Information on investment employees of associated and non-associated companies to whom investment business is outsourced or delegated.
(1) the number of investment employees retained by the Associate in the discharge of investment business functions for the Applicant (without the need to identify and provide details of each investment employee);
(2) that all such investment employees are competent to carry out the investment business duties assigned to them in relation to the Applicant, such competence to be assessed by reference to the regulatory standards and requirements of the jurisdiction from where the Associate provides investment business services to or on behalf of the Applicant; and
(3) that the Associate is subject to regulation in the jurisdiction from where it provides investment business services to or on behalf of the Applicant and providing details of the name and address of the relevant regulatory authority.
Where Applicants outsource or delegate the discharge of their investment business duties out of the State to a non-Hong Kong company which is not a member of the same group (as defined in the Law) as the Applicant ("Third Party Service Provider"), and which is regulated to a standard and in a jurisdiction acceptable to HKFTA, the Applicant need for the purposes of their application for registration under the Law provide either details of the investment employees of the Third Party Service Provider, or may provide that a certificate in writing is provided to HKFTA by a senior compliance officer or senior director of or with responsibility for the Third Party Service Provider confirming therein the matters set out in clause 3, paragraphs (1) to (3) above substituting references to the "Associate" with reference to the "Third Party Service Provider".
Where certificate is submitted to HKFTA in accordance with the provisions of either clause 3 or clause 4 above, details of the investment employees who are not directly employed by the Applicant need not be included in Section C of the Application Form for registration under the Law completed for the
Fee cap on investment employees
Where an Applicant or registered person retains or utilises the services of more than 30 investment employees either directly or through outsourcing or delegation arrangements at the relevant date, the registration or annual fee payable by the Applicant or registered person under the Investment Business Fees Notice (the “Fees Notice”) published in accordance with Article 15 of the Financial Services Authorities (Hong Kong) Law 1998 as amended and Articles 8(3) and 9(6) of the Financial Services (Hong Kong) Law 1998 as amended, will be calculated as if such Applicant or registered person had 30 investment employees and no more. In the preceding and following paragraph "relevant date" has the meaning ascribed to this term in the Fees Notice. For the purposes of calculating one fee in relation to Investment Employees HKFTA is prepared to exercise some discretion where the multi entity nature of a family of companies creates an artificially high fee.
Group fee arrangements
Where two or more Applicants or registered persons within the same group (as defined in the Law) outsource or delegate the discharge of investment business duties to the same Associate, then the purposes of the Fees Notice "double counting" of the relevant investment employees of the Associate will be avoided and the registration or annual fees payable by such Applicants or registered persons will be calculated by reference to the relevant number of investment employees of the Associates at the relevant date and such fees may be apportioned between the Applicants or registered persons.
Amendment to investment employee definition
At present, the definition of investment employees in the Interpretation to the Fees Notice does not take account of the fact that only some of the investment employees of the Associate may be engaged in servicing the requirements of the Applicant but requires the application and annual registration fees to be calculated by reference to the total number of such investment employees. For example, the Associate may have twenty investment employees only five of whom are designated to service the Applicant's investment business needs. Therefore, for the purposes of clarification, HKFTA would suggest that applicants make a sensible approximation of the full time equivalent investment persons and enter that number on their application forms, which, combined with the capped fee and competence confirmation certificate, should ease matters considerably.