Reminder of SFC’s Strategic Priorities for 2024-2026
As a licensed corporation in Hong Kong, understanding these priorities is crucial for compliance and staying ahead in a competitive market.
Key Priorities
The SFC’s plan covers four areas:
- Market resilience : the plan focuses on protecting against global volatility, cyber security threats, and technological risks. There will be increased scrutiny on cyber security policies and risk management frameworks.
- Global competitiveness : the plan aims to deepen ties with mainland China and expand internationally, potentially requiring updates to cross-border compliance and reporting.
- Technology and ESG transformation : there is an emphasis on virtual asset regulations, tokenisation, and sustainable finance, meaning firms must prepare for ESG reporting and blockchain-related compliance.
- Institutional efficiency : the plan involves digitalising processes and enhancing cyber resilience, to ensure your operations align with streamlined, AI-driven workflows.
Compliance Implications
Each priority has specific compliance implications. We have set out below some insights to ensure that licensed corporations remain aligned with SFC expectations:
1. Market Resilience: Staying Strong Amid Volatility
The SFC is doubling down on protecting Hong Kong’s markets from global risks such as cyber security threats and scams. To stay compliant, licensed corporations must:
- Conduct regular cyber security audits to identify and remedy any vulnerabilities.
- Implement robust risk management frameworks to tackle emerging threats head-on.
- Train staff on anti-scam protocols to support the SFC’s public education push with the Hong Kong Police Force.
2. Global Competitiveness: Expanding Your Reach
Hong Kong’s edge as a financial hub is dependent on deeper ties with mainland China and global markets. The SFC wants to boost this through cross-border programs and IPO quality. The compliance checklist includes:
- Review cross-border compliance policies to match international standards, particularly for mainland-related activities.
- Ensure reporting mechanisms are ready for a broader pool of issuers and investors.
3. Technology and ESG Transformation: Leading the Future
The SFC is pushing fintech and sustainable finance, with a focus on virtual assets and ESG (Environmental, Social, and Governance) practices. In order to keep up, licensed corporations must:
- Adopt ESG disclosure standards to fight greenwashing and meet growing sustainability demands.
- Ensure compliance with virtual asset regulations, prioritising investor protection in this fast-evolving space.
- Build ties with law enforcement to prevent tech-related crimes, aligning with the SFC’s blockchain and Web 3 goals.
4. Institutional Efficiency: Streamlining for Success
The SFC is modernising its own operations and expects licensed corporations to do the same by utilising digital tools and strong defences. There is a focus on:
- Implementing AI-driven workflows to match the SFC’s efficiency goals and streamline processes.
- Enhancing cyber security measures to meet heightened expectations for data protection.
To view the full publication, please click here. Waystone’s APAC Compliance Solutions team specialises in regulatory compliance and provides objective insights, subject expertise, and a simple approach to all your compliance-related needs. Should you have any questions on this topic, please reach out to us today.