Regulatory Compliance

To maintain and promote the fairness, efficiency, transparency and orderliness of the financial industry of Hong Kong, sophisticated regulation has been put in place to market participants. Financial regulation is also a rapidly evolving area as financial technology advances and global market environment changes.

Having established in the international financial centre of Hong Kong, we provide clients with all-round advice, which takes into account various factors such as regulatory compliance, potential legal liability, vetting process by the regulators, corporate governance and business reputation. We are experienced in handling a wide range of regulatory issues both on a local and multi-jurisdictional basis.

We support clients on formulating practical measures in preventing non-compliance and in minimising risks of disciplinary, civil and criminal penalties. For instance, we have advised clients on structuring capital market transactions, which complies with the Main Board and GEM Listing Rules of SEHK, and the regulations relating to derivatives and securitization.

Our high calibre team can provide your business with innovative solutions in this increasingly regulated financial market.

Our related regulatory compliance services include advising clients on dealing with anti-money laundering investigations and white-collar crimes. Please refer to our Commercial Crime and Litigation & Dispute Resolution practices.

If you would like to know more about our capital markets practice or how we can help your business, please contact us at (852) 2810 1212 or at

Please refer to our articles in ‘Knowledge’

Recommended Posts

An update on the regulatory regime of OTC derivatives markets in Hong Kong
The Securities and Futures Commission (“SFC”) introduced 2 new regulated activities, namely type 11 regulated activities (“Type 11 RA”) and type 12 regulated activities (“Type 12 RA”), and collectively referred as the “new RAs”, to regulate persons who serve as dealers, advisers or clearing agents etc. in the OTC derivatives market. For definition of the new RAs and the transitional arrangement to the licensing regime, please refer to our newsletter “Regulating Intermediaries in the OTC Derivatives Market” (April 2017). Whilst the licensing regime for the new RAs has yet to be in operative, market participants have raised concerns over their regulatory scope and whether certain activities could be carved out from these new RAs. In response to market comments, the SFC released a consultation paper on 20 December 2017, proposing certain refinements to the scope of the new RAs and new conduct requirements (the “Consultation”). The Consultation has ended on 20 February 2018. This article provides a snapshot to the major proposal contained in the Consultation.
SFC unveils new regulatory framework for investments in virtual assets
Under existing regulatory remits in Hong Kong, market for virtual assets is not subject to the oversight of the Securities and Futures Commission of Hong Kong (the “SFC”) if the virtual assets fall outside the ambit of the definition of “securities” or “futures contracts” under section 2 of the Securities and Futures Ordinance (“SFO”). On 1 November 2018, the SFC issued the “Statement on regulatory framework for virtual assets portfolios managers, fund distributors and trading platform operators” (the “Statement”) and the accompanying “Circular to intermediaries – Distribution of virtual asset funds” (the “Circular”) in light of a growing investor’s interest in virtual assets investment and the inadequacy of the existing regime under the SFO to protect the investors from risks associated with investing in virtual assets, namely valuation, volatility and liquidity risks, accounting risk, cybersecurity risk, risk of money laundering and fraud etc.. A more robust approach in dealing with regulations on virtual assets market is set out in the Statement and the Circular in the hope of providing the investors with stronger protections from the risks associated with virtual assets investment. The Statement delineates the regulatory standard expected of virtual asset portfolio managers and virtual assets fund distributors and outlines the conceptual framework for licensing and regulating virtual asset trading platform operators.
SFC introduces investor identification and OTC securities transaction reporting regime
On 10 August 2021, the Securities and Futures Commission (the “SFC”) issued the consultation conclusions (the “Consultation Conclusions”) on proposals to (i) implement an investor identification regime at trading level for the local securities market (the “IDR Regime”) and (ii) introduce an over-the-counter securities transactions reporting regime for shares listed on the Stock Exchange of Hong Kong (the “OTCR Regime”) (the “Proposals”). The respondents broadly agreed with the Proposals and the SFC will proceed with the implementation of the IDR Regime and the OTCR Regime, which are expected to be launched in the second half of 2022 and the first half of 2023, respectively.
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