We deploy a range of regulatory tools to carry out our work, including regulatory initiatives, which are diagnostic, monitoring, preventive, sanctioning or remedial in nature.
- Diagnostic tools to identify and assess risks
Examples: Our Licensing Department uses diagnostic tools to identify licence applicants who could pose an unacceptable risk to investors. Licensed corporations are required to submit monthly financial resources returns to our Intermediaries Supervision Department (ISD). ISD uses a set of assessment indicators to assess the financial risk exposure of licensed corporations.
- Monitoring tools to check or track identified risks
Examples: ISD conducts both off-site monitoring and on-site inspections to identify instances of intermediary misconduct. Our Enforcement Division monitors trading activities in the securities and futures markets on a daily basis to gather evidence relating to market misconduct.
- Preventive tools to prevent or limit risks
Example: The Investor Education Centre (IEC)1 provides education programmes to raise investors' awareness of their rights and of the steps they can take to protect their interests.
- Sanctioning and remedial tools to deal with misconduct and redress losses
Examples: We may impose disciplinary sanctions where intermediary misconduct has been proven. In addition, the investor compensation scheme operates when an intermediary fails and causes loss to investors.
1 Launched in November 2012, the IEC is an educational body mandated to improve the public's understanding of retail financial products and services ranging from securities to banking and other financial products.