The Securities and Futures Commission (SFC) of

Hong Kong Hong Kong)., Legally Hong Kong, China in international treaties and organizations. is a special administrative region of China. With 7.5 million residents in a territory, Hong Kong is the fourth most densely populated region in the wor ...

is the independent

statutory body A statutory body or statutory authority is a body set up by law (statute) that is authorised to implement certain legislation on behalf of the relevant country or state, sometimes by being Primary and secondary legislation, empowered or deleg ...

charged with regulating the

securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...

and

futures markets A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts defined by the exchange. Futures contracts are derivatives contracts to buy or sell specific quantities of a commodity or f ...

in Hong Kong. The SFC is responsible for fostering an orderly securities and futures markets, to protect investors and to help promote Hong Kong as an international

financial centre A financial centre (financial center in American English) or financial hub is a location with a significant concentration of commerce in financial services. The commercial activity that takes place in a financial centre may include banking, ...

and a key financial market in Asia. Even though it is considered to be a branch of the government, it is run independently under the authorisation of the laws relating to

Securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...

and

Futures Futures may mean: Finance *Futures contract, a tradable financial derivatives contract *Futures exchange, a financial market where futures contracts are traded *''Modern Trader'', formerly Futures, an American finance magazine Music * ''Futures' ...

. The head office is in 54/F,

One Island East One Island East is a skyscraper in Taikoo Place, Quarry Bay, Hong Kong Island, Hong Kong. Overview The skyscraper is a commercial office building, rising 298.35 m (979 ft) and has 69 storeys plus two levels of basement. There is a ...

, 18 Westlands Road,

Quarry Bay Quarry Bay is an List of buildings, sites, and areas in Hong Kong, area beneath Mount Parker (Hong Kong), Mount Parker in the Eastern District, Hong Kong, Eastern District of Hong Kong Island, in Hong Kong. Quarry Bay is bordered by Sai Wan Ho ...

History

The SFC was created in 1989 in response to the

stock market crash A stock market crash is a sudden dramatic decline of stock prices across a major cross-section of a stock market, resulting in a significant loss of paper wealth. Crashes are driven by panic selling and underlying economic factors. They often fol ...

of 1987. In 1997 following the

Asian financial crisis The 1997 Asian financial crisis gripped much of East and Southeast Asia during the late 1990s. The crisis began in Thailand in July 1997 before spreading to several other countries with a ripple effect, raising fears of a worldwide economic meltd ...

, the regulatory framework was further improved. A comprehensive Securities and Futures Ordinance (SFO) was implemented in 2003, which expanded the SFC's regulatory functions and powers. Andrew Sheng served as chairman of the SFC from 1998 until 2005, when he was succeeded by

Martin Wheatley Martin Wheatley is a British financier, formerly managing director of the Consumer and Markets Business Unit of the Financial Services Authority in the UK, and is the former CEO of the Financial Conduct Authority. In London Wheatley worked for t ...

. Wheatley first served as chairman, and became CEO in 2006 when the posts of chairman and CEO were segregated to further promote corporate governance. Eddy Fong was appointed non-executive chairman in 2006. Ashley Alder assumed the position of CEO in 2011 and Carlson Tong was appointed non-executive chairman in 2012. In late 2022, Julia Leung was named as chief executive officer of the SFC.

Responsibilities

The SFC is one of four regulatory organisations that make up financial regulators in Hong Kong, one of the major financial centres in the world. The others are the

Hong Kong Monetary Authority The Hong Kong Monetary Authority (HKMA) is the central bank, central banking institution of Hong Kong. It is a government authority founded on 1 April 1993 when the Office of the Exchange Fund and the Office of the Commissioner of Banking merge ...

, Insurance Authority and the Mandatory Provident Fund Schemes Authority. The SFC is responsible for securities and futures markets including the

Hong Kong Stock Exchange The Stock Exchange of Hong Kong (, SEHK, also known as Hong Kong Stock Exchange) is a stock exchange based in Hong Kong. It is one of the largest stock exchanges in Asia and the List of major stock exchanges, 9th largest globally by market ...

, the seventh largest

stock exchange A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments. Stock exchanges may also provide facilities for ...

in the world (See

list of stock exchanges A list is a set of discrete items of information collected and set forth in some format for utility, entertainment, or other purposes. A list may be memorialized in any number of ways, including existing only in the mind of the list-maker, but ...

). The SFC has a responsibility to maintain order and protect investors, it does this by carrying out the following tasks: *Setting and enforcing market regulations *Licensing and supervising market participants such as brokers, investment advisers and fund managers *Supervising market operators including exchanges, automated trading services and clearing houses *Authorising offering documents of investment products to be offered to the public *Overseeing corporate activities of listed companies under the Codes on Takeovers and Mergers and Share Repurchases *Educating investors on markets, investment products and their risks

Structure

The SFC is an independent statutory body whose powers derive from the Securities and Futures Ordinance (SFO) legislation. The SFC is made up of a board whose members are appointed by the

Chief Executive of Hong Kong The chief executive of the Hong Kong Special Administrative Region is the representative of the Hong Kong Special Administrative Region and head of the Government of Hong Kong. The position was created to replace the office of Governor of ...

for a fixed term, a majority of which must be independent Non-Executive Directors. The board is headed by the chairman also appointed by the

. An executive committee led by a chief executive officer (CEO) reports to the board and the board chairman and he runs the agency on a day-to-day basis; this position was created in 2006. The SFC is funded by levies on transactions conducted on the

Stock Exchange of Hong Kong The Stock Exchange of Hong Kong (, SEHK, also known as Hong Kong Stock Exchange) is a stock exchange based in Hong Kong. It is one of the largest stock exchanges in Asia and the 9th largest globally by market capitalization as of August 20 ...

(SEHK) and the Hong Kong Futures Exchange (HKFE), as well as fees charged to market participants.

List of chairmen

# Robert John Richard Owen (1989–1992) # Robert William Nottle (1992–1994) # Anthony Francis Neoh (1995–1998) # Andrew Sheng Len-tao (1998–2005) #

(2005–2006) # Eddy Fong Ching (2006–2012) # Carlson Tong Ka-shing (2012–2018) # Tim Lui Tim-leung (2018–2024) # Kelvin Wong Tin-yau (since October 2024)

List of CEOs

The position of CEO was created in 2006. The list of CEOs is: #

(2006–2011) #Ashley Ian Alder (2011–2022) # Julia Leung Fung-yee (since January 2023)

HKSI Licensing Examination

The Licensing Examination for Securities and Futures Intermediaries (LE), a practical and market-focused examination, was developed with the assistance of regulators, academics and practitioners drawn from across the financial services industry. Its delegated by the SFC and conducted by the Hong Kong Securities and Investment Institute.

Criticisms

The Hong Kong Securities and Investment Institute faces a lot of criticisms since the test were not checked or validated independently before implemented to the examinations. In addition to that, no formal appeal procedures or practices are in place to check and balances the legitimacy of such examinations. Discrepancies between different languages are commonplace with these examinations. Candidates should be aware that neither SFC nor the Hong Kong Securities and Investment Institute (HKSI) endorses any study notes or practice questions.

Cryptocurrencies

Criticized for its response to JPEX, the SFC in September 2023 said that it would not publish a list of businesses applying for cryptocurrency licenses; a week later, the SFC backtracked and said it would publish it. In October 2024, the SFC began preliminary work on setting up a licensing program for over-the-counter (OTC) cryptocurrency trading and custody services. A McKinsey report from 2024 predicts that tokenized assets like mutual funds and ETFs could reach a value of $1.1 trillion by 2030 due to blockchain adoption.

References

External links

Official web site
{{authority control

Securities and exchange commissions Statutory bodies in Hong Kong Hong Kong government departments and agencies