The report highlights a number of initiatives, many with an international dimension, aimed at strengthening regulation and raising market standards. The new regime for credit rating agencies has been implemented, draft legislation concerning short position reporting and disclosure of price-sensitive information by listed companies were introduced in the Legislative Council (and subsequently passed), and work continued on the complex international effort to de-risk the very large over-the-counter derivatives market. In addition, guidelines were published regarding anti-money laundering and counter terrorist financing, and a mystery shopping programme was conducted.
The report highlights enforcement cases brought under section 213 of the Securities and Futures Ordinance (SFO), which gives the SFC an ability to seek from the court injunctions and other remedial orders against those found to have violated key provisions of the SFO and Companies Ordinance. These include investors as well as listed companies in breach of the law.
“Hong Kong must adapt to changing circumstances, and act promptly and decisively in dealing with new risks and challenges,” said SFC Chairman, Dr Eddy Fong. “Financial regulators have to look beyond their traditional boundaries of regulation and understand how risks stemming from changing markets are interconnected.”
“The theme ‘interconnectivity’ chosen for this annual report illustrates the increased importance of continual communication and extensive collaboration in achieving regulatory outcomes,” said SFC Chief Executive Officer, Mr Ashley Alder. “Our priorities will be to improve market resilience, reduce systemic risks, further strengthen investor protection, and to continue to combat market misconduct. Much of this effort depends on close collaboration and communication with other financial regulators locally and internationally. I encourage you to read the chapter “Corporate Outlook” to learn more about our areas of focus for the year ahead and how we shall tackle them.”
During the reporting year, the SFC remained active in the task forces and committees of international standard-setting bodies charged with developing and implementing financial reform, enhancing standards and facilitating market development. Close collaboration with Mainland authorities is also a key priority.
The SFC also contributed to the growing pool of renminbi investment products available in Hong Kong. In addition to 19 Renminbi Qualified Foreign Institutional Investor funds, the SFC authorized the first ever gold exchange-traded fund denominated and settled in renminbi as well as the first renminbi real estate investment trust.
Investor education is vital, and the SFC’s many efforts in this area are described in the report. The SFC regularly uses the mass media, including television and radio, to reach out to a wide audience.
View the Report HERE