SFC regulatory response to COVID-19

21 Apr 2020

The Securities and Futures Commission (SFC) is determined to respond actively to the significant impact of the COVID-19 pandemic on Hong Kong’s capital markets.  This response extends to the many brokers, asset managers and other market intermediaries the SFC supervises as well as listed companies and the Stock Exchange of Hong Kong Limited (SEHK). 

“All of the actions we have taken regarding the COVID-19 pandemic have had an overriding objective: to ensure that Hong Kong’s international financial markets will function efficiently, effectively and resiliently throughout this episode of extreme stress,” said Mr Ashley Alder, the SFC’s Chief Executive Officer.  “Firms, trading platforms and market infrastructures we supervise have risen to the challenge, and I can assure all of our stakeholders that the SFC will continue to take all measures necessary to ensure that Hong Kong’s markets remain fully open for business throughout this crisis.”

The COVID-19 pandemic has led to extreme levels of market volatility globally as well as major operational challenges associated with special work arrangements and other emergency measures across the financial industry.  In light of this, the SFC is pursuing a flexible approach directed to ensuring that markets continue to function properly, while safeguarding market integrity and investor protection.

“A significant part of our efforts have been directed to much-needed regulatory relief for the market participants, who have had to adapt very rapidly to the COVID-19 situation,” Mr Alder said.  “For example, we have given specific guidance on how brokers can record client orders when out of the office, deferred regulatory timetables to ease pressure on stretched resources across a range of regulated firms, and allowed more flexibility on licensing matters.”

For listed issuers, special guidance issued by the SFC and SEHK enabled the vast majority of companies with 31 December financial year-ends to issue preliminary earnings results in a timely manner.  This was followed by guidance concerning listed companies’ annual and other shareholders meetings, as well as the publication of annual reports.

The SFC has also intensified its supervisory efforts on potential vulnerabilities arising from the exceptional market conditions resulting from the COVID-19 pandemic.  This is to ensure that firms and financial market infrastructures manage their risks appropriately and continue to operate in a normal manner.  For example, it has focussed on investment fund liquidity and redemption profiles, as well as the fair treatment of fund investors, particularly if funds propose to activate liquidity risk management measures such as swing pricing or suspensions.

The SFC remains in close contact with all the clearing houses in Hong Kong to ensure that their margining policies are appropriately calibrated to the risks they face, while being sensitive to potential pro-cyclical effects.  And throughout this crisis the SFC has been closely monitoring derivatives markets and short selling data to ensure that activity in these areas does not pose any financial stability or systemic risks.  Hong Kong has a robust short-selling regulatory regime specifically designed to limit any potential distortion of the normal price-discovery function of markets while recognising the potential benefits of short selling.

“The SFC will continue to liaise with all of our key stakeholders to ensure that markets operate efficiently and fairly amidst the extraordinary conditions we are now experiencing,” Mr Alder added.



  1. Up-to-date regulatory information related to the COVID-19 situation is available on a dedicated webpage on the SFC’s website.         

Page last updated : 21 Apr 2020