Reminder for Hong Kong MSO licensed/new applicants

To: Hong Kong Money Service Operator License (MSO) holders/new applicants

Since the customs updated the license plate guidelines again in February 2020, the industry has clearly felt the tightening of regulatory agencies in the review of new license applications, and customers who already hold licenses are also facing a new round of inspections and cleanups. After summarizing and organizing the information collected and feedback recently, we provide the following warm reminders to customers at different stages of the current license plate:

1. Customers who are preparing to submit their license application or have already submitted their license application——

Please complete the modification and adjustment of the business plan and anti money laundering policy as soon as possible. We have provided modification suggestions according to the new customs guidelines;

Please be careful not to use the address provided by the service provider (including business center, shared office, secretary company/accountant/lawyer building, etc.) for local office leasing. The lease agreement must be stamped with a stamp and a business registration certificate (BR) for that address must be provided;

We will provide different suggestions for the selection and nationality requirements of the compliance director, as well as the demonstration requirements of relevant transaction systems, based on the business model and organizational structure of different applying clients. Please implement them.

2. For licensed customers——

The customs is about to launch an outreach plan, which aims to visit all licensed money service operators to gain a deeper understanding of their operations and overview, and improve their compliance level. During this period, the customs director will require the licensee to provide a business plan and anti money laundering policy in accordance with the latest requirements of the MSO license guidelines. Licensed customers are requested to review whether these two documents have been adjusted accordingly to meet the requirements of regulatory agencies. If you need our assistance, please contact colleagues as soon as possible for processing;

Please check as soon as possible whether the local office meets the requirements of customs, and do not use the address service provided by the service provider again;

The establishment of the position of Compliance Director must comply with the requirements of the new customs guidelines, and at the same time, review the internal compliance situation of the company and the implementation of anti money laundering policies. Transaction records and related files must be stored at the address declared to customs for inspection at any time and retained for 5 years;

Check the situation of transaction declaration and declaration details to avoid being punished by customs due to omission or failure to declare on time;

Licensed companies must ensure normal annual inspections and tax reporting;

3. For customers who have received a notice of revocation or intended revocation of their license from customs——

After obtaining the license, if a licensee is unable to carry out business or has no actual business due to various reasons, or fails to regularly declare transactions to the customs, they will be judged by the customs as having not provided the financial services declared by your company during the license application period for a long time. Since November 2019, the customs has increased the cleaning up of such licensed institutions and issued a "Notice of Intention to Revoke or Suspend the Financial Services Operator License", requiring written submissions within a specified period. Many licensed persons have been directly revoked by customs due to insufficient reasons after submitting written statements, or failure to submit written statements before the deadline;

For customers who have received a notice from the customs regarding the revocation of their license, if you need our assistance in providing consultation services, please contact our colleagues as soon as possible to handle it, and make sure to submit a reasonable and substantiated written statement before the deadline.

Once again, we would like to remind you that the regulatory and approval efforts for MSO licenses have undergone significant adjustments compared to the past. The cost of holding licenses and operational requirements have also increased significantly. Licensed customers and colleagues responsible for specific businesses must pay attention to this.