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The Securities and Futures Commission (SFC) today published its Quarterly Report summarising key developments from October to December 2018.
During the quarter, the SFC released conclusions to a consultation on additional protective measures for the sale of complex financial products in an offline environment as well as to a consultation on proposals to enhance the over-the-counter derivatives regime and address conduct risks posed by dealings with connected persons.
The revised anti-money laundering and counter-financing of terrorism guideline came into effect on 1 November following a public consultation. Amendments to the Code on Unit Trusts and Mutual Funds took effect on 1 January 2019 following the conclusion of a consultation to update the regulatory regime for SFC-authorised funds.
An October circular highlighted the increasing use of "nominees" and "warehousing" arrangements which may amount to market or corporate misconduct and reminded firms to report suspicious transactions to the SFC. In a November statement, the SFC introduced a new approach which aims to bring virtual asset portfolio managers and fund distributors under its regulatory net and also set out a conceptual framework for the potential regulation of virtual asset trading platforms.
In December, the SFC signed a memorandum of understanding with the China Securities Regulatory Commission on cooperation in the supervision of financial institutions operating on a cross-border basis as well as a separate agreement on investor identification arrangements under Mainland-Hong Kong Stock Connect.
The SFC also signed mutual recognition of funds agreements with the UK Financial Conduct Authority and the Luxembourg Commission de Surveillance du Secteur Financier during the quarter.
In enforcement, two licensed corporations and four representatives were disciplined during the quarter, resulting in total fines of $2.3 million.
Key figures from the report include the following:
- The number of licensees and registrants reached 46,371, up 5% year-on-year, and the number of licensed corporations increased 9% to 2,905.
- The SFC conducted 72 on-site inspections of licensed corporations to review their compliance with regulatory requirements.
- The SFC has authorised a total of 2,780 collective investment schemes as of 31 December.
- The SFC reviewed 68 new listing applications, up 70% from the same quarter last year.
The report is available on the SFC website.
