoius SFC circulars and are merely being elaborated here.