SFC highlights key regulatory work and market data in quarterly report

The Securities and Futures Commission of Hong Kong, SFC, has published its latest Quarterly Report covering the period from July through September 2023. The report provides some general statistical data e.g. on mutual fund registrations, licenses granted, or enforcement actions, and also summarizes industry developments and the Commission’s regulatory activities during the specified period. Some of the highlights are noted below:
– The SFC has announced upcoming enhancements to the Wealth Management Connect to expand the list of eligible products that may be traded in the Guangdong-Hong Kong-Macao Greater Bay Area (EventID 23120). Wealth Management Connect is a program that facilitates cross-border investment within this region and allows investors to invest in wealth management products offered by banks in Hong Kong, Mainland China, and Macao.
– The SFC has reached an agreement with the China Securities Regulatory Commission to introduce block trading on Stock Connect (EventID 22494), which establishes a direct link between the stock markets in Hong Kong and Mainland China allowing investors from both regions to trade eligible stocks listed on each other’s exchanges. The aim of the introduction is to elevate the efficiency of trading operations and foster the concurrent growth of the Mainland and Hong Kong capital markets.
– The SFC has concluded its consultation on changes to its clearing rules for over-the-counter (OTC) derivative transactions (EventID 22828). The aim was to remove those contracts from the clearing requirement that were still referencing LIBOR and to introduce new clearing obligations for certain alternative benchmark rates.
– The SFC has concluded its consultation on new risk management guidelines for future brokers which will come into force on February 25, 2024 (EventID 22823). The guidelines cover key risk management issues, such as the establishment of an adequate risk governance framework, guidelines as to the monitoring and control of market risk, guidance on concessionary margining, including when a broker may refrain from collecting initial margins, and guidance as to liquidity risk management.
– The SFC has published its consultation conclusions on enhancements to the Securities and Futures Ordinance to enhance the SFC’s enforcement powers and expand the scope of applicability of several enforcement-related provisions, particularly in the area of insider dealing (EventID 22631).
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As these are only the key regulatory activities in the past quarter, please consult the enclosed document (Link background) or follow above noted link for more detailed, comprehensive information.