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TechWatch 182

December 2017



Members’ handbook updates

Handbook updates nos. 207 to 209

Update no. 207 relates to Accounting Bulletin 3 (Revised) Guidance on Disclosure of Directors’ Remuneration. Update no. 208 relates to the amendments to HKFRS 12 Disclosure of Interests in Other Entities.

Update no. 209 relates to the amend- ments to HKFRS 9 Financial Instruments

 

Professional accountants in business

Professional accountants as business partners and value enablers

Following its web meeting in September, the International Federation of Account- ants’ (IFAC) Professional Accountants in Business Committee published a report to share its collective knowledge, ideas, and experience regarding the role of professional accountants as business leaders and value enablers for organiza- tions. The main themes in the report are:

  • Enterprise Performance Management
  • The Role of Finance Leaders and  Business Partners in Technology
  • Effective Accountant Involvement in Risk Management
  • Creating and Communicating Value through Integrated Reporting and Thinking
  • Professional Accountancy Organizations' Support Tools
  • Audit Quality and Audit Committee Effectiveness
  • Professional Skepticism

Meeting highlights, outcome and recommended actions are also set out in the report. 

 

Small and medium practitioners

Transforming SMP challenges into opportunities

The 2016 IFAC Global SMP Survey identified key challenges many small- and medium-sized practices (SMPs) face. In order to help SMPs addressing these challenges, IFAC has recently published a document titled Transforming SMP Challenges into Opportunities covering articles from the Global Knowledge Gateway which provide information, ideas and tips, as well as best practice examples from IFAC SMP Committee members, together with the range of other tools and resources available.

 

Corporate finance

Institute comments on HKEX consultation on capital raisings by listed issuers

The Institute made a submission to Hong Kong Exchanges and Clearing (HKEX) on the consultation proposals to address potential abuses relating to large scale deeply discounted capital raising activities and specific issues concerning capital raising and share issuance transactions. 

Institute comments on HKEX consultation on delisting

The Institute issued a submission responding to HKEX’s proposals to improve the effectiveness of the delisting framework under the Main Board and the Growth Enterprise Market Listing Rules. The proposals aim to address the issue of prolonged suspension of trading in issuers’ listed securities, in the interest of maintaining market quality and reputation. The Institute’s submission, among other things, seeks specific arrangements for companies with long-suspended shares that are undergoing a restructuring. 

Joint reviews by HKMA and SFC on managing conflicts of interest in financial groups

On 24 November, the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) jointly issued a circular highlighting observations from their recent joint thematic reviews on the potential conflicts of interest arising from the sale of in-house products by registered institutions and licensed corporations within a single financial group. The reviews mainly focused on internal controls and compliance. 

The circular reminds intermediaries about the regulators’ expected standards in respect of conflicts of interest and provides examples of good practices in areas including client order execution and disclosure, product due diligence and discretionary portfolio management mandates. Specifically, senior management are expected to manage risks on a group basis, assess the robustness and effectiveness of systems and controls holistically, and ensure compliance with all applicable legal and regulatory requirements across the group. 

 

Taxation 

Announcements by the Inland Revenue Department

Members may wish to be aware of the following matters: 

  • Comprehensive Avoidance of Double Taxation Agreements with Latvia and Pakistan came into effect on 24 November 
  • Legislative Council questions on:
    - Measures to boost innovation and technology development
    - Measures to attract companies located outside Hong Kong to establish operations in Hong Kong 
    - Imposing restrictions on the purchase of residential properties to curb speculation

  • Stamp Duty statistics (November 2017)

 

Legislation and other initiatives 

Companies Registry launches new e-forms to facilitate filing of annual returns and changes in company particulars 

On 27 November, the Companies Registry launched five new e-forms at “CR eFiling” mobile app to enable registered users of the e-Registry to submit Annual Returns (Form NAR1) and changes of company particulars (Forms ND5, ND7, ND8 and NSC1) via “CR eFiling” using smartphones and mobile devices. Read Companies Registry External Circular No. 6/2017 for details. 

Anti-money laundering notices

Members should note the following notices and publications in relation to anti-money laundering/combating the financing of terrorism: 

  • Government notice 7845: An updated list of relevant persons has been specified under the United Nations Sanctions (Sudan) Regulation 2013.
  • Government notice 8956: An updated list of terrorists and terrorist associates has been specified under the United Nations (Anti-Terrorism Measures) Ordinance. 
  • High-risk and non-cooperative jurisdictions: In November, the Financial Action Task Force (FATF) issued two documents:

- FATF Public Statement, identifying jurisdictions with strategic AML/ CFT deficiencies that pose risk to the international financial system. 
- Improving Global AML/CFT Compliance: On-going Process, identifying jurisdictions which have strategic AML/CFT deficiencies for which they have developed an action plan with the FATF. 

  • Specially designated nationals and blocked persons list, published by the United States Treasury’s Office of Foreign Assets Control. More details on the Resource Centre of the Treasury. ​

Please refer to the full version of TechWatch 182, available as a PDF on the Institute’s website.