Hong Kong’s Securities and Futures Commission has launched a public consultation on refining the requirements for determining whether a person qualifies as a high net worth investor.

At present, under what are called Professional Investor Rules, there are four types of HNW professional investors; a trust corporation with total assets of not less than HK$40 million or its equivalent, an individual with a portfolio of not less than HK$8 million, a corporation or partnership with either a portfolio of not less than HK$8 million or total assets of not less than HK$40 million, or a corporation the sole business of which is to hold investments and which is wholly owned by an individual who has a portfolio of not less than HK$8 million.
 
The PIR set out specific methods, or evidential requirements, to ascertain the relevant assets or portfolio thresholds, including audited financial or custodian statements. However, in October 2009, when the SFC published a previous consultation paper, some market participants disclosed that, because of those specific evidential requirements, they have found it hard to treat clients as professional investors.
 
In response, the SFC is proposing that, while the minimum value of the relevant assets or portfolio will remain unchanged, firms will, in the future, be able to use any method to satisfy themselves that an investor meets the required asset or portfolio threshold at the relevant date.