“A no-action letter is a letter written by the staff members of a government agency, requested by an entity subject to regulation by that agency, indicating that the staff will not recommend that the agency take legal action against the entity should the entity engage in a course of action proposed by the entity through its request for a no-action letter” -Wikipedia
Prior to starting a new business, financial firms can request an official opinion to the financial authorities regarding legal matters whether the new business infringes relating laws and regulations. The financial regulators issue a no-action letter to the financial company to confirm legitimacy of the new business. If confirmed legal by the financial authorities, no sanctions or regulatory actions will be taken against such businesses.
In a bid to encourage financial institutions to actively pioneer into new markets and launch new businesses, the FSC will facilitate the no-action letter system.
Moreover, the FSC will give feedback on financial companies’ inquiries about whether their actions violate any guidelines or standards specified in administrative guidances, attention notices, recommendations, verbal guidelines, official and unofficial statements mentioned by the financial authorities. Currently, no-action letters only cover matters relating to legislative acts and regulations.