To maintain the financial stability and facilitate the economic growth of Hong Kong, regulators have been reviewing regulations, guidelines and compliance regularly. Regulators around the globe may introduce new requirements or take enforcement actions from time to time. In our ‘financial services sector updates’, it will include the latest development of the sector for your reference:
HKMA and SFC Joint Enforcement Action: Hang Seng Bank Fined HK$66.4 Million for Misconduct in Investment Product Sales
The Securities and Futures Commission (SFC) has reprimanded and fined Hang Seng Bank Limited (HSB) HK$66.4 million for serious regulatory failures related to the sale of collective investment schemes (CIS) and derivative products. The SFC's disciplinary action stemmed from a referral by the Hong Kong Monetary Authority (HKMA), whose investigation revealed a range of concerns regarding HSB’s sale practices.
Key issues included:
- Inadequate Supervision and Monitoring: HSB failed to adequately supervise and monitor the sale of CIS to its clients, resulting in significant transaction costs borne by the clients.
- Frequent Transactions: Clients were solicited into conducting excessively frequent transactions with short holding periods, which contradicted both the funds’ investment objectives and the clients’ preferred investment horizons.
- Deficient Internal Controls: The bank's internal controls were deficient, failing to keep a sufficient audit trail and to monitor and follow up on potentially problematic transactions.
- Overcharging and Inadequate Disclosure: HSB retained monetary benefits from client transactions in circumstances where it should not have done so under applicable regulatory standards and failed to adequately disclose these benefits to clients.
Mr. Raymond Chan, Executive Director (Enforcement and AML) of the HKMA, mentioned that the enforcement outcome was a result of close collaboration between the HKMA and the SFC. He emphasized that it helps to send a strong message to the market that regulatory bodies are united in their efforts to uphold high standards and protect investors.
Read more from the source:
https://www.hkma.gov.hk/eng/news-and-media/press-releases/2025/01/20250127-4/
SFC Imposes 14-Month Ban on Steven Wong Yung for Fund Management Failures
On 19 March 2025, the Securities and Futures Commission (SFC) prohibited Mr. Steven Wong Yung, a former responsible officer (RO) and chief executive officer of Kylin International (HK) Co., Limited (Kylin), from re-entering the industry for 14 months from 18 March 2025 to 17 May 2026. This ban was due to failures in managing various private funds between August 2018 and July 2021. Wong was responsible for overseeing the overall operations and internal controls of Kylin.
The SFC found that Wong failed to discharge his duties as an RO and a member of the senior management of Kylin to ensure its maintenance of appropriate standards of conduct and adherence to proper procedures in managing the funds in question, and to properly manage the risks associated with Kylin’s business. In deciding the sanction, the SFC took into account Wong’s cooperation with the SFC in resolving the SFC’s concerns and his otherwise clean disciplinary record.
Read more from the source:
https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/enforcement-news/doc?refNo=25PR34
SFC Unveils New Roadmap to Position Hong Kong as a Leading Global Virtual Asset Hub
On 19 February 2025, the Securities and Futures Commission (SFC) outlined 12 major initiatives to enhance the security, innovation, and growth of Hong Kong’s virtual asset (VA) market under the five-pillar “ASPIRe” roadmap. This roadmap stands for Access, Safeguards, Products, Infrastructure, and Relationships.
The SFC explained that the initiatives aim to streamline access for global liquidity, enable adaptive compliance and product frameworks focusing on security, and drive infrastructure upgrades for traditional finance to tap into blockchain efficiency. The SFC added that new frameworks for regulating VA over-the-counter and VA custodian services would be developed, while VA product and service offerings would be expanded. Other measures include optimizing operational requirements for VA trading platforms, combating illicit activities, investor education, and proactive stakeholder engagement.
Dr. Eric Yip, the SFC’s Executive Director of Intermediaries, emphasized that adhering to the core principles of investor protection, sustainable liquidity, and adaptive regulation, the roadmap is a calibrated response to emerging VA market challenges and helps future-proof the ecosystem. He also noted that the roadmap is not a final destination but a living blueprint, inviting collective efforts to advance Hong Kong’s vision as a global hub where innovation thrives within guardrail
Read more from the source:
https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=25PR20
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