ENG-2016 — Page 109

4

Financial and Monetary Affairs

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 by bringing them to the Market Misconduct Tribunal1o. In addition, the SFC 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 Limited 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. Other checks and balances include the Process Review Panel for the SFC, the Ombudsman and the courts.

Recent Developments

At the end of 2016, there were 42,544 licensed entities, including securities brokers, futures dealers, investment and corporate finance advisers and fund managers as well as their representatives, and 121 registered institutions, such as banks, engaging in regulated activities. such as dealing in and advising on securities and futures.

Statistics on Licensing for SFC-regulated Activities (year end)

Licensed entities

Of which:

Licensed corporations

Licensed individuals

Registered institutions

2014

2015

2016

39,621

41,347

42,544

2,034

2,172

2,411

37,587

39,175

40,133

118

119

121

Following a public consultation, the SFC issued Principles of Responsible Ownership in March. to provide guidance on how investors of Hong Kong-listed companies should fulfil their ownership responsibilities. In June, the SFC and HKEX jointly issued a consultation paper on proposed enhancements to the SEHK's decision-making and governance structure for listing regulation. The SFC also launched a consultation exercise in September proposing enhancements to the position limit regime to expand its scope and make it more responsive to financial market developments.

To promote the diversity of investment products offered in Hong Kong, the SFC authorised the first batch of leveraged and inverse products for listing in June. In December, the eligible

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.

75