Government welcomes passage of Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022
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Under the amended Anti-Money Laundering and Counter-Terrorist Financing Ordinance, any person who engages in virtual asset exchange business is required to apply for a licence from the Securities and Futures Commission (SFC). The relevant persons must satisfy the fit and proper test and comply with the anti-money laundering and counter-terrorist financing (AML/CTF) requirements under the Ordinance (including requirements on customer due diligence (CDD) and record keeping), as well as other regulatory requirements on investor protection (such as safe custody of client assets, financial soundness and avoiding conflicts of interest). In addition, licensed VA exchanges and their wholly owned subsidiaries need to regularly submit audited accounts and financial information to the SFC. The SFC is also empowered to enter business premises for conducting inspections and investigations when necessary. The SFC will carry out a 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. There are two categories under the registration regime. Any dealer who intends to engage in non-cash transactions at or above HK$120,000 in the course of business is required to register as a Category A registrant, the registration requirement of which is simple and straightforward. A Category A registrant is not required to implement specified measures on CDD and record keeping. Any dealer who is seeking to engage in cash transactions at or above $120,000 in the course of business is required to register as a Category B registrant in accordance with the requirements of the Financial Action Task Force. A Category B registrant is subject to AML/CTF supervision. For dealers who only conduct transactions under HK$120,000, no registration is required.
Mr Hui said, "The amended Ordinance establishes an effective AML/CTF regulatory regime and fulfils the relevant international obligations. This in turn strengthens Hong Kong's status as an international financial centre. For VA exchanges, a comprehensive and balanced regulatory framework can protect investors and promote responsible and sustainable industry development."
The amended Ordinance will come into effect in phases in the second quarter of 2023 to provide industries concerned with sufficient time to prepare for the new regulatory requirements. The amended Ordinance, including the registration regime for dealers in precious metals and stones, will take effect on April 1, 2023, and the licensing regime for VA service providers as well as other amendments on AML/CTF requirements, will take effect on June 1, 2023. Transitional periods will be provided under the two new regimes to give industries concerned sufficient time to apply for a licence or undergo registration in accordance with the regulatory regimes.
Ends/Wednesday, December 7, 2022
Issued at HKT 18:00
Issued at HKT 18:00
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