Hong Kong SFC releases new FAQs on external electronic data storage

Abstract

Purpose To explain the Securities anld Futures Commission of Hong Kong’s new FAQs on external electronic data storage. Design/methodology/approach The article analyses the existing legal and regulatory requirements relating to the keeping of records as well as the circular and FAQs on the use of external electronic data storage. It also discusses the practical implications of the newly added FAQs. Findings The SFC has relaxed the requirement as regards the appointment of two Managers-In-Charge in Hong Kong for the purposes of the circular on the use of external electronic data storage. The SFC has offered more flexibility with respect to the undertaking by electronic data storage providers in the FAQs. The FAQs have also provided more certainty with respect to the approval requirements pursuant to section 130 of the SFO where non-Hong Kong affiliates are concerned. Practical implications The additional guidance from the SFC regarding external electronic data storage in the form of the new FAQs shows a helpful clarification in the SFC’s approach on the practical implementation of the relevant requirements under the circular on the use of external electronic data storage. Originality/value The article offers practical guidance in respect of the implications of the newly added FAQs on the external electronic data storage regime from experienced financial services and asset management lawyers.