Member Article

The Securities and Futures Commission (SFC) issued a circular on 21 December 2004 to deemed licensed corporations. Deemed licensed corporations which do not intend to migrate to the new regime under the SFO are expected to wind down their businesses and make arrangements for the return and transfer of client assets before their licences expire on 31 March 2005. The circular also sets out guidance on the treatment of unclaimed client assets. Where clients cannot be contacted, deemed licensees are expected to post notices in newspapers regarding their business cessation plan (setting out the timeframe and the actions expected of their clients). Deemed licensees owe fiduciary duties to their former clients in respect of any unclaimed client assets even after the expiry of their licences. In addition, deemed licensees who had not lodged a migration application by 31 January 2005 are required to submit a report regarding their client assets position on a bi-weekly basis until their licences expire or are revoked.