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The Securities and Futures Commission (SFC) today began a one-month consultation on proposed amendments to the Securities and Futures Ordinance (SFO) relating to supervisory assistance to overseas regulators.
Subject to a number of conditions and safeguards, the proposed amendments (Note 1) would enable the SFC to provide a narrow form of supervisory assistance to overseas regulators upon request by means of making enquiries and obtaining certain records and documents (Note 2) from a licensed corporation or its related corporations.
The proposed changes would allow more effective and comprehensive supervision of regulated corporations which operate in multiple jurisdictions. In addition, the proposed amendments will enable, in certain cases, Hong Kong regulated entities to have greater access to overseas markets.
"The proposed amendments are incremental to the SFC’s existing information gathering powers," said Mr Ashley Alder, the SFC’s Chief Executive Officer. "The proposals benefit the financial community by providing more opportunities for them to access overseas markets as well as enabling Hong Kong to meet international standards concerning the supervision of regulated entities operating globally."
The proposed amendments give the SFC discretion to provide supervisory assistance to an overseas regulator but will not impose an obligation to do so. Information obtained by overseas regulators in this manner may only be used for non-enforcement purposes.
The proposals are limited to requests for assistance to determine compliance with legal or regulatory requirements administered by the overseas regulator or to ascertain the risks to the stability of the overseas financial system, and which are related to a licensed corporation that is regulated by the SFC and the overseas regulator (Note 3). The proposals will not affect Hong Kong licensed corporations where neither they nor their group companies are regulated by overseas regulators.
The public is invited to submit their comments on or before 16 January 2015. Written comments may be sent via the SFC website (www.sfc.hk), by email to s180_186@sfc.hk, by post or by fax to 2284 4660.
Notes:
- The proposed amendments are to sections 180 (in respect of supervisory powers of the SFC) and 186 (in respect of assistance that may be provided by the SFC to overseas regulators) of the SFO.
- The assistance must be related to the regulated activities as defined under the SFO.
- Alternatively, the requests must concern a related corporation of a Hong Kong licensed corporation where the related corporation is regulated by the overseas regulator. “Related corporation” is defined in section 3 of Part 1 of Schedule 1 to the SFO.
