TC Adviser Guidelines

Q1 : With regard to paragraph 2.2.1(a) of the TC Adviser Guidelines¹, must the five years of corporate finance experience be acquired continuously and immediately preceding the date of application?

A: Yes, this requirement is to ensure that the applicant has sufficient and up-to-date regulatory knowledge and experience as a financial adviser.

Where there are career breaks during the five year period, the SFC would consider them on a case-by-case basis, taking into account the reasons, duration, overall experience in corporate finance transactions and whether the applicant may have gained other relevant experience during the break.

Q2 : Will an RO or EO be considered as having sufficient corporate finance experience as required under paragraph 2.2.1(a)(ii) if he or she has been licensed or registered for Type 6 regulated activity for a minimum of five years?

A: An applicant who merely holds a licence or registration for Type 6 regulated activity for more than five years but was not involved in corporate finance transactions during that time will unlikely be regarded as having sufficient corporate finance experience. In fact, the applicant should have participated in and gained experience from corporate finance transactions in order to fulfil the requirement under paragraph 2.2.1(a)(ii).

Q3 : Will overseas experience count towards the experience required under paragraph 2.2.1(a) of the TC Adviser Guidelines?

A: Generally speaking, overseas takeover deals advised by applicants may not be regulated by the Codes on Takeovers² and hence will not be counted towards the two completed TC Transactions³. That said, the SFC may take into account any substantive experience in overseas jurisdictions with a takeovers regime similar to that of Hong Kong. These applicants should expect their licences or registrations, if approved, to be subject to a “non-sole capacity”⁴ condition.

Q4 :
For ROs or EOs for Type 6 regulated activity and can advise on Codes on Takeovers-related matters in a “non-sole capacity”, do they need to pass HKSI⁵ Licensing Examination Paper 17 (i.e. the new examination under paragraph 3.1 of the TC Adviser Guidelines)?

A: Yes. Unless they are eligible for the exemption under paragraph 3.3 of the TC Adviser Guidelines, they are required to pass Paper 17.

Q5 : With regard to paragraph 2.2.3 of the TC Adviser Guidelines, will a transaction be considered as completed if it is lapsed after the issuance of the required offer document or circular?

A: Yes. The transaction will still be considered as a completed TC transaction as long as the required offer document or circular has been issued.

Q6 : With regard to paragraphs 3.1 and 3.3 of the TC Adviser Guidelines, will a completed TC Transaction that commenced more than three years prior to 1 January 2022 (i.e. the effective date of the TC Adviser Guidelines) be counted as an eligible transaction?

A: Yes. While there is no restriction on the commencement date of the transaction, individuals should have engaged in the TC Transaction work throughout the duration of the completed transaction.

Q7 : If a licensed representative or relevant individual is already engaging in a TC Transaction before 1 January 2022, what would be the first engagement date for the purpose of the examination requirement under paragraph 3.1 of the TC Adviser Guidelines?

A: If the TC Transaction commenced before the effective date of the TC Adviser Guidelines (i.e. before 1 January 2022), the “first engagement” date is 1 January 2022. Otherwise, the “first engagement” date refers to the first time that a licensed representative or relevant individual is engaged in a TC Transaction as a member of a Transaction Team⁶.

¹ “TC Adviser Guidelines” refers to the “Additional competence requirements for corporations and individuals which undertake activities in connection with matters regulated by the Codes on Takeovers and Mergers and Share Buy-backs”, which are Appendix B to the Guidelines on Competence.

² “Codes on Takeovers” refers to the Codes on Takeovers and Mergers and Share Buy-backs

³ “TC Transaction” means a transaction falling within the ambit of the Codes on Takeovers.

⁴ “Non-sole capacity” means the RO or EO is subject to a licensing condition that he or she must, in the capacity as an adviser to a client on matters or transactions falling within the ambit of the Codes on Takeovers, act together with another adviser (to the client) not subject to the same condition.

⁵ “HKSI” means Hong Kong Securities and Investment Institute

⁶ “Transaction Team” means the staff assigned to advise on a TC Transaction by a corporation that is permitted under its licence or registration to advise on matters or transactions falling within the ambit of the Codes on Takeovers.

Last update: 26 Jan 2022