ENG-2017 — Page 116

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Financial and Monetary Affairs

Enforcement - The SFC takes firm and prompt action to combat misconduct in the securities and futures markets. It can discipline licensed intermediaries through reprimands, suspensions, licence revocations and fines. It can also deal with market misconduct cases, such as insider dealing and market manipulation, by bringing them to the Market Misconduct Tribunal or initiating criminal proceedings. In addition, the SFC can apply to the court for injunctive and remedial orders against wrongdoers in favour of victims. Using the full spectrum of its regulatory tools, the SFC 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 licensed intermediaries and authorised 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 (SFAT). Other checks and balances include the Process Review Panel for the SFC, the Ombudsman and the courts.

Recent Developments

At the end of 2017, there were 44,050 licensed entities, including securities brokers, futures dealers, investment and corporate finance 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.

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

2015

2016

2017

Licensed entities

Of which:

41,347

42,544

44,050

Licensed corporations

Licensed individuals

2,172

2,411

2,660

39,175

40,133

41,390

Registered institutions

119

121

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The SFC implemented a new Manager-In-Charge regime in 2017 to enhance the accountability of the senior management of licensed corporations to better align with the responsible officer regime and to promote awareness of their existing obligations and liabilities. One of the key measures under the regime is to require licensed corporations and corporate licence applicants to submit their up-to-date management structure and organisational charts to the SFC on an ongoing basis.

8 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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