The Hong Kong Institute of Chartered Secretaries

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The Hong Kong Institute of Chartered Secretaries Submission: Specified Forms for the New Licensing Regime for Trust and Company Service Providers The Hong Kong Institute of Chartered Secretaries

1 The Hong Kong Institute of Chartered Secretaries Submission: Specified Forms for the New Licensing Regime for Trust and Company Service Providers The Hong Kong Institute of Chartered Secretaries 香港特許秘書公會 (Incorporated in Hong Kong with limited liability by guarantee) 3/F, Hong Kong Diamond Exchange Building, 8 Duddell Street, Central, Hong Kong Tel: (852) Fax: (852) ask@hkics.org.hk Website:

2 15 December 2017 By Only: Companies Registry 14/F, Queensway Government Offices 66 Queensway Hong Kong Attn: Mr Roger Wong, Deputy Registry Manager (Acting) Dear Sirs Re: Specified Forms for the New Licensing Regime for Trust and Company Service Providers (TCSP) About HKICS The Hong Kong Institute of Chartered Secretaries (HKICS) is an independent professional institute representing Chartered Secretaries as governance professionals in Hong Kong and Mainland China with over 5,800 members and 3,200 students. HKICS originates from The Institute of Chartered Secretaries and Administrators (ICSA) in the United Kingdom with 9 divisions and over 30,000 members and 10,000 students internationally. HKICS is also a Founder Member of Corporate Secretaries International Association Limited (CSIA), an international organisation comprising 14 national member organisations to promote good governance globally. General We have general Member views on the forms as follows: The Registrar of Companies (CR) should only disclose such information as necessary for performance of the function as TCSP regulator and no more in relation to the information provided by the applicant for the application along with the supporting documents. In this connection, the CR is suggested to liaise with the Privacy Commissioner as to the extent of consents required from applicant for background checks, the requisite background checks, the 2

3 data collection statements and proposed disclosures to the public under the various forms. There should only be disclosure as needed for the regulatory objectives. There were specific concerns as to fingerprinting under certain forms. This may well not be acceptable to the relevant applicants/directors, especially those based in overseas jurisdictions where this would be an invasion of privacy. There is also an issue raised as to whether an overseas incorporated company that sources clients in Hong Kong but only carries out its TCSP activities outside Hong Kong will be required to obtain a licence? Please kindly clarify this. TCSP 1 Application for a Trust or Company Service Provider Licence We have the following Member views on the form: As the CR is regulator over TCSPs, it would be useful to set out the penalties associated with failure to obtain a licence at the top of the form. This would illustrate the seriousness of the need for a licence. The public should be made clearly aware of this. Will the organisation chart of licensee form part of the public records? Also, will CR comment on the organisation structure and set licensing conditions to require amendment to the organisational structure? Please kindly clarify this. This comment relates to other forms, where applicable. As to correspondence address for director, would it be sufficient to state the office address? Please kindly consider clarifying this under the notes to the form. This comment relates to other forms, where applicable. If there is no ultimate owner above 25%/controller would there be need to complete ownership details? Please kindly consider this matter. This comment relates to other forms, where applicable. Could the CO also be MLRO? Please kindly consider clarifying this under the notes to the form. Also, under Part 4, in relation to the Position in business to be filled in for the CO and MLRO, it is suggested to add the word applicant s before business. This comment also applies to Schedule C of TCSP 6. 3

4 For overseas incorporated corporate director not registered with CR under part 16 would a business registration certificate be required? It would appear under the Checklist for submission of supporting documents to be compulsory but Part 3 on page 6 of TCSP 1 says the completion of business registration certificate No should only be where applicable. Please kindly clarify this. As to the exemption from licence, is this only to be applicable where the applicant is directly owned by CPA Practice/CPA? Please kindly clarify. On the signing of form, there is a question raised as to what would be the position if director of corporate director is also a body corporate? Would the signing of form by individual authorised representative with authorisation letter from the board suffice? Please kindly clarify. It is noted that certain information to complete the form may not be applicable to all circumstances e.g. Hong Kong telephone number may not be applicable to an individual and/or a corporation s ultimate owner/partner/director who resides or is located overseas. Also, the licence number may not be applicable under the annex to form TCSP4. We suggest to review and add if applicable for fields which may not be applicable to all circumstances. This comment relates to other forms, where applicable. It is suggested to state the full title Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance for Cap 615 throughout the form. This comment relates to other forms, where applicable. Under the notes relating to the fees, it would be helpful to the applicant if the fee payable for each form to submit is stated therein rather than referring to the Guideline on Licensing of TCSP. This comment relates to other forms, where applicable. It is suggested that under checklist for submission of supporting documents for a sole proprietor and/or partnership, the extract of information on the business register could be waived as a copy of the business registration certificate would already have been provided. We have Member comments that HKICS Members should be recognised as being fit and proper. Please kindly consider. 4

5 TCSP 2 Application for Renewal of a Trust or Company Service Provider Licence It may be appropriate for the penalties set out in Part 5 to be set out at the top of the form as TCSP 3 Application for Approval to Become an Ultimate Owner/a Partner/a Director of a TCSP It may be appropriate for the penalties set out in Part 4 to be set out at the top of the form as A minor point to note is that the word Licensee seems to have been omitted from the title of the form after Trust or Company Service Provider. Please kindly add. TCSP 4 Statement on Fit and Proper Criteria (For applicant/ultimate owner/partner/directorindividual) It may be appropriate for the penalties set out in Part 7 to be set out at the top of the form as In the UK, Her Majesty Royal Customs (HMRC) access the applicant s database and European intelligence. Is there a similar process, or is simple reliance made on the certification? If verification would be done, then should the form contain the consent for data collection? There is a specific concern that there should be no need for an individual to agree to his or her fingerprint impression being taken by the Hong Kong Police Force in connection to the application. There are TCSP license applicants that may have overseas individuals as ultimate owners or directors, and it could be too much of an invasion of privacy to require fingerprinting from all individuals as directors and/or ultimate owners. This comment applies to other forms, as applicable. It seems that the witness to the signature must be a responsible officer, a practicing professional or a staff of the Companies Registry. If this is the case, this should be clarified under the notes. 5

6 TCSP 5 Statement on Fit and Proper Criteria (For partner/director corporation) It may be appropriate for the penalties set out in Part 7 to be set out at the top of the form as In the UK, Her Majesty Royal Customs (HMRC) access the applicant s database and European intelligence. Is there a similar process, or is simple reliance made on the certification? If verification would be done, then should the form contain the consent for data collection? As there is no personal information to be provided under this form, should item (d) of Confirmation under Part 7 mentioning the personal information collection statement be deleted? TCSP 6 Notification of Changes in Particulars Under Schedule C and the respective checklist for submission of supporting documents, in relation to notification over newly added ultimate owner /partner/director, there seems to be an unnecessary duplication in asking for the information and supporting documents for these relevant persons (as these have been asked for under TCSP 3 and TCSP 4 when applying for approval to become the ultimate owner/partner/director). This also applies to Schedule D of the form. For Schedule E of the form, please kindly consider if there is a necessity to ask for the effective date of change of fit and proper status and cessation of exemption thereof. Please consider to add under the notes to remind the licensee that the licence may have to be suspended or revoked unless the same person is reported under Schedule B as ceasing to be a Relevant Person of the Licensee on the same date. Under the checklist for submission of supporting documents for the licensee, as noted, an authorization letter signed by all partners to make the notification is required when every notification of change is made. This would appear to be undue burdensome for a partnership having a large number of partners, particularly where some partners reside overseas to provide such authorization letter. Please consider simplifying the requirement. TCSP 7 Notification of Cessation of Carrying on TCSP No comments 6

7 Should you have any questions, please feel free to contact Samantha Suen FCIS FCS(PE), Chief Executive, HKICS or Mohan Datwani FCIS FCS(PE), Senior Director, and Head of Technical and Research, HKICS at or Yours faithfully, Ivan Tam FCIS FCS President The Hong Kong Institute of Chartered Secretaries 7

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