Reminder of SFC’s Strategic Priorities for 2024-2026
As a licensed corporation in Hong Kong, understanding these priorities is crucial for regulatory compliance and staying ahead in a competitive financial market.
Key Priorities Set by the SFC
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 for Licensed Corporations
Each priority has specific compliance implications. We have set out 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 for firms in Hong Kong 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 Environmental, Social, and Governance (‘ESG’) 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 in Hong Kong 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 SFC publication, please visit the SFC’s Strategic Priorities for 2024-2026 guide.
How Waystone Can Help
Waystone’s APAC Compliance Solutions team specialises in regulatory compliance in Hong Kong and provides objective insights, subject expertise, and a simple approach to all your compliance-related needs. Should you have any questions on this topic about the SFC’s strategic priorities, please reach out to us today.