As the new investor protection measures were launched in phases, we scheduled our IE programmes under the "Know how the new rules protect you" theme accordingly. Over the past year or so, we educated investors on key protection measures that have already taken effect. Under the new rules, product issuers must provide key facts statements (KFS) to explain key features and risks with certain investment products; investors must be given a post-sale "cooling-off" or "unwind" right to change their mind about investing in certain unlisted structured products; and intermediaries are no longer allowed to use gifts, other than a discount of fees or charges, to promote a specific product.

An informercial explaining the difference between bonds and bond funds

In this past spring, we also started a series of mass-media programmes to promote the requirements for intermediaries that will take effect this year, including investor characterisation and disclosure of sales-related information and benefits:

• ‘Ace it!’: A series of one-minute mini dramas with a cast of well-known artistes began airing on TVB Jade in March 2011 to highlight key points of the sales process for investment products. The 10-episode series began with anexplanation of the SFC’s regulatory regime, then proceeded to introduce both recently launched and upcoming measures for additional investor protection.
• ‘InvestEd Arena’: This three-part quiz on financial knowledge was co-produced by the Hong Kong Economic Times (HKET) and Cable TV. From January to March 2011, contestants were tested on their knowledge of the new investor protection measures and various topics related to financial investment. The first round of the quiz published in HKET attracted a total of 599 entries. Semi-final rounds and the grand finale were aired on Cable TV to let a wider public audience find out about the new investor protection measures in a more interesting way.
• Infomercials and videos on major broadcasts: Since September 2010, we have been airing a total of 10 20-second infomercials and two one-minute videos explaining the new measures on major TV stations, namely TVB Jade, Cable TV, Now TV, as well as bus and trains.
• ‘Info-wise by Dr Wise‘: Our fictitious columnist Dr Wise was dispensing financial advice on Metro Radio from April to June 2010. Besides topical product knowledge, the 45-second messages explained how investor rights were enhanced under the new rules.
• Brochure and leaflet: We also published in plain language a booklet entitled "How to Read Product Key Facts Statements" and a leaflet to explain the mechanism of the post-sale cooling off arrangement. Flowcharts were used to help illustrate the salient points of the new measures. The publications were distributed to the general public through multiple channels including intermediaries, newspaper insertions and public libraries.

Another of our priorities is to raise public awareness of the risks of popular investment products. Responding to market changes, we continued to address topical investment issues and to clarify common misunderstandings through our thematic media programmes and regular IE channels, including our InvestEd website, newsletters and weekly column in Headline Daily.

In March 2011, we launched "SFC Investor Education Advice, "a new series of IE infomercials on TVB iNews, Cable TV, Now TV, as well as on buses and trains to explain popular investment products such as renminbi products and synthetic exchange-traded funds (ETFs). The programme also clarified common misunderstanding in the price quoting mechanism of derivative warrants and the relationship between a derivative warrant’s implied volatility and its price.

In view of the growing appetite in high-yield investments, we published a brochure on equity-linked investments (ELIs) in March 2011, which explained features such as airbags, daily accrual and early call. It was drafted in plain language and featured scenario analysis to help investors understand downside risks. Over 5,000 copies were distributed through intermediaries to the investing public. We also continued to run the TV commercial (TVC) "Ask Me," featuring a catchy 1970s Canton-pop song with rewritten lyrics to promulgate a questioning attitude towards making investment decisions. Starting February 2011, the TVC has been aired on major business channels including TVB Jade, TVB-HD Jade, ATV Home, Now TV Business Channel and Cable TV Finance Info Channel.

“Understanding IPO Prospectus” one-minuters

Hong Kong was the largest initial public offering (IPO) centre in the world in 2010. To help individuals invest in IPO shares wisely, we produced "Understanding IPO Prospectus," a series of five one-minute videos in March 2011. Hosted by a famous stock commentator, the programme aimed to show investors how to make use of an IPO prospectus to make informed investment decisions. The videos were aired on various major business channels.

Besides, to better prepare investors for a new class of products – listed renminbi securities, we published in March 2011 flowcharts in free newspapers and a business daily explaining key procedures to take before one can invest in a renminbi IPO. In addition, we posted a number of frequently asked questions on our InvestEd website.

In support of the Government’s policy to further develop the local bond market, we organised IE programmes to raise public awareness of investing in bonds. Besides giving investors an overview of offerings in the retail bond market, our IE programmes also articulated the risks and features of different bond products, including renminbi bonds and bond funds, as follows:

• ‘Invest@Bonds’, a series of 10 one-minute radio segments, were broadcast on Commercial Radio from February to March 2011. In dialogue format, the programme explained bonds as part of an investment portfolio and the trading mechanism and fees involved. It also pointed out to investors the credit risk, liquidity risk and exchange risk specific to bond investing, and clarified the difference between bonds and bond funds and between bonds and shares issued by a listed company.
• ‘Smart on Bonds’ was a series of print and video interviews featuring advice from industry professionals on bond investing. The interviews were published in Ming Pao Daily News, both in print and on line, starting March 2011. The March episode discussed renminbi bond, its trading and associated risks.
• Financial professionals interview series: A series of interviews featuring advice provided by industry professionals and academic experts were conducted on Now TV and then published in the Hong Kong Economic Journal. In January and February 2011, seasoned market professionals discussed various aspects of bond investing, including the secondary bond market, liquidity risk, interest-rate movements as a risk and credit risk. The guests also explained bonds in the context of life-cycle investing and clarified the difference between bonds and other investment products, such as stocks and bond funds.

  At some interviews, industry professionals and academics also talked about investment issues surrounding popular fund products, including key features and currency risks of renminbi funds, counterparty risks specific to synthetic ETFs, the fees and charges involved in fund investing, and the SFC’s disclosure requirement for performance fees.

Intermediaries have an important role to play in our efforts to explain new measures guiding the selling process of investment products. The same goes for experts in academic circles. Therefore, we engaged them to help explain the new rules and to dispense IE materials.

Highlighted below are two of the IE initiatives in which industry participants and academic experts made substantial contributions:

• ‘Investor Day’: This annual event we co-organised with The Open University of Hong Kong was held in January 2011. Hosted by academics and market professionals, the full-day education seminars attracted over 500 attendees from the public. Topics featured this year included the economic and market outlook for Hong Kong and China, currency wars and key features and risks of popular investment products.

  

  Investor Day 2011

• Investor seminar series: Jointly organised by the SFC and the Hong Kong Society of Financial Analysts, the fourth such full-day event attracted more than 330 participants. At seminars throughout the day, financial analysts shared their views with the audience on a number of issues, eg, market sector analysis, clean energy stocks and ETFs. A presentation on ETFs was posted subsequently on our InvestEd website.

To reach out more efficiently and effectively to investors, we constantly reviewed and adjusted our media strategy and expanded our communications channels.

More encompassing e-newsletter

In September 2010, we launched InvestEd Intelligence as a comprehensive bi-monthly e-newsletter. Designed to beef up the former Monthly Focus, a digest, the e-newsletter carries articles covering various areas – namely, current market issues, investment products, updates of the SFC’s investor protection work, common misconceptions, and the well-known Dr Wise column. Every new issue was advertised in a popular search site, generating a total of over 30,000 page views. To encourage interaction, prizes were given out to the first five readers who answered quizzes correctly in every issue.

Often, InvestEd Intelligence came in handy as a channel to communicate messages of current interest. In the March 2011 issue, for instance, the e-newsletter told investors that they would have to get prepared if they wished to trade listed renminbi securities, which were yet to be listed in Hong Kong. Another issue helped investors tell the difference between traditional and synthetic ETFs, not just in terms of the risk exposure of the synthetic class, but also from the markings being introduced to identify them.

Outreach activities

We continued to organise investor outreach programmes in classroom or workshop settings to deliver timely IE message and to inculcate a proper investment attitude. In addition to off-premises seminars, we also arranged for secondary school students to visit the SFC to get a better understanding of our regulatory role and IE initiatives. In the past 12 months, we organised over 80 seminars and visits, involving nearly 10,000 members of the public.

In terms of the targets of our outreach seminars, we added the Trade Development Council, Social Welfare Department and the Police Force to the community groups, university students and secondary school students that we have been serving. Earlier this year, we also leveraged a Government-held event to disseminate IE message. In "Golden Age Delight," an event organised by the Elderly Commission and the Labour and Welfare Bureau to prepare someone for retirement, we operated a booth to promote prudent wealth management planning, distributed IE publications and explained the new investor protection safeguards.

Upgrading IE portal

Our IE website had a face lift in the spring of 2011. To help investors access the most useful and popular IE resources, the homepage of the IE website underwent an overhaul, thus improving investors’ surfing experience. The revamp also catered for addition of contents at a later stage. Furthermore, the "SFC InvestEd" app was launched in March 2011, enabling iPhone and iPod Touch users to read our Dr Wise column, watch short videos, and keep track of the IE activities calendar.

We continued to add learning tools and to update the existing contents to meet changing investor needs.

• A total of 87 articles and videos were added to the IE portal in the past 12 months, including articles explaining KFS, ETFs, ELIs, Hong Kong depositary receipts, renminbi-denominated products and rights issues, as well as flash videos featuring risk management, corporate actions and structured products.
• To draw traffic to the website – in particular the newly added InvestEd Intelligence e-newsletter series, new IE articles and multi-media learning tools – the IE portal carried more than 10 online quizzes and attracted over 1,000 entries.

We continued to support the plan of the Financial Services and Treasury Bureau (FSTB) to establish an Investor Education Council. At the end of the three-month consultation in May 2010, we had close discussions with FSTB regarding comments received from the public. In December 2010, FSTB published the consultation conclusions confirming its decision to set up the IEC as an entity wholly owned and fully funded by the SFC.

Towards that end, the SFC will provide input for drafting legislative amendments to the Securities and Futures Ordinance in this legislative year so that the SFC’s IE remit can be broadened to cover the entire financial services sector.