The Securities and Futures Commission (the "SFC”) mandated the incorporation of the Suitability Requirement into client agreements as a contractual term. Coupled with the requirement not to include clauses in client agreements that are inconsistent with the Code of Conduct or which mis-describe the actual services provided to clients, the SFC intends the new requirements to give aggrieved investors a contractual right to claim damages and to preclude use of disclaimers. Whilst the new requirements will come into effect in June 2017, the SFC expects all financial intermediaries subject to the requirements to start reviewing and revising their client agreements immediately to ensure timely completion of the exercise, and take necessary steps to revise or re-execute their client agreements with existing clients.
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