HK securities watchdog cautions on bonds

Hong Kong's Securities and Futures Commission reminds brokers, banks and fund managers of their obligations when selling bonds.

Hong Kong’s securities watchdog last week issued a circular warning of the risks that fixed-income products carry, and their obligations to investors while marketing such products.

The Securities and Futures Commission SFC sent the circular to its licensed corporations and registered institutions, which includes brokers, fund managers and banks. While it does not unearth anything particularly earth-shattering, according to one fund manager, it serves a “timely reminder”.

“In the current low interest rate environment, investors strive to achieve higher yield,” said the SFC in the circular. “Within this context, it is noted that fixed-income products being marketed and sold to clients include high-yield corporate bonds which are...

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