Conflicts of interest

International cooperation agreements

Global Financial Innovation Network

Q1 : Is it permissible for Platform Operators to use gifts to promote virtual assets as an asset class?

A: The underlying purpose of restricting the offering of gifts by Platform Operators is to avoid the use of gifts to distract investors from the features and risks of a particular virtual asset. In this regard, if gifts are offered in such a way that they are linked to virtual assets as an asset class, then such gifts will be bound by this requirement as investors may be distracted from the unique features and risks of individual virtual assets.

(Key references: Paragraph 7.26(c) of the VATP Guidelines)

Employee dealings

Q2 : How often must employees provide their trade confirmations and statements of account under paragraph 13.7(d) of the VATP Guidelines?

A: It is expected that staff should provide the trade confirmations and statements of account to their Platform Operators on a timely basis, for example, within one week after the receipt of these documents.

(Key references: Paragraph 13.7(d) of the VATP Guidelines)

Q3 : When Platform Operators require staff to provide them with copies of contract notes and statements of account under paragraph 13.7(d) of the VATP Guidelines, will they be breaching the Personal Data (Privacy) Ordinance?

A: Platform Operators should explain to their staff why they require the copies of contract notes and statements of account and what they may do with these copies and obtain their consent.

(Key references: Paragraph 13.7(d) of the VATP Guidelines)

Q4 : According to paragraph 13.10 of the VATP Guidelines, a Platform Operator can only deal in virtual assets for an employee of another platform operator if it has received written consent from the other platform operator. Is it acceptable to obtain implied consent?

The absence of a reply should raise doubt or concern that the consent is not forthcoming. In such circumstances, Platform Operators should proceed with caution, recognising that their reputation may also be affected by any misconduct on the part of the prospective client. At a minimum, before accepting instructions in these circumstances, Platform Operators should:

specify a reasonable time in its letter for the other platform operator to reply;
have no reason to believe that the letter has not been received;
issue at least one reminder that if a non-reply will be taken as tacit consent; and
ensure that senior management are aware of and agree to the arrangement.

(Key references: Paragraph 13.10 of the VATP Guidelines)

Last update: 1 Mar 2024

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