Global Trustee and Fiduciary Services Bite-Sized Issue 3 2025

12 QUICK LINKS CRYPTOASSETS CSDR EMIR FINTECH FSB OPERATIONAL RESILIENCE SUSTAINABLE FINANCE/ESG T+1 ASIA PACIFIC EUROPE IRELAND LUXEMBOURG NORTH AMERICA UNITED KINGDOM Global Trustee and Fiduciary Services Bite-Sized | Issue 3 | 2025 SFC Proposes Registrar Fee Limits Under Uncertificated Securities Market Regime On 24 February 2025, the SFC launched a consultation on proposed limits for three types of fees that an approved securities registrar (ASR) may charge under the upcoming uncertificated securities market (USM) regime in Hong Kong. The fees are: • The facility set-up fee for investors to hold and manage uncertificated securities; • Dematerialisation fee; and • Fee for processing and registering securities transfers. The SFC says that the main reason for proposing limits on these fees is to provide a degree of protection to investors since they are not in a position to negotiate the fees. Also, aligning the charging basis will help simplify processes and avoid confusion for the market. In developing the limits, the SFC says it has sought to strike a balance among the costs shared by different stakeholders and maintain reasonable fees for investors. This should encourage investors’ early participation in USM and also ensure ASRs’ businesses remain commercially viable. The consultation period closes on 23 April 2025. Subject to the legislative process of USM-related subsidiary legislation and the market readiness, the SFC says it targets to implement the USM regime in early 2026. Link to Consultation here SFC Supports Listing of Alternative Funds to Broaden Investor Choice and Bolster Market Development On 17 February 2025, the SFC clarified its regulatory requirements in a circular to facilitate the listing of closed-ended alternative funds on the Stock Exchange of Hong Kong Limited (SEHK). The new regulatory guidance aligns with the HKSAR Government’s plan to broaden private equity fund distribution as set out in the 2024 Policy Address. The SFC says that, as things stand, the current regulatory regime already allows alternative funds to be authorised and listed on SEHK without any impediments. As such, eligible alternative funds are welcomed to list in Hong Kong. In the circular, the SFC clarifies its requirements for authorising closed-ended funds that invest mainly in private and less liquid assets (i.e., alternative funds). A key criterion is that an alternative fund seeking authorisation should be sizeable with an expected market capitalisation of HKD780 million (USD100 million). Also, the fund should preferably be able to generate regular income streams, depending on its investment strategy. To balance the potential benefits and risks associated with closed-ended alternative funds, the SFC requires intermediaries to assess clients’ knowledge of these complex products before carrying out a transaction on their behalf. Intermediaries should also ensure their clients’ net worth is commensurate with the risks assumed. Link to the Circular here EUROPE ESMA Proposes Guidelines on Product Supplements On 18 February 2025, the European Securities and Markets Authority (ESMA) published a Consultation Paper (CP) asking for input on Guidelines on supplements that introduce new types of securities to a base prospectus. ESMA says the aim of the guidelines is to harmonise the supervision of so-called ‘product supplements’ across national competent authorities (NCAs) as approaches to supervision in this area have diverged in the past. The consultation period closes on 19 May 2025.