tiktok���˰�

A Due Diligence Policy outlines the steps and standards an organization follows when evaluating potential business deals, investments, or partnerships. In Hong Kong's financial hub, these policies help companies comply with key regulations like the Securities and Futures Ordinance and Anti-Money Laundering laws while managing their risk exposure.

The policy typically covers essential checks on financial health, legal standing, ownership structures, and reputation of target companies or business partners. It guides staff through required verification processes, sets clear responsibilities, and establishes documentation standards - helping organizations avoid costly mistakes and maintain compliance with Hong Kong's strict regulatory framework.

Companies need a Due Diligence Policy before entering any significant business relationships in Hong Kong's fast-moving market. This is especially crucial when planning mergers, acquisitions, joint ventures, or bringing on major suppliers and business partners. It's an essential safeguard for investments exceeding HK$10 million or deals involving regulated industries.

The policy becomes vital during pre-deal negotiations, regulatory filings with the SFC, and when expanding into new markets or sectors. Having it ready before starting these processes helps avoid rushed decisions, ensures consistent evaluation standards, and protects against regulatory penalties under Hong Kong's strict compliance regime.

• Basic Corporate Due Diligence Policy: Covers standard business partner and investment checks, focusing on financial health and compliance records
• Enhanced Financial Services Policy: Includes additional scrutiny for regulated entities under Hong Kong's SFC requirements
• M&A Due Diligence Policy: Detailed framework specifically for mergers and acquisitions, with comprehensive asset and liability evaluation
• Real Estate Investment Policy: Specialized for property transactions, including land rights and development restrictions unique to Hong Kong
• Supply Chain Due Diligence Policy: Focuses on vendor assessment, including ESG criteria and sanctions compliance checks

• Corporate Legal Teams: Draft and maintain Due Diligence Policies, ensuring they align with Hong Kong's regulatory requirements and company risk appetite
• Board of Directors: Review and approve policies, set risk tolerance levels, and oversee implementation across the organization
• Compliance Officers: Execute daily checks, maintain documentation, and ensure staff follow policy guidelines during business transactions
• Investment Teams: Apply the policy standards when evaluating new opportunities or partnerships in Hong Kong's market
• External Auditors: Review policy implementation and provide assurance on compliance with SFC regulations and industry standards

• Industry Analysis: Map your organization's specific risks and regulatory obligations under Hong Kong law, including SFC requirements
• Current Practices: Document existing due diligence procedures and identify gaps in your evaluation process
• Risk Framework: Define clear risk categories and assessment criteria aligned with your company's risk appetite
• Process Mapping: Outline step-by-step evaluation procedures, approval chains, and documentation requirements
• Technology Assessment: Review available tools for conducting checks and maintaining records
• Template Generation: Use our platform to create a legally sound policy that incorporates all mandatory elements and Hong Kong compliance requirements

• Policy Scope: Clear definition of transactions requiring due diligence and applicable thresholds under Hong Kong law
• Risk Assessment Framework: Detailed evaluation criteria aligned with SFC guidelines and Anti-Money Laundering requirements
• Verification Procedures: Specific steps for identity checks, financial reviews, and compliance screening
• Documentation Standards: Required records, retention periods, and data handling protocols
• Roles and Responsibilities: Clear assignment of duties to compliance officers, management, and staff
• Review Mechanisms: Procedures for policy updates and periodic assessments
• Compliance Declaration: Confirmation of adherence to Hong Kong regulatory requirements

A Due Diligence Policy differs significantly from a Due Diligence Checklist in both scope and function. While they work together, each serves a distinct purpose in Hong Kong's regulatory framework.

• Strategic vs. Tactical: The Policy sets overarching principles and requirements for due diligence processes, while the Checklist provides specific items to verify during actual reviews
• Permanence: Policies remain relatively stable and require board approval for changes, whereas Checklists can be modified to address specific transaction types or risk factors
• Audience Focus: Policies guide senior management and compliance teams on program oversight, while Checklists serve as practical tools for staff conducting investigations
• Legal Standing: The Policy demonstrates regulatory compliance with SFC requirements, while Checklists serve as evidence that proper procedures were followed