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As backers of rival third-generation (3G) mobile telephony standards compete for a share of China's rapidly expanding telecommunications market, China Telecom's announcement that it will be able to offer 3G services within seven or eight months of receiving official approval makes the government's forthcoming decision on licensing even more crucial.
Hong Kong has a legal and regulatory framework to deal with money laundering and terrorist financing. Its aim is to bring the framework into line with the revised 40 Recommendations on Anti-Money Laundering and Nine Special Recommendations on Terrorist Financing issued by the Financial Action Task Force. However, some work remains to be done to ensure full compliance with the revised recommendations.
The Hong Kong Securities and Futures Commission (SFC) has issued a circular to clarify certain licensing application issues and the licensing process for fund managers as part of its initiatives to streamline and simplify the process. The circular provides practical guidance to overseas fund managers (particularly hedge funds) when applying for an SFC licence in Hong Kong.
The Hong Kong Securities and Futures Commission has issued a circular designed to assist financial intermediaries in ensuring that their investment recommendations suit their clients. It also sets the benchmark for acceptable conduct by financial intermediaries.
The Hong Kong Stock Exchange and the Securities and Futures Commission have published a policy statement on the listing of overseas companies. Its purpose is to facilitate the listing of such companies by clarifying the requirements of the listing rules and providing guidance for potential issuers and their advisers on shareholder protection.
The liquidators of a high-profile Hong Kong hedge fund that collapsed in 2004 have recently commenced proceedings against the fund's auditor, custodian and administration services provider. The case has a number of commercial and practical implications for the managed funds industry and puts Hong Kong's preferred fund structure in the spotlight.
In the past few months the Hong Kong financial services market has generally been moving towards greater liberalization while at the same time attempting to apply higher standards of risk management. Recent measures have included changes to the Real Estate Investment Trust Code and proposals to allow the Securities and Futures Commission to fine companies and directors for breaches of listing rules.
The Hong Kong Investment Funds Association recently raised a number of issues with the Hong Kong Securities and Futures Commission (SFC) relating to the licensing and regulatory regime for investment funds. The SFC's response largely maintains its regulatory line, with few concessions on issues such as temporary licensing, asset management licensing and responsible officer requirements.
Telecommunications and broadcasting stakeholders have submitted their final contributions to the government's three-month consultation on the establishment of a unified regulator for the electronic communications sector. The Communications Authority, to be composed of seven members, will replace the Telecommunications Authority and the Broadcasting Authority.
In April 2005 the Telecommunications Authority released a consultation paper on interconnection with in-building wiring systems, or 'blockwiring'. The paper proposes guidelines which identify when the operators of in-building telecommunications systems should make blockwiring available. This pro-competitive move should ultimately give consumers a greater choice of services.
The Hong Kong government has announced the withdrawal of its Type II interconnection policy. Its decision appears to have been influenced by what it describes as the high proportion of households connected to two customer access networks; it believes that withdrawal of the Type II interconnection policy will encourage even greater investment in self-built networks.