SIX Expands Compliance Service in Hong Kong

Data services and solutions provider SIX Financial Information has expanded its regulatory coverage to include authorized products for Hong Kong clients, the company has announced.

The Securities and Futures Commission (SFC) requires all financial institutions to authorize certain products, such as equity funds and specialized schemes, including money market and futures funds. Financial institutions must report the product transactions to the Hong Kong Monetary Authority twice a year.

"The compliance challenge institutions are facing is to ensure accuracy when comparing and identifying their portfolio instrument transactions to the published SFC list, which is currently a manual and cumbersome process," the company says.

Harald Rudolph, Zurich-based senior product manager at SIX Financial Information, says there are benefits to banks that come from having a well-maintained predefined list of authorized products. "It means they don't have to think about the case-by-case criteria a product has to fulfill," he says.

However, the SFC data, while publically available, does not include information such as identifiers of entities and instruments, like the ISIN or the legal entity identifier, which impedes clients who want to focus on their core business and automate their compliance checks.

"Banks want their compliance checks to be automated, not on a case-by-case basis. They need this data to be integrated in their core banking solutions. Most importantly, the data needs to be up to date and linked with all existing data to get a holistic view on compliance and possible risks," says Rudolph.

"To get this into a core banking solution—especially in Asia, where there is a growth in core banking solutions—banks need reliable data delivery and suitable identifiers. And that's what we do for them. Through the consistent data formats, we continuously deliver the up-to-date list of authorized products in their portfolio or list of recommended products, so they have efficient and automated services."

Jacob Gertel, Zurich-based senior product manager for legal and compliance data at SIX, adds: "More and more, we see global banks that are active all over the world— this data is not just for Asia, they can use it anywhere. Everything we do is globally available because SIX has operations all over the place."

SIX Financial Information's expanded service will be available immediately to its clients, says Rudolph.