FAQ - Relevant Practitioners

Relevant Practitioners

1.      To whom is the ECF applied to? 

The ECF applies to PWM industry practitioners (Relevant Practitioners) engaged by PWM institutions in customer-facing roles making personalized or customized solicitations or recommendations to customers in the provision of securities dealing and advisory service and/or portfolio management service.


For the purpose of the ECF, PWM institutions refer to the following:

(a)   Private banks or authorized institutions with dedicated unit(s) that maintain a personalized relationship with private banking customers*, and provide personalized banking services, dealing, advisory and/or portfolio management services to these customers; and

(b) SFC-licensed corporations with dedicated units(s) that maintain a personalized relationship with private banking customers*, and provide dealing, advisory, and/or asset / portfolio management services to clients who fall under the definition of private banking customers*.


* A “private banking customer” refers to a customer who maintains a personalized relationship with the PWM institution and receives personalized banking services, dealing, advisory or asset / portfolio management services from the PWM institution, and has:

a) at least USD3 million or its equivalent in any other currency in investable assets; or

b) at least USD1 million or its equivalent in any other currency in investable assets under the PWM institution’s management.

Investable assets comprise securities, deposits and certificates of deposits.  The amount may be calculated on a relationship basis covering (i) individual accounts; (ii) joint accounts with associates; and (iii) personal investment companies wholly-owned by the individual or jointly owned with associates.  Associate means the spouse or any child of that individual.

 

2.      How does one determine whether the individual is considered as a Relevant Practitioner for the purpose of ECF?


Relevant Practitioners refer to PWM industry practitioners engaged by PWM institutions who are in customer-facing roles making personalized or customized solicitations or recommendations to customers in provision of securities dealing and advisory service and/or portfolio management service. 

Customer-facing functions refers to those roles such as Relationship Manager or Investment Advisor who have direct access to clients and provide customized solicitations or recommendations directly to clients in the provision of securities dealing and advisory services and/or portfolio management services. 

For work experience at a non-PWMA member institution to be considered as PWM client-facing function for the purpose of ECF, substantiation has to be provided to demonstrate that the institution (or a unit of the institution) is or was dedicated to serve private banking customers during the period of experience.


PWM institutions can make reference to the “Definition of Relevant Practitioners” for examples of functional titles, and key roles and required competence in determining whether a customer-facing staff is a Relevant Practitioner for the purposes of ECF.


If the staff performs substantially all of the roles described in the “Definition of Relevant Practitioners”, he or she may classified as a Relevant Practitioner.


An individual with a functional title such as Relationship Manager and Investment Advisor is likely to be classified as a Relevant Practitioner if that individual in practice performs substantially all of the prescribed roles listed in the “Definition of Relevant Practitioners”. An individual that holds other functional titles such as Dealer or Product Specialist would not typically be classified as a Relevant Practitioner if that individual does not perform substantially all of the prescribed roles including the provision of investment ideas or recommendations to customers directly.


An individual who is a PWM Assistant, including but not limited to those with a functional title such as Assistant to Relationship Manager, is not considered a Relevant Practitioner for the purpose of ECF and therefore out of scope for grandfathering or CPWP certification.  


3.      Will the ECF apply to individuals who work on a temporary basis in Hong Kong?

The ECF is to be adopted voluntarily by PWM industry practitioners. It will be up to the PWM institutions to decide whether it is necessary for individuals who work on a temporary basis in Hong Kong to meet the ECF standards. In general it may not be practical to require individuals to adopt the ECF standard if they work on a one-off basis for only several months in Hong Kong.


4.      Are wealth advisors / trust specialists covered under the ECF?

They are considered product specialists selling trust structures / solutions to clients instead of investment products; hence, they are not covered by the ECF.