ENG-2016 — Page 110

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Financial and Monetary Affairs

underlying indices for these products were expanded from foreign equity indices to include Hong Kong equity indices. At the year end, 12 of these products were offered to the public.

In 2016, the SFC published guidelines on subjects including senior management obligations, regulatory requirements on account opening, algorithmic trading, operation of introducing broker business and suitability obligations. It also started three thematic reviews on licensed corporations in relation to the cybersecurity of internet and mobile trading systems, alternative liquidity pools" as well as best execution and client facilitation.

On the enforcement front, the SFC took disciplinary action to maintain market integrity. The disciplined SFC licensees comprised 34 individuals and 17 corporations, with fines totalling $64.75 million. Separately, seven individuals and two corporations were prosecuted successfully for criminal offences including unlicensed activities and provision of false or misleading

statements.

The SFC started legal proceedings in the Court of First Instance to seek disqualification orders against 10 directors of a listed company for allegedly breaching director duties. The Market Misconduct Tribunal handed down an order to ban a short seller from trading securities in Hong Kong for five years after finding him culpable of disclosing false or misleading information in a research report on a Hong Kong-listed company. In addition to the ban, the short seller was ordered to disgorge his profit of $1.59 million from shorting the shares of the Hong Kong company and issued with a cease and desist order12,

In March, the SFC established a Fintech Contact Point on its website to receive enquiries and requests from the fintech community. This is to encourage businesses involved in the development and application of fintech in Hong Kong to engage with the SFC.

Insurance

At the end of 2016, there were 160 authorised insurers, 87 of which were incorporated in Hong Kong while the remaining 73 were incorporated on the Mainland or in overseas jurisdictions.

During the past five years, the Hong Kong insurance industry grew 13.9 per cent on average annually. In 2016, gross premiums amounted to $448.8* billion, a 20 per cent increase over 2015. The total revenue premiums of in-force long-term business rose 22.9 per cent to $403.2* billion. Individual life insurance remained the leading business, accounting for $373.5* billion, or 92.6* per cent, of total revenue premiums, with 12.1* million corresponding policies.

General insurance business declined to $45.6* billion from $46 billion in 2015, representing a 0.7 per cent decrease in gross premiums. The reduction was largely due to insurance policies relating to property damage and general liability. The overall underwriting performance of general insurance business declined from $1.7 billion to $1.6* billion.

11

Also known as alternative trading systems or dark pools.

12

According to the SFO, a person under a cease and desist order shall not again perpetrate the market misconduct specified in the order.

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