HONG KONG – Hong Kong's secretary for financial services and the treasury, Christopher Hui Ching-yu, welcomed the Legislative Council's passage of the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022 on Wednesday.
The bill reinforces Hong Kong’s status as an international financial center by enhancing the city’s regulatory regime for combating money laundering and terrorist financing, and by formulating a comprehensive and balanced regulatory framework for virtual asset (virtual asset) activities to protect investors.
The amended ordinance, including the registration regime for dealers in precious metals and stones, will take effect on April 1, 2023, while the licensing regime for VA service providers as well as other amendments on AML/CTF requirements, will take effect on June 1, 2023.
The amended Anti-Money Laundering and Counter-Terrorist Financing Ordinance requires those engaged in VA exchange business to apply for a license from the Securities and Futures Commission (SFC), according to a government statement.
The amended Ordinance establishes an effective AML/CTF regulatory regime and fulfils the relevant international obligations.
Christopher Hui, Secretary for Financial Services and the Treasury, HKSAR
Apart from satisfying the fit and proper test, conducting customer due diligence and record-keeping, the relevant people must also meet other regulatory requirements on investor protection, such as safe custody of client assets, financial soundness, and avoiding conflicts of interest.
In addition, licensed virtual asset exchanges and their wholly owned subsidiaries need to regularly submit audited accounts and financial information to the SFC.
The ordinance has also empowered the commission to enter business premises for conducting inspections and investigations when necessary. It will carry out further consultation on the detailed regulatory requirements of the regime.
Separately, any person who is seeking to carry on a business of dealing in precious metals and stones in Hong Kong and engage in transactions at or above HK$120,000, cash or non-cash, is required to register with the Commissioner of Customs and Excise, as per the statement.
No registration is required for dealers who only conduct transactions under HK$120,000, it added.
The amended ordinance establishes an effective regulatory regime of anti-money laundering and counter-terrorist financing, and fulfills the relevant international obligations, said Hui.
“This in turn strengthens Hong Kong’s status as an international financial center. For VA exchanges, a comprehensive and balanced regulatory framework can protect investors and promote responsible and sustainable industry development.”
On June 23, the SAR government gazetted the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022.
The legislative proposal is pertinent to the fulfillment of the government’s FATF (Financial Action Task Force) obligations. Since 1991, Hong Kong has been a member of the FATF, an inter-governmental body entitled with setting international standards on combating money laundering and terrorist financing.
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