Circular to Licensed Corporations which are Engaged in Asset Management and/or Giving Advice on Funds/Portfolios

Transcription

1 SECURITIES AND FUTURES COMMISSION 8th Floor, Chater House, 8 Connaught Road Central, Hong Kong Our Reference: 233/IP/ February 2004 Circular to Licensed Corporations which are Engaged in Asset Management and/or Giving Advice on Funds/Portfolios Fund Management Activities Survey 2003 As an annual exercise to collect information on fund management activities in Hong Kong for regulatory and market facilitation purposes and to better understand the competitive edge of the sector, we have now commenced the Fund Management Activities Survey 2003 (the FMAS ). We would appreciate your continued co-operation, as in previous years, by completing and returning the attached Questionnaire on or before 26 March The Commission has in the past conducted the annual FMAS in conjunction with the Intermediaries Activities Survey (the IAS ). Commencing this year, the FMAS will be conducted on a standalone basis. For those licensed corporations who have completed the FMAS 2002, please complete the FMAS For those licensed corporations who have not completed the FMAS 2002 but, as of 31 December 2003, have had gross operating income derived from asset management and/or giving advice on funds/portfolios, please also complete the FMAS An Acrobat copy of the Questionnaire can be downloaded from the Commission s website at: fmas_questionnaire_2003_eng_ pdf The FMAS 2003 is basically the same as the FMAS 2002, except for (a) updating the terms and expressions in accordance with the Securities and Futures Ordinance, (b) requesting for information on relocation of regional headquarters, where applicable, and (c) requesting for information relating to the marketing of funds. Please read the Guidance Notes annexed to the Questionnaire prior to completing the survey. Please rest assured that all information supplied will be treated in strict confidence and will not be disclosed to any third party except in the form of statistics. If you have any queries on the FMAS or need a hard copy of the Questionnaire, please contact the Investment Products Department at (852) if your company begins with the letter A M, or (852) if your company begins with the letter N Z. Investment Products Securities and Futures Commission Tel: (852) Fax: (852) Website:

2 This survey questionnaire is for completion by those licensed corporations ( LCs ) under the Securities and Futures Ordinance (SFO), including those that are deemed to be registered with the Securities and Futures Commission (SFC) under transitional arrangements, who, as of 31 December 2003, have had gross operating income derived from asset management and/or giving advice on funds/portfolios. If this questionnaire is not applicable to you, please fill in the name of your company and state the reason(s) by ticking the following box(es) and then return this page to us. Name of company: (a) Ceased operation in all regulated activities (b) Group/Company restructuring (c) Not engaged in any of the activities covered in this survey throughout 2003 (d) Others (please specify) Important Notes: 1. Please complete and return this Questionnaire on or before 26 March 2004 by: - Hand or mail to: Ms. Tina So, Director of Investment Products, Securities and Futures Commission, 8 th Floor, Chater House, 8 Connaught Road Central, Hong Kong - Fax to: (852) Before completing this Questionnaire, please read the Guidance Notes at the end of the Questionnaire. In the Guidance Notes you would find the meanings of certain terms and expressions which are used throughout the Questionnaire. For your ease of reference, the terms for which meaning is provided are printed with an annotation mark. 3. To enable a better understanding of the activities and trends in the fund management business, some modifications have been made in the 2003 survey. A new part has been added to give an indication of the marketing of funds in Hong Kong. Additional data has also been requested in relation to the relocation of regional headquarters, where applicable. 4. This Questionnaire contains five parts, namely Parts I, II, III, IV and V. All respondents should complete Parts I, IV and V. Part II is further divided into two sections, Part II(A) and Part II(B). You may need to fill in one or both sections in Part II or Part III. Please see further instructions in Part II and Part III. If a question within a part/section is not applicable, please state N/A in your answer. 5. All figures should be quoted in thousand Hong Kong $. 6. For enquiries about this Questionnaire, please contact the Investment Products Department at (852) if your company begins with the letter A M, or (852) if your company begins with the letter N Z. 1

3 Part I. Corporate Information (1) Name of company FUND MANAGEMENT ACTIVITIES SURVEY (2) Domicile of company (3) Name of CEO/Managing Director (4) Name of Designated Compliance Officer (5) Questionnaire completed by : (a) Name (b) Position (c) Correspondence address (d) Fax number (e) Telephone number (f) address (6) Company website address (7) Is the company a regional headquarter? If yes, please state the countries/cities it covers. Has the company relocated its regional headquarter from Hong Kong during the year 2003? If yes, please state the new location of the regional headquarter. For each of the following activities, please fill in "Y" in the relevant box if any of the following was your primary business, or N if not. Asset Management 1 Giving advice on Funds/Portfolios 2 Distribution of collective investment schemes 3 - End of Part I - 2

4 Part II. Statistics of Fund Activities Which section(s) do I have to fill in? FUND MANAGEMENT ACTIVITIES SURVEY If your company holds Type 9 licence and had gross operating income derived from asset management 1 for the year 2003, please complete Part II(A). If your company holds Type 4 and/or 5 licence and had gross operating income derived from giving advice on funds/portfolios 2 for the year 2003, please complete Part II(B). If your company holds Type 9 and Type 4 and/or 5 licence and had gross operating income derived from both asset management and giving advice on funds/portfolios for the year 2003, please complete both Part II(A) and Part II(B). Part II(A) General Statistics - Asset Management 1 Please complete this section if your company holds Type 9 licence and had gross operating income derived from asset management 1 for the year (Please provide figures as of 31 December 2003) (1) Total assets under management by the company 4 = (A) (please see Diagram (i) in Guidance Notes) Split (A): (A = B + C), where (B) = Amount of assets directly managed by the company in Hong Kong (C) = Amount of assets sub-contracted or delegated to other offices/ third parties for management Split (C): (C = D + E), where (D) = Amount of assets sub-contracted or delegated to other offices/ third parties in Hong Kong for management (E) = Amount of assets sub-contracted or delegated to other offices/ third parties overseas for management (2) Total assets managed in Hong Kong 5 = (B + D) = (F) 3

5 Part II(A) General Statistics - Asset Management / continued (3) Total assets under management (A) Breakdown by types of funds Total assets under management Pension funds 6 (A1) (F1) Mandatory Provident Funds (MPF) 7 (A2) (F2) Institutional funds 8 (A3) (F3) Private client funds 9 (A4) (F4) SFC authorised retail funds 10 (A5) (F5) Other funds 11 (please specify) (A6) (F6) Total assets managed in Hong Kong (4) For total assets under management by the company (A) Breakdown by assets sourced from Hong Kong investors 12 and those from non-hong Kong investors 13 (A) = (AS1) + (AS2) (5) For total assets under management by the company (A) breakdown by assets invested in Hong Kong 14 and those invested outside Hong Kong 15 (A) = (AG1) + (AG2) Note: A1+A2+A3+A4+A5+A6= A Amount of assets sourced from Hong Kong investors (AS1) Amount of assets invested in Hong Kong (AG1) Note: F1+F2+F3+F4+F5+F6 = F Amount of assets sourced from non-hong Kong investors (AS2) Amount of assets invested outside Hong Kong (AG2) (6) For assets invested in Hong Kong (AG1) breakdown by asset classes Equities 16 Bonds 17 Cash, deposits or money market instruments 18 Derivatives or structured products 19 Other investments 20 (please specify) (AG1a) (AG1b) (AG1c) (AG1d) (AG1e) Assets invested in different asset classes HK$'000 Note: AG1a+AG1b+AG1c+AG1d+AG1e= AG1 4

6 Part II(A) General Statistics - Asset Management / continued (7) (8) For total assets managed in Hong Kong 5 (F) - breakdown by regions Hong Kong 14 and PRC Japan Rest of Asia Pacific (including Australia and New Zealand) North America (USA and Canada) UK and Europe Other Regions (please specify) Non Identifiable 28 For total assets managed in Hong Kong 5 (F) - breakdown by asset classes Equities 16 Bonds 17 Cash, deposits or money market instruments 18 Derivatives or structured products 19 Other investments 20 (please specify) (FR1) (FR2) (FR3) (FR4) (FR5) (FR6) (FR7) Assets invested in different regions Note: FR1+FR2+FR3+FR4+FR5+FR6+FR7 = F (FG1) (FG2) (FG3) (FG4) (FG5) Assets invested in different asset classes Note: FG1+FG2+FG3+FG4+FG5 = F Where the value of (A) and/or (F) is substantially different from the respective value reported for FMAS 2002 (e.g. by 10%), please briefly explain if possible. - End of Part II(A) - 5

7 Part II(B) General Statistics Giving Advice on Funds/Portfolios 2 Please complete this section if your company holds Type 4 and/or 5 licence and had gross operating income derived from giving advice on funds/portfolios 2 for the year (Please provide figures as of 31 December 2003) (1) Total assets on which your company advises 21 = (H) (please see Diagram(ii) in Guidance Notes) HK$'000 Split (H): (H = I + J), where (I) = Amount of assets directly advised by the company in Hong Kong (J) = Amount of assets sub-contracted or delegated to other offices/ third parties for providing the advisory services Split (J): (J = K + L), where (K) = Amount of assets sub-contracted or delegated to other offices/ third parties in Hong Kong for providing the advisory services (L) = Amount of assets sub-contracted or delegated to other offices/ third parties overseas for providing the advisory services (2) Total assets on which advice is given in Hong Kong = (I + K) = (M) (3) Total assets on which your company advises (H) Breakdown by types of funds Pension funds 6 Mandatory Provident Funds (MPF) 7 Institutional funds 8 Private client funds 9 SFC authorised retail funds 10 Other funds 11 (please specify) (H1) (H2) (H3) (H4) (H5) (H6) Total assets your company advises (4) For total assets on which your company advises (H) Breakdown by assets sourced from Hong Kong investors 12 and those from non-hong Kong investors 13 (H) = (HS1) + (HS2) Note: H1+H2+H3+H4+H5+H6 = H Amount of assets sourced from Hong Kong investors (HS1) Amount of assets sourced from non-hong Kong investors (HS2) - End of Part II(B) and end of Part II - 6

8 Part III Distribution of Collective Investment Schemes 3 Please complete Questions 1-3 if your company had engaged in the distribution of collective investment schemes 3 for the year Please complete Question 4 if your company distributed collective investment schemes via third parties for the year To capture the full picture of the Hong Kong distribution market, please include ALL the collective investment schemes regardless of whether they are collective investment schemes of the company or a third party. (1) Total value of collective investment schemes distributed by your company 22 for the year 2003 = (O) HK$'000 Split (O): (O =P + Q), where (P) = Value of collective investment schemes sold through your company (Q) = Value of collective investment schemes bought through your company (2) Number of collective investment schemes (only count individual fund or sub-fund i.e. excluding umbrella fund) your company distributed during the year 2003= (R) (3) Total number of collective investment schemes your company distributes = (R) breakdown by number of SFC authorized collective investment schemes and non SFC authorized collective investment schemes (R) = (RS1) + (RS2) Number of SFC authorized collective investment schemes distributed (RS1) Number of non SFC authorized collective investment schemes distributed (RS2) (4) Did your company, during the year 2003, distribute collective investment schemes via: Another type 1 licensed corporation? If yes, please provide the number of Type 1 licensed corporations via your company distributes collective investment schemes = (DL) which An authorized institution under the Banking Ordinance? If yes, please provide the number of authorized institutions via which your company distributes collective investment schemes = (DR) Other third parties? (Please specify) If any, please provide the number of other third parties via which your company distributes collective investment schemes = (DO) - End of Part III 7

9 Part IV. Staff (Please provide figures as of 31 December 2003) (1) For total staff in Fund Management Activities (S) - Breakdown by types of Job Functions Number of staff 23 in different job functions Asset Management Sales and Marketing Research/ Analysis Fund Administration 24 Dealing and/or Trading 25 Corporate planning and Business Management 26 Others 27 (SF1) (SF2) (SF3) (SF4) (SF5) (SF6) (SF7) (2) (3) For total staff in Asset Management and Research/Analysis (SF1 +SF3)= (T) Breakdown by types of product specialty Equities 16 Bonds 17 Cash, deposits or money market instruments 18 Derivatives or structured products 19 Other investments 20 (please specify) For sales and marketing staff (SF2) breakdown by regions served Hong Kong Rest of Asia Pacific Others (i) PRC and/or Taiwan (ii) Others (including Australia and New Zealand) Note: (SF1)+(SF2)+(SF3)+(SF4)+(SF5)+(SF6)+(SF7) =S Number of staff 23 specializing in different products (T1) (T2) (T3) (T4) (T5) Note: (T1)+(T2)+(T3)+(T4)+(T5)=T= (SF1+SF3) Number of staff 23 serving different regions (SF2a) (SF2b) (SF2b(i)) (SF2b(ii)) Note: (SF2b(i)) + (SF2b(ii)) = SF2b (SF2c) Note: (SF2a)+(SF2b)+(SF2c) =SF2 - End of Part IV - 8

10 Part V Activities Through Electronic Means FUND MANAGEMENT ACTIVITIES SURVEY (1) Does the company provide dealing facilities in respect of SFC authorised retail funds on the Internet or through other electronic means (please specify the means if the latter is applicable)? If yes, which of the following services are provided? And, if any of the initial three services are provided through the internet, please also state the percentage of the total transacted values in monetary terms for each of these services that is performed through the internet. Subscription Redemption Switching Other electronic means: % of total transacted values that is performed through the internet: % of total transacted values that is performed through the internet: % of total transacted values that is performed through the internet: Client portfolio reports Investment fund information Net asset values of the fund or portfolio Investment/risk management tools Other services: if yes, please specify If yes, please specify: End of Part V Thank you for taking part in this survey. 9

11 Guidance Notes to Complete the Fund Management Activities Survey Questionnaire Please note the following diagrams and the meanings of the terms and expressions that are used in the Fund Management Activities Survey Questionnaire: Diagram (i) Respondent Company (Those LCs under the SFO, including those that are deemed to be registered with the SFC under transitional arrangements, who hold Type 9 licence and have had gross operating income derived from asset management in 2003) A = Total assets under management by the company (being assets contracted with clients for management but excluding those where the client is another SFC licensed corporation or registered institution) (A = B + C) B = Amount of assets directly managed by the company in Hong Kong C = Amount of assets subcontracted or delegated to other offices/ third parties for management (C = D + E) D = Amount of assets managed by other offices/ third parties in Hong Kong E = Amount of assets managed by other offices/ third parties overseas Total assets under management by the company = A Total assets managed in Hong Kong = B + D = F 10

12 Diagram (ii) Respondent Company (Those LCs under the SFO, including those that are deemed to be registered with the SFC under transitional arrangements, who hold Type 4 and/or 5 licence and have had gross operating income derived from giving advice on funds/portfolios in 2003) H = Total assets on which the company advises (being assets contracted with clients for providing the advisory services but excluding those where the client is another SFC licensed corporation or registered institution) (H = I + J) I = Amount of assets directly advised by the company in Hong Kong J = Amount of assets subcontracted or delegated to other offices/ third parties for providing the advisory services (J = K + L) K = Amount of assets sub-contracted or delegated to other offices/ third parties in Hong Kong L = Amount of assets sub-contracted or delegated to other offices/ third parties overseas Total assets on which the company advises = H Total assets on which advice is given in Hong Kong = I + K = M 11

13 Meanings of terms and expressions: FUND MANAGEMENT ACTIVITIES SURVEY 1. Asset management Asset management refers to the provision of services which constitutes type 9 regulated activity as defined in Schedule 5 of the Securities and Futures Ordinance and whereby the assets are managed by the respondent company on a discretionary and/or nondiscretionary basis pursuant to contracts or arrangements with clients. Discretionary asset management means that the respondent company makes investment decision on clients behalf and deals in securities and/or futures contracts in accordance with such decisions. Non-discretionary assets management means that clients specific instructions are required before the respondent company can trade for the clients in securities and/or futures contracts. Non-discretionary asset management would involve provision of other services such as order execution or other administrative services i.e. not pure advisory. 2. "Giving advice on funds/portfolios" 3. Distribution of collective investment schemes 4. Total assets under management by the company = A 5. Total assets managed in Hong Kong = F Giving advice on funds/portfolios refers to the provision of pure investment advisory services on funds/portfolios and which constitutes type 4 and/or type 5 regulated activities as defined in Schedule 5 of the Securities and Futures Ordinance. Distribution of collective investment schemes to other investors/third parties/institutions. All those assets being the subject of contracts entered into by the respondent company and its clients for management by the respondent or its delegates, i.e. all assets subcontracted or delegated to other offices/ third parties for management purpose should be included. To avoid double counting, where a client is another SFC licensed corporation or registered institution, the assets concerned should not be included. Assets for which management activities are carried out in Hong Kong. These include assets directly contracted with clients by the company and managed in Hong Kong, and those which are delegated to other offices/ third parties in Hong Kong for management. 6. Pension funds Client funds that are designated as pension or retirement funds. Mandatory Provident Fund (MPF) schemes should not be included. 7. "Mandatory Provident Funds (MPF)" Constituent funds of a master trust scheme or an industry scheme as defined under the Mandatory Provident Funds Scheme Ordinance. For the avoidance of doubt, the underlying approved pooled investment funds (APIF) should not be added. 8. Institutional funds Client funds that are non-pension, non-retail in nature, e.g. funds from shareholders, associated companies, fund houses (including an investment management company of an offshore retail fund which has contracted the respondent to manage the fund assets), insurance companies, large corporate clients. Where funds authorised by the SFC are offered to institutional clients only, these should be classified under Institutional Funds. 9. Private client funds Client funds that are non-institutional, non-retail, non-pension in nature, e.g. individual high net worth clients (average personal net worth exceeding US$1 million during the year) with own accounts or portfolios managed on an individual or pooled basis. 10. SFC authorised retail funds Retail funds authorised by the SFC. Where funds authorised by the SFC are offered to institutional clients only, these should be classified under Institutional Funds. Where funds are offered to both retail and institutional clients, these should be separately identified and classified accordingly. 12

14 11. Other funds Other types of funds, e.g. government funds (funds from a government or a state), charity funds (funds from a charitable organisation), and private funds that do not require authorization by the SFC. 12. Assets sourced from Hong Kong investors 13. Assets sourced from non-hong Kong investors 14. "Assets invested in Hong Kong" 15. "Assets invested outside Hong Kong" Assets that are attributable to Hong Kong investors. The respondent is expected to use its best efforts to classify the underlying investors based on available information. Investors with non-hong Kong registered addresses may be classified as Hong Kong investors if it is known to the respondent that the assets were sourced from Hong Kong. Similarly, for nominee accounts, if the underlying investors or sources are known to the respondent, they should be identified and classified accordingly. Assets that are attributable to non-hong Kong investors. Assets invested in instruments (e.g. equities, bonds, money market instruments, derivatives) that are issued by an entity incorporated in Hong Kong or incorporated overseas but operating in Hong Kong, issues that are listed in Hong Kong, or deposits with an Authorised Institution in Hong Kong as defined under the Banking Ordinance. For any other investments, the respondent is expected to use its best efforts to identify if the investment has a Hong Kong origin. Assets invested in instruments of origins other than Hong Kong. 16. "Equities" Shares of a company, including common stock, depository receipts, etc. 17. "Bonds" Debt instruments issued for a period usually of more than one year. e.g. debt securities issued by the Government, public organisations, or corporates (including debentures, convertible bonds, zero coupon bonds, preferred stock, eurobond, etc.) 18. "Money market instruments" 19. "Derivatives or structured products" Short term debt securities. Financial instruments such as futures, warrants, options, swaps, structured notes and structured deposits (e.g. equity-linked deposits, credit-linked deposits) whose characteristics and value depend on the characteristics and value of an underlying asset. Such instruments are to be reported at available market value of the contracts. 20. "Other investments" Investment instruments other than equities, bonds, money market instruments or derivatives. (e.g. real estate or other low liquidity assets). Where the investment is in a collective investment scheme, the respondent is expected to use its best efforts to classify in accordance with the underlying investments of the scheme based on available information. 21. "Total assets on which your company advises = H" 22. Total value of collective investment schemes distributed by your company All those assets being the subject of contracts entered into by the respondent company and its clients for pure investment advisory services by the respondent or its delegates, i.e. all assets sub-contracted or delegated to other offices/ third parties should be included. To avoid double counting, where a client is another SFC licensed corporation or registered institution, the assets concerned should not be included. Refers to the value of the collective investment scheme at the point of purchase or sale conducted through your company. Please only include those transactions made through your company, and do not include those conducted through other companies of the same group to which your company belongs. 13

15 23. Number of staff Refers to the total number of staff in Hong Kong involved in any fund management activities. The respondent is expected to use its best efforts based on available information to identify the primary function and the principal office for any staff. For any staff member who performs multiple roles or has more than one product specialty or serves more than one geographical region, this headcount can be apportioned accordingly eg. any staff member who manages funds or portfolios and also engages in the marketing of funds for the company, then the headcount can be apportioned as 0.5 management of funds and 0.5 sales and marketing. Likewise, please apportion any staff who has more than one product specialty or serves more than one geographical region. PLEASE ENSURE THAT THERE IS NO DOUBLECOUNTING OF HEADCOUNT IN THE SURVEY. ANY HEADCOUNT SHOULD ONLY BE REPORTED EITHER ONCE OR APPORTIONED IN DIFFERENT FUNCTIONS, SPECIALTIES OR REGIONS WHICH WHEN AGGREGATED SHOULD BE EQUAL TO OR LESS THAN ONE. FOR ANY STAFF MEMBER WHO SERVES MORE THAN ONE COMPANY WITHIN A GROUP OF COMPANIES, THE GROUP SHOULD APPORTION THE HEADCOUNT IN DIFFERENT COMPANIES WHICH WHEN AGGREGATED SHOULD BE EQUAL TO OR LESS THAN ONE. 24. Fund administration Refers to operation, control and other support staff (e.g. settlement, compliance, accounting, risk management etc) who are involved in the management of clients funds and portfolios. 25. Dealing and/or Tr ading Refers to the dealing and/or trading of investment funds and/or any types of investments incidental to the management of clients funds and portfolios. 26. Corporate planning and business management Refers to any staff whose responsibility is to be in charge of the company s strategic planning and the continuous development of the fund management business activities. 27. Others Refers to other job functions directly related to the activities in the management of clients funds and portfolios not included in the breakdown. 28. Non identifiable Refers to the amount of assets invested in instruments whose ultimate origin in terms of geographical region cannot be clearly determined e.g. Assets invested in funds, schemes or structures whose underlying investments are other funds, schemes or structures the origins of which are not easily identifiable. For enquiries about the meanings of terms and expressions, please contact the Investment Products Department at (852) if your company begins with the letter A M, or (852) if your company begins with the letter N Z. 14