Hong Kong Monetary Authority: The second phase of mandatory background checks for the banking industry will be implemented by the end of September, extending to licensed employees in securities and insurance sectors.

On July 24, Arthur YUEN, deputy chief executive of the Hong Kong Monetary Authority, announced that the second phase of the "mandatory background check program" for the banking industry will be implemented on September 30. The scope will be further expanded to include approximately 50,000 employees holding licenses or already registered to engage in regulated activities in securities, insurance, or Trillions of MPF, accounting for more than half of the overall banking industry employees. In his column "Thoughts on Settlement" at the Authority, Arthur YUEN wrote that banks are preparing for the implementation of the second phase, including communicating with the employees and stakeholders who will be covered, updating internal recruitment processes, providing employee training, to ensure a smooth and orderly implementation of the second phase of the program. For the employees covered by the program, the implementation of the program will enable banks to conduct background checks more effectively, make hiring decisions with more confidence, and enhance the confidence of customers and the overall society in the industry. He mentioned that the Authority will discuss with other regulatory bodies the expansion of the program to other financial sectors, in order to address the phenomenon of practitioners with past misconduct behaviors moving within the industry. He hopes that the implementation and expansion of the program will eliminate the "bad apples" from the system, promote the sustainable development of the Hong Kong financial industry, and strengthen public confidence in industry ethics and fair treatment of customers. The Hong Kong Monetary Authority released the operational framework of the "mandatory background check program" in 2021. Under the program, all banks will share information through an agreement mechanism and obtain relevant background information of potential employees for the past 7 years to make more informed hiring decisions. The first phase of the program was officially implemented in stages in May 2023, covering approximately 3,500 senior banking positions. Banks have conducted about 700 background checks through the program so far, with only 9 cases involving negative information, demonstrating the program's ability to identify potential "bad apples" and prevent banking employees from hiding their improper behavior records when changing jobs.