The Securities and Futures Commission (SFC) today published its latest Quarterly Report which summarises key developments from July to September 2021.
As part of efforts to support the development of green finance, the SFC concluded a consultation on amendments to the Fund Manager Code of Conduct to require fund managers to take climate-related risks into consideration in their investment and risk management processes and provide investors with appropriate disclosures (Note 1). In addition, the Hong Kong Green and Sustainable Finance Cross-Agency Steering Group, co-chaired by the SFC and the Hong Kong Monetary Authority, announced the next steps to advance its collaborative strategy to help transition the financial ecosystem towards carbon neutrality.
Other highlights of the quarter included the release of consultation conclusions on an investor identification regime and an over-the-counter securities transactions reporting regime for the Hong Kong securities market. The SFC also concluded a consultation on proposed amendments to the SFC’s anti-money laundering and counter-financing of terrorism guidelines to align them with the Financial Action Task Force’s standards and provide additional guidance for the implementation of risk-based measures.
The SFC conducted separate joint operations with the Hong Kong Police Force and the Independent Commission Against Corruption (ICAC) to combat misconduct involving listed companies. The Police arrested two persons for suspected conspiracy to defraud, theft and money-laundering and the ICAC arrested six persons for suspected corruption offences.
The SFC issued a statement during the quarter to warn investors of trading stock tokens offered on unregulated platforms (Note 2). It also introduced a new feature on its website to alert the public about unauthorised investment arrangements suspected to be collective investment schemes (CIS) (Note 3).
Key figures for the quarter include:
- The number of licensees and registrants totalled 48,364, of which 3,180 were licensed corporations.
- The SFC vetted 78 new listing applications, including three from companies with weighted voting rights structures and 15 from pre-profit biotech companies.
- The SFC authorised 31 unit trusts and mutual funds (including 20 Hong Kong-domiciled funds), four mandatory provident fund pooled investment funds and 73 unlisted structured investment products for public offering in Hong Kong. It registered 12 new open-ended fund companies.
- 66 in-depth inspections of licensed corporations were conducted to review their compliance with regulatory requirements.
- The SFC made 2,733 requests for trading and account records triggered by untoward price and turnover movements.
- It issued section 179 directions (Note 4) to gather additional information in six cases and wrote to detail its concerns in one case as part of its review of corporate disclosures.
- Two licensed corporations and five individuals were disciplined, resulting in total fines of $11.95 million.
The report is available on the SFC website.
Notes:
- The requirements will be implemented in phases starting from 20 August 2022.
- See the 16 July 2021 Warning statement on unregulated virtual asset platforms.
- CIS offered to the Hong Kong public are subject to SFC authorisation under the Securities and Futures Ordinance, unless exempted. In general, CIS must be sold by an intermediary licensed or registered with the SFC. Unauthorised CIS may generally be sold to professional investors only.
- 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.
