Welcome to the GC Edge Newsletter, your source for key updates on compliance and anti-money laundering (AML) developments across Hong Kong, Singapore, and Australia. Stay informed on regulatory changes, industry trends, and critical insights relevant to financial institutions.
Hong Kong
The SFC reprimanded and fined Hang Seng Bank Limited $66.4 million for misconduct in selling practices of investment products. This action was part of several updates from the SFC in 2025. The SFC’s disciplinary action stemmed from a referral by the Hong Kong Monetary Authority (HKMA). The investigation revealed serious regulatory failures in relation to the bank’s sale of collective investment schemes (CIS) and derivative products, as well as overcharging its clients and making inadequate disclosure of monetary benefits to them during various periods over the course of nine years between February 2014 and May 2023.
The SFC found that Hang Seng Bank’s sales practices in relation to CIS products were problematic. From June 2016 to November 2017, 111 client accounts executed 100 or more CIS transactions, with 46 clients being influenced by their relationship managers’ solicitation or recommendation. These frequent trades resulted in significant transaction costs borne by the clients, which greatly affected their overall profit and loss. The bank’s internal controls were found to be deficient, as they did not adequately supervise and monitor the sale of CIS to its clients. Additionally, the bank failed to keep a sufficient audit trail to ensure that transactions were genuinely initiated by clients.
In relation to the sale and distribution of derivative products, the HKMA’s investigation revealed that from February 2014 to December 2018, 388 clients who were not characterised by the bank as having knowledge of the nature and risks of derivatives purchased derivate funds in 629 transactions. Among these, 148 transactions involved products whose risk level was higher than the clients’ risk tolerance level. The joint investigation by the SFC and the HKMA also found that during various periods between November 2014 and May 2023, Hang Seng Bank had retained monetary benefits from client transactions in circumstances where it should not have done so under applicable regulatory standards.
In other news, the SFC has expanded the list of structured fund offerings in Hong Kong. This includes the introduction of Single Stock Leveraged and Inverse (L&I) Products and Defined Outcome Listed Structured Funds. These products, which have been gaining popularity overseas, offer investors tools for trading or hedging individual stocks and provide customized investment exposures. To safeguard investors, the SFC will only accept L&I Products linked to highly liquid mega-cap stocks with a maximum leverage factor of 2x to -2×1. The enhanced framework emphasizes both market development and investor protection, setting clear standards for product authorisation and engagement with industry stakeholders.
The SFC this month has been active in the enforcement front where they have:
- Commenced criminal proceedings at the Eastern Magistrates’ Court against Mr. Lin Tai Fung and his brother-in-law, Mr. Or Chun Nin, for alleged conspiracy to commit false trading in the shares of Pa Shun International Holdings Limited (Pa Shun) from 9 April 2017, to 7 March 2018. Lin was also charged for failing to notify The Stock Exchange of Hong Kong Limited of changes in his interest in the shares of Pa Shun on eight occasions.
- Imposed sanctions for insider dealing in Dan Form shares. The SFC commenced proceedings in the Market Misconduct Tribunal (MMT) against Ms. Cynthia Chen Si Ying, Mr. Wen Lide, Mr. Sit Yuk Yin, and Ms. Choi Ban Yee for suspected insider dealing in the shares of Asiasec Properties Limited (formerly known as Dan Form Holdings Company Limited). The proceedings allege that prior to a public announcement on 22 September 2016, these individuals were in possession of inside information about an acquisition and engaged in trading activities based on that information. The tribunal found that Ms. Choi Ban Yee and her husband, Mr. Sit Yuk Yin, made illicit profits from trading shares based on insider information.
- Collaborated with the Hong Kong Exchanges and Clearing Limited (HKEX) in enforcement action against FingerTango Inc. and its former directors for misconduct. The HKEX and SFC took disciplinary action against FingerTango Inc. (Stock Code: 6860) and eight former directors for misconduct. The Exchange censured FingerTango Inc. and imposed a Director Unsuitability Statement against Mr. Liu Zhanxi, Mr. Wang Zaicheng, Mr. Wu Junjie, and Ms. Yao Minru, declaring them unsuitable to occupy a position as director or within senior management of the company or any of its subsidiaries. The SFC and HKEX’s investigations revealed that the directors’ misconduct resulted in over $660 million of losses for FingerTango and its subsidiaries. The SFC commenced legal action in the Court of First Instance (CFI) seeking various court orders, including disqualification and compensation orders, against FingerTango and its eight former directors.
Singapore
There were mixed opinions on Singapore’s monetary policy outlook for 2025 following the recent easing of inflationary pressures.
United Overseas Bank (UOB) anticipates that MAS will ease its monetary policy slightly in January 2025 by reducing the slope of the Singapore Dollar Nominal Effective Exchange Rate (S$NEER) policy band from 1.5% to 1% per annum. This adjustment is based on moderating inflationary pressures and a gradual return to price stability. UOB describes this change as an effort to align the pace of the Singapore dollar’s appreciation with a cyclically neutral path. The bank predicts that no further changes to the S$NEER slope will be made after this slight adjustment for the remainder of 2025. UOB expects core inflation to average 1.7% for the year, supported by a stable domestic economy and decreasing global cost pressures.
In contrast, RHB forecasts that MAS will maintain its current policy stance throughout the first half of 2025. The bank points to the sustained disinflationary trend and manageable inflation risks, arguing that Singapore’s economic fundamentals remain strong enough to support a more cautious approach. RHB also expects GDP growth to reach 3% in 2025, which aligns with the upper end of the official forecast range of 1–3%. This growth is anticipated to be driven by a global technology upcycle and resilient domestic demand, although external risks such as geopolitical tensions remain on the radar. RHB’s inflation outlook differs slightly, projecting core inflation to reach 1.8% and headline inflation slightly higher at 2.3%.
Ultimately, the differing forecasts from United Overseas Bank (UOB) and RHB regarding the Monetary Authority of Singapore’s (MAS) policy stance for 2025 are creating varied impacts across different sectors. Investors are adjusting their portfolios based on these predictions, with some opting for conservative investments due to UOB’s anticipated policy easing, while others remain optimistic about RHB’s forecast of sustained economic growth. Financial institutions are preparing for potential changes in the Singapore Dollar Nominal Effective Exchange Rate (S$NEER) policy band, which could affect their foreign exchange strategies and interest rate products. Fund managers are reassessing their asset allocations to balance between expected moderate inflation and stable economic conditions. Brokers are navigating market volatility by providing clients with insights and strategies to capitalize on the evolving economic landscape. Real estate firms are also influenced, as changes in monetary policy can impact property prices and demand, prompting them to adjust their market strategies accordingly.
Australia
The Australian Securities and Investments Commission (ASIC) has been actively monitoring and addressing key issues within its regulatory remit in 2025. ASIC has identified significant current, ongoing, and emerging issues that impact the safety, integrity, and trust of Australia’s financial system. These issues include increased market volatility, geopolitical changes, the global accumulation of debt, perceived and real inequality of wealth, shifts in capital investment, and advances in artificial intelligence, data, and cyber risk. ASIC has also been focusing on private markets through its surveillance work, reviewing governance processes and practices of responsible entities of retail private credit funds.
Most importantly, ASIC issued new requirements for credit licensing related to buy now pay later contracts, effective from June 2025:
- The Australian Government has amended the National Consumer Credit Protection Act 2009 (National Credit Act) to extend the application of the National Credit Code (Schedule 1 of the National Credit Act) to buy now pay later contracts. This change is part of the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024 (BNPL Act), which received royal assent on December 10, 2024.
- From 10 June 2025, providers of buy now pay later contracts will need to hold a credit licence that authorises them to engage in credit activities as a credit provider. Providers who do not have a credit licence must apply for one, have ASIC accept the application for lodgement, and become a member of the Australian Financial Complaints Authority (AFCA) before 10 June 2025. If a provider already has a credit licence but it does not authorize them to engage in credit activities as a credit provider, they will need to apply for a variation.
- ASIC has emphasised the importance of acting early to apply for or vary a credit licence, as it may take time to obtain additional information required for the application, such as criminal history checks. To minimise the risk of losing the benefit of the transitional arrangements, providers should lodge their application by 11 May 2025.
In other news, AUSTRAC annouced that the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (the Amendment Act) was passed by the Parliament on 29 November 2024. The Amendment Act aims to modernise Australia’s AML/CTF regime to ensure it can effectively deter, detect, and disrupt money laundering and terrorism financing, and meet international standards set by the Financial Action Task Force (FATF). The Amendment Act has three key objectives: expanding the AML/CTF regime to additional high-risk services, modernising the regulation of digital currency and virtual asset and payments technology, and simplifying and clarifying the AML/CTF regime to increase flexibility and reduce regulatory impacts.
The new AML/CTF program requirements shift the focus from a compliance-based approach to a risk-based, outcomes-oriented approach. This includes identifying and assessing risks related to money laundering, terrorism financing, and proliferation financing. Entities must create and maintain appropriate AML/CTF policies to manage and mitigate these risks and ensure compliance with the general requirements of the AML/CTF Act and Rules.
The new framework emphasises the role of governing bodies and senior management in overseeing risk and compliance. With there now being an explicit requirement to appoint a fit and proper AML/CTF compliance officer responsible for implementing the AML/CTF program.
The GC Edge
