Aggregated News From Investment Management Regulators

SFC issues quarterly report

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The Securities and Futures Commission (SFC) today published its latest Quarterly Report which summarises key developments from April to June 2020.

To ensure that Hong Kong’s international financial markets function efficiently during the COVID-19 outbreak, the SFC stepped up its supervisory work and stress tests and allowed a measure of flexibility for some regulatory requirements. It also issued a joint statement with The Stock Exchange of Hong Kong Limited (SEHK) to provide guidance to listed companies on holding general meetings for shareholders when social distancing requirements are in effect.

During the quarter, the SFC consulted on changes to the Code on Real Estate Investment Trusts (REITs) to give Hong Kong REITs more flexibility in making investments. It concluded consultations on a proposed operational model for a paperless securities market (Note 1) and on enhancements to the over-the-counter derivatives licensing regime. Reports on the SFC’s annual review of the performance of SEHK and its expected regulatory standards for brokers offering leveraged foreign exchange trading were also published during the quarter.

Hong Kong’s Green and Sustainable Finance Cross-Agency Steering Group, co-chaired by the SFC and the Hong Kong Monetary Authority, was established in May to coordinate the management of climate and environmental risks to the financial sector.

Key figures for the quarter include:

  • The number of licensees and registrants totalled 46,824, of which 3,109 were licensed corporations.
  • The SFC conducted 74 on-site inspections of licensed corporations to review their compliance with regulatory requirements.  
  • The SFC authorised 41 unit trusts and mutual funds, including 28 funds domiciled in Hong Kong, and 24 unlisted structured investment products for public offering.
  • Eighty-two new listing applications were vetted, including three from pre-profit biotech companies.
  • The SFC issued section 179 directions (Note 2) to gather additional information in 18 cases and wrote to detail its concerns in one transaction as part of its review of corporate disclosures.  
  • Eight licensed corporations and two individuals were disciplined, resulting in total fines of $67.5 million.
  • The SFC obtained disqualification orders in the Court of First Instance against eight individuals for breaches of their duties as listed company directors.
  • It made 2,366 requests for trading and account records triggered by untoward price and turnover movements.

The report is available on the SFC website.

End

Notes:

  1. Jointly with Hong Kong Exchanges and Clearing Limited and the Federation of Share Registrars Limited.
  2. Section 179 of the Securities and Futures Ordinance gives the SFC the power to compel the production of records and documents from persons related to a listed company.

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Regulator Information

Abbreviation: SFC
Jurisdiction: Hong Kong

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