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The Securities and Futures Commission (SFC) today published its Quarterly Report summarising key developments from October to December 2017.
During the quarter, the SFC launched a consultation on proposals to refine the over-the-counter derivatives regime and strengthen conduct risk management, as well as another consultation to update the regulatory regime for funds and address emerging risks.
Other highlights of the quarter included the release of conclusions to a consultation to enhance asset management regulation and point-of-sale transparency, including the disclosure of non-quantifiable monetary benefits.
The Manager-In-Charge (MIC) regime was fully implemented in October following a six-month transition period, when about 10,000 individuals were appointed by licensed corporations as MICs responsible for managing important functions. The inaugural issue of the SFC Compliance Bulletin: Intermediaries, released in December, reminded the industry about the importance of managing conflicts of interest in selling practices and asset management.
Major enforcement cases in the quarter included the decision of the Securities and Futures Appeal Tribunal to uphold the SFC’s disciplinary action against a private bank which was fined a record $400 million for systemic failures in the sale of investment products. In an updated guidance note issued in December, the SFC highlighted the benefits of cooperation in its investigation and enforcement proceedings.
To facilitate market surveillance, the SFC and the China Securities Regulatory Commission entered into an agreement in November on the implementation of investor identification for Northbound trading under Stock Connect.
Key figures in the quarter:
- The number of licensees and registrants reached 44,169, up 3.5% year-on-year, and the number of licensed corporations increased 10.3% to 2,660. Both were record highs.
- A total of 71 risk-based on-site inspections of licensed corporations were conducted to review their compliance with regulatory requirements.
- The SFC reviewed 40 new listing applications, up 5.3% from last year.
- The SFC made 1,644 requests for trading and account records from intermediaries following its surveillance of untoward price and turnover movements.
The report is available on the SFC website.
