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The Securities and Futures Commission (SFC) today released consultation conclusions on proposed amendments to the Securities and Futures Ordinance (SFO) for providing assistance to regulators outside Hong Kong (Note 1).
Having considered the comments of all the respondents, the SFC has decided to propose legislative changes (Note 2) to enable the SFC to provide a particular form of supervisory assistance to regulators outside Hong Kong upon request by making enquiries and obtaining certain records and documents from licensed corporations or their related corporations. The proposed supervisory assistance will be subject to both existing and new legislative safeguards.
These proposals will also enhance the SFC’s ability to enter into reciprocal supervisory arrangements with regulators outside Hong Kong that will include two-way exchanges of relevant supervisory information.
“The proposals will enable the SFC to adhere more closely to international regulatory standards and allow for more effective supervision of licensed corporations which operate in multiple jurisdictions,” said Mr Ashley Alder, the SFC’s Chief Executive Officer.
“Global supervisory cooperation among international regulators is essential as it assists regulators to better assess the financial and regulatory risks of industry participants and their likely effects on investors,” he added.
The proposed amendments will give the SFC discretion to provide supervisory assistance to a regulator outside Hong Kong but will not impose an obligation to do so. Information obtained in this manner may only be used for non-enforcement purposes.
While the proposals are incremental to the SFC’s existing information gathering powers, they do not alter existing positions regarding legal professional privilege or privilege against self-incrimination.
Notes:
- On 19 December 2014, the SFC issued the Consultation Paper on Proposed Amendments to the Securities and Futures Ordinance for Providing Assistance to Overseas Regulators in Certain Situations for public consultation until 16 January 2015.
- The proposed amendments relate 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 regulators outside Hong Kong) of the SFO.
