Quarantine Exemptions and COVID-19 Vaccinations for the Hong Kong Financial and Insurance Industries: Who is Next?

Last week, the Hong Kong Monetary Authority (HKMA), Securities and Futures Commission (SFC) and Insurance Authority (IA) issued circulars setting out quarantine exemptions for certain individuals and encouraging vaccination of licensed individuals and other staff of regulated entities. The circulars raised a number of issues for employers including business continuity planning, employee health and safety, and personal data privacy considerations.

Exemption from Compulsory Quarantine Requirements

The 28 May 2021 circular issued by the SFC provides that fully vaccinated senior executives of licensed corporations (or overseas affiliates) may, upon meeting eligibility requirements, apply for an exemption from current compulsory quarantine arrangements when they return from overseas travel to Hong Kong (Exemption).

The scope of the Exemption is narrow and the requirements are onerous. Among other things:

The Exemption only applies to senior executives traveling primarily for the purpose of managing either the subject licensed corporation or the group entities for which they have responsibility;
As part of the application for the Exemption, a detailed itinerary of the proposed executive's entire trip (for a visiting executive) or throughout the entire medical surveillance period (for a returning executive) must be submitted to the SFC;
Depending on the COVID-19 risk situation of the executives' previous locations, they must meet various pre-departure, upon arrival and post-arrival testing requirements;
Executives are required to either self-isolate or be subjected to medical surveillance for a period ranging from 14 to 21 days depending on their previous locations. Executives who are subjected to self-isolation must stay at a designated quarantine hotel or an accommodation arranged by the sponsoring licensed corporation, except for certain permitted activities. Executives subjected to medical surveillance must limit their scope of activity in Hong Kong to certain permitted activities.
The sponsoring licensed corporations are required to ensure compliance with the guidelines for vehicles providing point-to-point transportation.

While the proposal to open up Hong Kong for business is welcomed, it will be interesting to see how many will actually make use of the Exemption in light of these strict requirements.

Vaccination for Customer-facing and Critical Function Staff

The three regulators issued circulars on 1 June 2021 which targeted employees performing customer-facing or critical functions.

HKMA

The most far reaching is the HKMA's circular dated 1 June 2021 which requires all the authorized institutions (AI) to:

strongly encourage staff performing "client-facing roles or critical support functions" to get vaccinated;
identify and draw up a list of designated staff (Designated Staff¹) who are expected to be inoculated, and produce to the HKMA by 14 June 2021 a breakdown by department or function of such Designated Staff;
request Designated Staff to get vaccinated as soon as possible; and
make arrangements for those who have not yet been vaccinated or are unfit for vaccination to undergo effective testing for COVID-19² every two weeks, with the first test to be completed by 30 June 2021.

While circulars from the HKMA are not mandatory in nature, non-compliance will reflect adversely on an AI and may be taken into account in determining whether an institution is fit to be an AI.

There are a number of issues an AI will need to consider in implementing the HKMA circular, including:

Does an employee have the right to challenge being identified as a Designated Staff? In our view, no. The circular is directed at AIs and it is for the AI to discharge their obligations under the circular.
Does the AI need to identify the particular employee or the position of the Designated Staff? In our view, the circular does not require the AI to identify the Designated Staff by name. According to some news reports, this is confirmed by the HKMA.
Can the AI direct Designated Staff to be vaccinated or tested? Given the HKMA requirements under the circular, in our view, it would be a lawful and reasonable direction for an AI to direct an employee who is a Designated Staff to be vaccinated or submit to testing for COVID-19. Any failure by the employee to comply with this direction can give rise to potential disciplinary action by the employer.
Personal Data Privacy: An AI will be collecting personal data of the Designated Staff in relation to vaccination and/or testing records, and so will need to ensure that it complies with the Personal Data (Privacy) Ordinance (Cap.486). Among other things, the AI should ensure it has an appropriate personal information collection statement.

Although the HKMA circular focusses on client-facing roles or critical support functions, the stated objective of the circular is to promote a high vaccination rate as part of the efforts towards the resumption of normal economic activities as well as facilitating business continuity planning. As such, in implementing the circular an AI should also consider employees other than Designated Staff and the message in the opening paragraph of the circular wherein the HKMA urges all AIs "to introduce additional effective measures to encourage all bank staff to get vaccinated".

SFC and IA

The SFC and IA issued circulars on 1 June 2021 to strongly encourage COVID-19 vaccination of staff.

Licensed corporations have been urged by the SFC to review their business continuity plans, identify functions which are critical to their business operations and client interest, and encourage staff performing such functions to get vaccinated; and to consider suitable arrangements for critical, non-vaccinated staff to undergo periodic testing.

In a similar vein, authorized insurers and responsible officers are encouraged by the IA to arrange for all staff and intermediaries who come into regular contact with customers, or who deliver critical functions, to be inoculated, while those who have not yet been vaccinated or are unfit for vaccination due to medication conditions should undergo periodic testing.

Who is Next?

Employers in other industries should take note of the circulars and what regulators are requesting of regulated entities in the financial and insurance industries in respect of COVID-19 vaccination and testing for those staff who are unvaccinated.

¹ Including but not limited to staff in branch operation, wealth management and commercial banking, who have
frequent face-to-face interactions with customers, as well as those responsible for critical IT, data centre, treasury
and settlement operations.

² Polymerase chain reaction-based nucleic acid testing using combined nasal and throat swabs is considered by
HKMA to be an effective test.