ENG-2017 — Page 117

4.

Financial and Monetary Affairs

To clarify the SEHK's role as the primary front-line regulator and the SFC's role as the statutory regulator, the SFC and SEHK published conclusions to a joint consultation, launched in 2016, on proposed enhancements to the SEHK's decision-making and governance structure for listing regulation. Under the SFC's new front-loaded regulatory approach, it engages in targeted intervention at an early stage to protect markets and investors and has increased its direct presence in more serious listing matters which fall within the scope of the Securities and Futures (Stock Market Listing) Rules or the SFO.

In addition, the SFC published a guidance note on the duties of directors of listed companies and financial advisers regarding valuations in corporate transactions; a statement on the liability of valuers for disclosure of false or misleading information; and guidelines on the standards of conduct expected of sponsors, underwriters and placing agents for the listing and placing of new GEM stocks.

In view of the Belt and Road Initiative, the SFC issued a statement in April outlining factors it would take into account when reviewing the proposed listing of infrastructure project companies. This will help Hong Kong leverage opportunities presented by this initiative.

Separately, the SFC enhanced the position limit regime for futures and options contracts in June following the conclusion of a public consultation.

To promote fintech development, the SFC launched its Regulatory Sandbox in September to provide a confined regulatory environment for firms to conduct regulated activities utilising fintech.

The SFC signed fintech cooperation agreements with the Dubai Financial Services Authority, Securities Commission Malaysia and Australian Securities and Investments Commission.

On the enforcement front, the SFC took disciplinary action to maintain market integrity. The disciplined SFC licensees comprised 21 individuals and 17 corporations, with fines totalling $463.09 million.

Separately, nine individuals and four corporations were convicted for criminal offences. including the provision of false or misleading statements, short selling, unlicensed activities and failure to disclose interests.

In November, the SFAT upheld the SFC's disciplinary action against the Hong Kong arm of a private banking business for systemic failures in the marketing and sale of derivatives products prior to the onset of the global financial crisis. The bank was fined $400 million, suspended from advising on securities and partially suspended from dealing in securities for one year.

Insurance

At the end of 2017, there were 159 authorised insurers, 88 of which were incorporated in Hong Kong while the remaining 71 were incorporated on the Mainland or in overseas jurisdictions.

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