The Securities and Futures Commission of Hong Kong (SFC) issued new guidance to regulate the use of external electronic data storage providers (EDSPs1) by licensed firms that intend to keep (or have previously kept) records or documents required to be maintained pursuant to the statutory recordkeeping rules and anti-money-laundering regime (Regulatory Records) in an online environment. The new guidance2 and related FAQs released October 31, 2019, while extensive and significant, confirm the Hong Kong regulator’s willingness to provide firms with a degree of flexibility in complying with the statutory recordkeeping obligations and clarify the baseline obligations when entering into outsourcing arrangements for the storage of records in electronic format with third-party vendors.
Whom does this affect?
The new requirements are relevant to firms that
- already use EDSPs “exclusively” for storage of records (without prior SFC approval) or
- plan to use EDSPs in any capacity
but does not apply to firms that keep
- original records at premises approved by the SFC or
- identical electronic records at both its approved premises and the EDSP (whether located in Hong Kong or…
