Hong Kong


On 6 February 2025, the Securities and Futures Commission (SFC) published its Report on the 2023/24 Thematic Cybersecurity Review of Licensed Corporations. The report outlines significant cybersecurity incidents and compliance challenges faced by licensed corporations. It stresses the importance of enhancing protections against phishing, managing end-of-life software, and overseeing third-party IT services. Licensed corporations are urged to bolster their cybersecurity measures, closely monitor client accounts, and ensure active involvement from senior management in managing risks. These requirements are effective immediately, prompting a review of existing cybersecurity frameworks. For further details, please click here.

On 6 February 2025, the Green and Sustainable Finance Cross-Agency Steering Group announced three priorities to boost sustainable finance in Hong Kong. First, it will develop a comprehensive sustainability disclosure ecosystem by implementing international reporting standards and providing technical support. Second, the Group aims to expand the Hong Kong Taxonomy for Sustainable Finance and establish a Transition Finance Knowledge Hub. Lastly, it plans to create the Hong Kong Green Fintech Map to enhance transparency and accessibility in sustainable financing while improving public data tools for sustainability reporting. For more details, please click here.

On 17 February 2025, the SFC released a circular detailing the requirements for closed-ended collective investment schemes (alternative funds) that aim to be listed on the Stock Exchange of Hong Kong (HKEX). These funds, which focus on private and illiquid assets, must achieve a market capitalisation of at least HK$780 million (US$100 million) upon listing. Important factors for authorisation include the fund's performance and the qualifications of its management company. The circular also requires the appointment of a listing agent and mandates that at least 25% of the fund's units be held by the public, along with clear disclosures about investment strategies and associated risks. For further details, please click here.

On 19 February 2025, the SFC introduced a new roadmap to establish Hong Kong as a global virtual asset hub, featuring 12 major initiatives under the ASPIRe framework—Access, Safeguards, Products, Infrastructure and Relationships. First, the SFC will streamline access for global liquidity and develop regulatory frameworks for over-the-counter and custodian services. Second, it aims to expand virtual asset product offerings and optimise operational requirements for trading platforms. Lastly, the roadmap emphasises investor education and proactive stakeholder engagement to enhance market security. For more details, please click here.

On 21 February 2025, the SFC concluded regional meetings with Asia-Pacific securities regulators under the International Organization of Securities Commissions (IOSCO), focusing on a collaborative regulatory roadmap for sustainability, technology and investor protection. Chaired by SFC CEO Ms Julia Leung, the meetings fostered consensus on tackling scams and investment fraud. Ms Leung also met with Vietnam’s State Securities Commission Chairwoman to discuss crypto regulation and supervisory cooperation, welcoming Vietnam as the latest signatory to the Asia-Pacific Regional Committee (APRC) Multilateral Memorandum of Understanding. This initiative aims to strengthen trust and navigate complexities in the region’s capital markets. For more details, please click here.

On 26 February 2025, the SFC supported the measures proposed by Financial Secretary Mr Paul Chan in the 2025-2026 budget to strengthen Hong Kong as a financial hub. SFC Chairman Dr Kelvin Wong emphasised advancements in securities and derivatives markets. The SFC will work with the HKEX to facilitate technology enterprise listings and review listing requirements. Additionally, it aims to enhance risk management for derivatives and develop Hong Kong as a fixed income and currency hub. For more details, please click here.

On 27 February 2025, the SFC proposed to relax position limits for key exchange-traded derivatives linked to major Hong Kong stock indices. The consultation suggests increasing limits by 50% for the Hang Seng Index to 15,000 position delta, 108% for the Hang Seng China Enterprises Index to 25,000 position delta, and 43% for the Hang Seng TECH Index to 30,000 position delta. This change aims to enhance market flexibility and liquidity while maintaining a robust regulatory framework. Public comments are invited until 28 March 2025 via the SFC's website or contact methods. For more details, please click here.

On 18 February 2025, the Hong Kong Monetary Authority (HKMA) published an Adoption Practice Guide on Greentech in the Banking Sector. This guide explores how greentech can facilitate authorised institutions' transitions to net zero, addressing both internal operations and financed emissions. As part of its Fintech 2025 strategy, the HKMA emphasises cross-sectoral adoption of fintech, with greentech as a key focus area. The guide provides insights into sustainable practices and practical guidance for integrating greentech solutions. Institutions are encouraged to review the guide and consider responsible integration. For more details, please click here.

On 28 February 2025, the Insurance Authority (IA) released its Practice Note on Illustration Rate Caps in Benefit Illustration for Participating Policies. This document establishes minimum expectations for the illustration rate caps that authorised insurers must apply in benefit illustrations at the point of sale. The goal is to prevent overly aggressive investment assumptions, ensuring that policyholders have realistic expectations about their policies' performance. Licensed insurance intermediaries must provide accurate and complete benefit illustrations and avoid using re-illustrations for aggressive selling practices. For more details, please click here.

On 28 February 2025, the HKMA released results from the Climate Risk Stress Test (CRST 2.0). A total of 46 authorised institutions (AIs), representing over 90% of total banking sector lending, participated in assessing climate risk exposures through various scenarios. The results show strong resilience, with capital ratios remaining above the 8% minimum requirement. The report highlights advancements in stress testing capabilities and encourages AIs to enhance climate risk management. The HKMA will continue to provide guidance under the Sustainable Finance Action Agenda. For more details, please click here.

Enforcement


On 18 February 2025, the SFC issued restriction notices to Money Concepts (Asia) Holdings Limited and Money Concepts Asset Management Limited due to concerns about their honesty, integrity and ability to conduct regulated activities competently. The notices prohibit both companies from engaging in any regulated activities under the Securities and Futures Ordinance (SFO) without prior written consent from the SFC. For more details, please click here.

This document is provided for information purposes only and does not constitute legal, tax, investment, regulatory, accounting or other professional advice. For more information on the legal and regulatory status of IQ-EQ companies please visit www.iqeq.com/legal-and-compliance.