Securities & Futures Commission of Hong Kong

Regulatory functions

Regulation is multi-dimensional requiring the collaborative application of various disciplines. Just as gears move in an interlocking setup to move machinery, we pull together as a professional team to carry out our regulatory functions. Below is an overview of how we are set up to meet the diverse needs of the increasingly complex securities and futures markets:

Functional flowchart

We set and uphold standards and qualifying criteria to ensure that corporations and individuals are fit and proper to conduct the regulated activities for which they are licensed. Once licensed, individuals and corporations are monitored for financial soundness and compliance with their regulatory obligations. We conduct off-site monitoring and on-site inspections of licensees, investigate allegations of misconduct and provide on-going guidance to help licensees stay abreast of regulatory standards.

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The Securities and Futures Ordinance empowers us to combat misconduct and criminal conduct in the securities and futures markets. Our surveillance, investigation and disciplinary work extends beyond listed companies and licensees to remedy contraventions by all market participants. Where required, we also work with other law enforcement agencies and overseas regulatory bodies on various investigations.

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We supervise market operators including exchanges, clearing houses and alternative trading platforms. To enhance the operation of Hong Kong's markets and to ensure they evolve in line with international developments, we introduce new rules from time to time and refine existing rules when the need arises.

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We oversee The Stock Exchange of Hong Kong Ltd (SEHK) and its administration of the Listing Rules. Under the Dual Filing regime, we vet listing applications alongside SEHK and work to ensure that important corporate news is disclosed in a timely manner. We also help to ensure the fair treatment of investors in takeovers, mergers and privatisations of public companies.

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We do not pre-determine the suitability or merit of individual products. Instead, we require that the offering documents and promotional materials of all retail investment products contain adequate and accurate information for investors to make informed decisions. In addition, products are required to meet the applicable structural and issuer eligibility requirements set out in our product codes.

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