ENG-2018 — Page 94

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Financial and Monetary Affairs

the listing-related functions of the Stock Exchange of Hong Kong Limited (SEHK), and the merger, takeover, privatisation and share buy-back activities of listed companies in Hong Kong.

Market infrastructure and trading - The SFC supervises the Hong Kong Exchanges and Clearing Limited (HKEX)'s exchanges and clearing houses, share registrars and providers of automated trading services, including overseas exchanges and clearing houses operating in Hong Kong.

Enforcement - The SFC takes firm and prompt action to combat misconduct and malpractice in the securities and futures markets. It disciplines licensed corporations through reprimands, licence suspensions or revocations, and monetary fines. It deals with market misconduct, such as insider dealing and market manipulation, by bringing cases to the Market Misconduct Tribunal' or initiating criminal proceedings. It can apply to the court for injunctive and remedial orders against wrongdoers in favour of victims.

Separately, the Investor Compensation Company Limited under the aegis of the SFC manages the Investor Compensation Fund. The fund compensates investors who have suffered losses in exchange-traded securities or futures contracts in Hong Kong as a result of a default by a Hong Kong intermediary. The Investor and Financial Education Council, also under the aegis of the SFC, carries out investor education on all financial products and enhances the public's financial literacy.

Insurance Authority

The Insurance Authority (IA) is the statutory regulator of insurance companies. It also plans to implement a new statutory regulatory regime for insurance intermediaries and take over the regulation of insurance intermediaries from the three Self-Regulatory Organisations3 within 2019.

The IA is financed by fees payable by insurance companies and insurance intermediaries, user fees for providing specific IA services and a levy on insurance premiums payable by policyholders.

As a member of the International Association of Insurance Supervisors, Hong Kong is required to observe international principles and standards in its insurance supervisory regime. The IA works with regulators in other jurisdictions in regulating major insurance groups, organises supervisory colleges for insurance groups of which IA is the home regulator and takes part in supervisory colleges organised by the home regulators of such groups.

Mandatory Provident Fund Schemes Authority

The Mandatory Provident Fund Schemes Authority (MPFA), established under the Mandatory Provident Fund Schemes Ordinance, regulates and supervises the MPF System. It ensures

1 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.

2

Previously called the Investor Education Centre.

3

The three organisations are the Insurance Agents Registration Board, established under the Hong Kong Federation of Insurers; the Hong Kong Confederation of Insurance Brokers and the Professional Insurance Brokers Association.

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