Members’ handbook updates
Handbook updates no. 202 to 203 Update no. 202 relates to the issuance of Hong Kong (IFRIC) Interpretation 22 Foreign Currency Transactions and Advance Consideration.
Update no. 203 relates mainly to the issuance of Revised Hong Kong Standards on Auditing and Practice Notes.
Invitation to comment
The Institute is seeking comments on the International Accounting Standards Board Exposure Draft ED/2017/4 Property, Plant and Equipment – Proceeds before Intended Use (Proposed amendments to IAS 16).
Comments should be submitted by 15 September.
Virtual conference on IFRS 16 Leases
A virtual conference on IFRS 16 Leases by the IASB and the Institute of Chartered Accountants in England and Wales is scheduled to take place on 10 October.
The conference covers insights from some of the world’s leading experts on IFRS 16 and provides you the opportunity to participate in interactive Q&A sessions.
New and amended standards and interpretations
The Institute published an updated list of new and amended standards and interpretations that are:
- Applicable to accounting periods beginning on or after 1 January 2017; and
- Not yet effective, but may be adopted early.
Professional accountants in business
IFAC’s call for action by G20 countries to support global economy
In advance of the G20 Summit 2017 in Hamburg, Germany on 7-8 July, the International Federation of Accountants issued recommendations for G20 countries and other key stakeholders in the global economy to collaborate on:
- Raising governance standards across all economic sectors to increase transparency and accountability, and help restore trust and inspire confidence in business and government. Good governance is the key to accomplishing the G20’s objectives to build resilience, improve sustainability, and assume responsibility.
- Fostering greater transparency and regulatory consistency to achieve growth, confidence, and stability. This requires an inclusive digital and economic environment for businesses of all sizes, as well as implementation and adoption of high-quality internationally-accepted regulations and standards.
SFC consults on legal and regulatory requirements applicable to open-ended fund company
The Securities and Futures Commission has recently launched a two-month consultation on the detailed legal and regulatory requirements applicable to the new open-ended fund company structure, which will enable investment funds to be established in corporate form in Hong Kong, in addition to the current unit trust form.
The consultation sets out the SFC’s proposed Securities and Futures (Open-ended Fund Companies) Rules and Code on Open-ended Fund Companies, which include requirements relating to the OFC’s formation, its key operators, ongoing maintenance, termination and winding-up, and will be applicable to all OFCs.
Implementation of the new OFC regime is envisaged in 2018.
Consultation conclusions on OTC derivatives regulatory regime
On 27 June, the Hong Kong Monetary Authority and the SFC published conclusions to implement the proposed adjustments to the scope of “OTC derivative product” under the over-the-counter derivatives regulatory regime, i.e. to:
- Prescribe certain additional markets and clearing houses so that products traded and cleared through them will not be regarded as “OTC derivative products”; and
- Exclude Delta One Warrants from the definition of “OTC derivative product.”
The conclusions paper also provides further clarification as to how Delta One Warrants will be defined.
SFC clarifies competence requirements for licensees seeking to enter asset management business
On 23 June, the SFC issued a circular to clarify competence requirements for existing licensed persons seeking to be licensed for Type 9 regulated activity (asset management) and to provide further guidance on how the SFC assesses the competence of a corporation or a responsible officer to carry on asset management activities.
The circular also highlights the eligibility criteria of, and restrictions on permitted activities for, licensed persons seeking conditional exemptions from passing the required examination papers in order to meet the SFC’s requirements.
SFC intervenes directly and at early stage in serious corporate cases
The SFC is taking steps to intervene in serious cases at an early stage to carry out its statutory objectives, including to protect the investing public and to suppress illegal, dishonourable and improper market practices.
It has recently published an inaugural issue of the SFC Regulatory Bulletin: Listed Corporations to provide guidance on the manner in which it performs some of its functions under the Securities and Futures (Stock Market Listing) Rules and the Securities and Futures Ordinance in relation to listed corporations and other listing matters. The bulletin uses case studies to aid the market’s understanding of the SFC’s approach to performing its functions.
Announcements by the Inland Revenue Department
Members may wish to be aware of the following matters:
- Legislative Council questions on assessments or additional assessments made under section 60 of the Inland Revenue Ordinance, implementation of tax concessions, and feed-in tariff scheme for renewable energy power generation installations
- Inland Revenue (Amendment) (No.4) Ordinance 2017 on extending profits tax exemption to privately offered open-ended fund companies has been gazetted
- Orders on avoidance of double taxation agreements with Latvia, Belarus and Pakistan have been gazetted
- AEOI Portal which has been launched for financial institutions to furnish notifications and file returns on the reporting of financial account information for automatic exchange of financial account information purposes
- AEOI agreement signed with New Zealand
- Tax obligations of taxpayers and employers
- Stamping Circular No. 02/2017 on Filing of Return of Stock Borrowing Transactions
Legislation and other initiatives
Gazettal of AML/CFT Bill and Companies Bill 2017
The Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) (Amendment) Bill 2017, which extends AML/ CFT regulation to certain “designated non-financial businesses and professions”, including accountants, and the Companies (Amendment) Bill 2017 , which requires private companies incorporated in Hong Kong to keep registers of persons with significant control over the company, were gazetted and introduced into LegCo on 23 June.
Please refer to the full version of TechWatch 177, available as a PDF on the Institute’s website: www.hkicpa.org.hk ◆