Hong Kong’s highest court confirms that its financial markets regulator may serve proceedings on foreign defendants for restoration orders as of right.

By Dominic Geiser, Simon Hawkins, Truman Mak, and Adrian Fong

The Hong Kong Court of Final Appeal (CFA) held in a recent judgment that the Securities and Futures Commission (SFC) does not need to seek leave of the Hong Kong court to serve false trading proceedings against defendants out of the jurisdictions for restoration orders.

SFC proposes guidelines for intermediaries conducting and receiving market soundings in securities and capital market transactions.

By Simon Hawkins and Adrian Fong

On 11 October 2023, the Securities and Futures Commission (SFC) issued a consultation paper (Consultation Paper) proposing new “Guidelines for Market Soundings” (Guidelines) for Hong Kong intermediaries conducting market soundings for securities and capital market transactions (such as private placements and block trades). Market participants will welcome this development, as the absence of specific guidance on market soundings has caused some inconsistencies in market practice, as the SFC noted following its thematic review of market soundings in 2022. 

SFC-licensed intermediaries should review the Guidelines and consider whether and to what extent their existing market sounding procedures should be adjusted to comply with the Guidelines.

The HKMA and the SFC permit relaxation of suitability and other regulatory requirements while dealing with high-net-worth and experienced investors.

By Simon Hawkins and Adrian Fong

On 28 July 2023, the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) issued a joint circular (Joint Circular) outlining a new streamlined approach for compliance with the suitability and related obligations when dealing with sophisticated professional investors, alongside guidance and FAQ on how to apply the new approach.

Regulators consult on an investor identification regime and outsourcing requirements, and issue guidance on electronic storage of regulatory records and environmental risk management

By Farhana Sharmeen, Simon Hawkins, Kenneth Y.F. Hui, and Marc Jia Renn Tan

This blog post summarises key regulatory developments in Hong Kong and Singapore during December 2020, including:

  • The SFC’s consultation on an investor identification regime for the securities market
  • The SFC’s additional guidance on external electronic data storage
  • The MAS’ response to feedback on the proposed guidelines on environmental risk management
  • The MAS’ consultation on requirements in relation to the management of outsourced services

Regulators propose new regulations for virtual asset exchanges and enhanced customer identity verification requirements, and launch an innovative commercial data interchange.

By Farhana Sharmeen, Simon Hawkins, Kenneth Y.F. Hui, and Marc Jia Renn Tan

This blog post summarises key regulatory developments in Hong Kong and Singapore during November 2020, including:

— The Hong Kong FSTB’s consultation proposing a new regulatory framework for virtual asset exchanges
— The HKMA’s new commercial data interchange initiative
— The MAS’ consultation proposing requirements to strengthen financial institutions’ non-face-to-face identity verification process of individuals
— The MAS’ guidance to financial institutions to review security controls amidst COVID-19
— The MAS’ publication of its 2019/2020 enforcement report

Regulators consult on anti-money laundering guidelines and issue guidance on cybersecurity, best execution, and senior management accountability.

By Farhana Sharmeen, Simon Hawkins, Kenneth Y.F. Hui, and Marc Jia Renn Tan

This blog post summarizes key regulatory developments in Hong Kong and Singapore during September 2020, including: (i) the SFC’s consultation on enhancements to its Guideline on Anti-Money Laundering and Counter-Financing of Terrorism for SFC-licensed firms (AML Guideline); (ii) the SFC’s thematic review report setting out the key findings and guidance on cybersecurity issues and vulnerabilities associated with mobile trading applications; (iii) the MAS’ consultation response to its proposal on best execution requirements; and (iv) the MAS’ new accountability guidelines for senior management.

Amidst its continued regulatory focus on money laundering and terrorist financing risks, the SFC seeks to clarify and consolidate guidance for licensed firms.

By Simon Hawkins and Kenneth Y.F. Hui

On 18 September 2020, the Hong Kong Securities and Futures Commission (SFC) published a consultation paper proposing a number of amendments to its Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) for SFC-licensed firms (the Guideline).

The consultation paper was issued following a wave of high-profile disciplinary actions taken by Hong Kong regulators for breaches of AML/CFT requirements. The SFC proposes to clarify and consolidate certain AML/CFT requirements by incorporating into the Guideline relevant guidance from the Financial Action Task Force (FATF), including the FATF’s Guidance for a Risk-Based Approach for the Securities Sector (FATF Guidance) and the SFC’s previous circulars on AML/CFT standards and regulatory expectations.

Regulators are consulting on how to enhance trust business regulation, introduce new omnibus legislation, and encourage best practices in sustainable banking.

By Farhana Sharmeen, Simon Hawkins, Kenneth Hui, and Marc Tan

This blog post summarises key regulatory developments in Hong Kong and Singapore during July 2020, including:

  • The HKMA’s publication of examples of good practices for green and sustainable banking adopted by various major international banks, which the HKMA has encouraged banks to review and consider in connection with managing climate change risks
  • The HKMA’s consultation proposing new measures to better regulate and supervise trust business, which will be particularly relevant to the wealth management sector
  • The MAS’s consultation on new omnibus legislation designed to enhance the effectiveness of addressing financial sector-wide risks

Regulators seek to expand market connectivity for wealth management products and enhance financial institutions’ environmental risk management.

By Farhana Sharmeen, Simon Hawkins, Kenneth Hui, and Marc Tan

This blog post summarises key regulatory developments in Hong Kong and Singapore during June 2020, including:

  • The announcement of a new “Wealth Management Connect” mutual market access project to link Hong Kong, Macao, and mainland China’s Greater Bay Area (GBA)
  • Amendments to the Hong Kong licensing regime for activities relating to over-the-counter (OTC) derivatives
  • Consultations on environmental risk management for Singapore financial institutions
  • Revisions to Singapore’s exemption framework for cross-border business arrangements of capital markets intermediaries

By Simon Hawkins and Kenneth Hui

The SFC’s consultation conclusions carve out non-financial groups and multilateral portfolio compression services.

On 12 June 2020, the Securities and Futures Commission (SFC) published its conclusions (Consultation Conclusions) on its December 2017 consultation paper that proposed modifications to the scope of regulated activities (i.e., activities for which a licence from the SFC is required) that will apply to dealing in, advising on, and providing clearing services for over-the-counter (OTC) derivatives.

The Consultation Conclusions set out the SFC’s final proposals to refine the scope of regulated activities in relation to the OTC derivatives licensing regime by implementing various amendments, clarifications, and carve-outs to the scope of applicable regulated activities.