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Regulatory approach

As the markets we regulate have become more complex, global and interconnected, our approach has evolved to ensure effective regulation.


We adopt a front-loaded regulatory approach which emphasises early, targeted and systemic intervention to address persistent problems and pre-empt the fallout from emerging threats. Our resources are directed to the more serious risks which can harm investors and damage market integrity.


The challenges we face increasingly cut across all of our regulatory functions. We pursue a multidisciplinary approach to combine and deploy the full range of our regulatory tools to achieve our statutory objectives. Working as “One SFC”, we pool our expertise to ensure our regulatory actions are coordinated, targeted and effective.

Risk-based and holistic

In our supervisory work, we conduct ongoing thematic reviews to look into priority issues identified in our routine inspections of intermediaries while emphasising the competence of licensed individuals. We prioritise our enforcement investigations on key risks and cases which pose the greatest threats to investors and the markets. We also take a holistic enforcement approach to deal with systemic issues such as multiple failings within a corporate group.


Under the interconnected financial markets, we foster close cooperation with local, Mainland and overseas counterparts and law enforcement bodies on supervision, enforcement and market development initiatives. In particular, regulatory cooperation with our Mainland counterparts is vital in light of greater market connectivity and increasing two-way fund flows.


Innovation and technological advancement have transformed the financial landscape. We take a facilitative approach to innovation where it is conducive to market efficiency and investor experience. The aim is to ensure our regulations remain effective as new technologies are introduced and any risks to investors or financial stability are properly managed. Within the organisation, we adopt the latest technology, including advanced data analysis, in our supervisory work.

Last update: 19 Nov 2019

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