HK SFC Signs MoU With CSRC To Strengthen Enforcement Cooperation Under Shanghai-Hong Kong Stock Connect

Ashley Alder, HK SFC CEO -

The Securities and Futures Commission (SFC) and the China Securities Regulatory Commission (CSRC) on 17 October entered into a Memorandum of Understanding (MoU) on strengthening cross-boundary regulatory and enforcement cooperation under the proposed Shanghai-Hong Kong Stock Connect pilot programme (Stock Connect).

The MoU was signed on 17 October by the Chairman of the SFC, Mr Carlson Tong and the Chairman of the CSRC, Mr Xiao Gang.

“The MoU establishes an enhanced platform for information sharing, alerts, investigative assistance and joint investigations for both the SFC and the CSRC so together we can act to protect the integrity of both Hong Kong and Shanghai markets under the Stock Connect pilot programme ,” the SFC’s Chairman, Mr Carlson Tong said.

The CSRC’s chairman, Mr Xiao Gang said: “The signing of the MoU serves as a pre-requisite for the smooth commencement of the Stock Connect pilot programme and further enhances cross-boundary regulatory and enforcement cooperation between both sides, which is conducive to the upholding of openness, fairness and integrity of the markets and of the legitimate interests of investors, thereby promoting the healthy development of both capital markets.”

Under the MoU, the SFC and the CSRC have agreed to:

• provide for the sharing of information and data of risks and alerts about potential or suspected wrongdoing in either the Hong Kong or Shanghai stock markets under Stock Connect;
• establish a commitment and a process for joint investigations;
• ensure complementary enforcement action can be taken where there is wrongdoing in both jurisdictions; and
• make sure enforcement actions in both jurisdictions operate to protect the investing public of both the Mainland and Hong Kong, including actions that may be necessary to provide financial redress or compensation to affected investors.

The MoU will be activated upon the launch of the pilot programme subject to the finalisation of all necessary approvals, market readiness and relevant operational arrangements.