ENG-2015 — Page 106

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Financial and Monetary Affairs

It monitors corporate disclosures under the statutory inside information disclosure regime and vets listing applications alongside the SEHK under the dual filing regime, in addition to enhancing listing rules. It also performs detailed reviews of specific companies and broader thematic reviews of market activities which may signal corporate misconduct.

Market infrastructure and trading - The SFC supervises the HKEx's exchanges and clearing houses, share registrars and automated trading services, including overseas exchanges and clearing houses operating in Hong Kong.

Enforcement The SFC takes firm and prompt action in combating misconduct and malpractice in the securities and futures markets. It can discipline licensed intermediaries through reprimands, suspension or revocation of licences and imposition of fines. It can also deal with market misconduct cases, such as insider dealing and market manipulation, by criminal prosecution or bringing them directly to the Market Misconduct Tribunal. In addition, the commission can apply to the court for injunctive and remedial orders against wrongdoers in favour of victims. Through criminal, administrative, compensatory and disciplinary actions, it strives to protect the interests of the investing public and send strong deterrent messages to the markets.

The Investor Compensation Company is a wholly owned SFC subsidiary established under the SFO to manage the Investor Compensation Fund. It receives and assesses claims and pays from the fund those claims deemed valid in respect of defaults of authorised intermediaries and financial institutions.

The SFC's powers are subject to both internal controls and external scrutiny, designed to ensure fairness in its decision-making, observance of due process and proper use of its regulatory powers. Specified SFC decisions are subject to review by the Securities and Futures Appeals Tribunal. The commission's procedures, actions and decisions are also subject to other checks and balances, including the Process Review Panel for the SFC, the Ombudsman and the courts.

Recent Developments

At the end of 2015, there were 41,347 licensed entities, including securities brokers, futures dealers, investment advisers and fund managers as well as their representatives, and 119 registered institutions, such as banks, engaging in regulated activities such as dealing in and advising on securities and futures.

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The Market Misconduct Tribunal is an independent body established under the SFO, and is chaired by a judge or a former judge of the High Court who sits with two members.

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