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Hong Kong's Securities And Futures Commission Issues Quarterly Report

Date 07/12/2018

The Securities and Futures Commission (SFC) today published its Quarterly Report summarising key developments from July to September 2018.

During the quarter, the SFC released consultation conclusions on proposed amendments to the Codes on Takeovers and Mergers and Share Buy-backs, which came into effect on 13 July. It also launched consultations on proposed guidelines for securities margin financing activities to enhance brokers’ risk management and on proposals to amend the Guideline on Anti-Money Laundering and Counter-Terrorist Financing to align with the latest international standards.

In a July circular, the SFC provided guidance for using electronic signatures to onboard individual clients online. It also issued a circular in August to caution that anyone involved in providing securities margin financing in the guise of investments may be liable to prosecution.

The open-ended fund companies regime which introduces a new corporate fund structure in addition to the current unit trust form took effect in July, and the investor identification regime for northbound trading under Mainland-Hong Kong Stock Connect was introduced in September.

The SFC published a strategic framework in September which set out its agenda to contribute to Hong Kong’s green finance development as well as to connect green finance flows between the Mainland and the rest of the world.

In enforcement, five licensed corporations and five representatives were disciplined during the quarter, resulting in total fines of $40.4 million.

Key figures from the report include the following:

  • The number of licensees and registrants reached 46,063, up 5% year-on-year, and the number of licensed corporations increased 9% to 2,844. Both were record highs.
  • A total of 81 on-site inspections of licensed corporations were conducted to review their compliance with regulatory requirements.
  • The SFC reviewed 118 new listing applications, up 7% from the previous quarter.

The report is available on the SFC website.