Hong Kong

SFC Issues Circular on Licence Holders Insurance Scheme (2025–2026)

The SFC released a circular on the Licence Holders Insurance Scheme for Exchange Participants covering the scheme year from 1 April 2025 to 31 March 2026. It outlines two categories of licensed corporations under the scheme: • Category 1: Licensed for Type 1 regulated activity (dealing in securities) • Category 2: Licensed for Type 2 regulated activity (dealing in futures contracts) Licensed corporations must maintain insurance to cover specified risks, in line with the Securities and Futures Ordinance. Date of Release: 1 April 2025 Implementation on: 1 April 2025 – 31 March 2026 Applicable to: Type 1 & Type 2 Licensed Corporations SFC Clarifies Regulatory Approach for Virtual Asset Staking Services

SFC issued a circular addressing its regulatory framework for virtual asset trading platforms (VATPs) offering staking services. The circular sets out specific licensing conditions and operational standards, including: • Strong internal controls • Custody requirements for client assets • Mandatory prior written SFC approval before offering staking services Date of Release: 7 April 2025 Implementation on: Immediately Applicable to: VATPs licensed in Hong Kong

SFC Announces Uncertificated Securities Market (USM) Launch for 2026

SFC confirmed plans to launch the Uncertificated Securities Market (USM) in early 2026, following full legislative enactment and industry readiness. The USM aims to digitise securities issuance and transfers, improve efficiency, and enhance investor protection. A USM-dedicated webpage was launched to provide updates and FAQs. Date of Release: 17 April 2025 Implementation on: Early 2026 Applicable to: Issuers, investors, intermediaries

SFC & HKMA Update OTC Derivatives Reporting Specifications

SFC and Hong Kong Monetary Authority (HKMA) published revised technical specifications to support Hong Kong’s OTC derivatives reporting regime. Updated materials include: • Administration and Interface Development Guide (AIDG) • Supplementary Reporting Instructions (SRI) • Revised FAQs The enhancements aim to address industry feedback ahead of the 29 September 2025 effective date. Date of Release: 25 April 2025 Implementation on: 29 September 2025 Applicable to: Reporting entities for OTC derivatives SFC to Increase Position Limits on Major Index Derivatives

SFC announced its plan to increase position limits for exchange-traded derivatives referencing Hong Kong’s three major stock indices. The proposal follows a successful public consultation and aims to boost market liquidity and hedging efficiency. Revised limits are expected to take effect in July 2025, subject to legislative procedures. Date of Release: 30 April 2025 Implementation on: July 2025 Applicable to: Derivatives market participants

SFC Revises Financial Return Form with Enhanced Hedge Fund Reporting Requirements SFC published a revised version of the financial return form required under section 56 of the Securities and Futures (Financial Resources) Rules. Key changes include the semi-annual collection of hedge fund data and enhanced reporting requirements for asset managers that are headquartered in Hong Kong and responsible for the overall operation of hedge fund portfolios with a net asset value of at least USD 500 million. Date of Release: 2 May 2025 Implementation on: 1 July 2025 (applicable to periods ending on or after 23 June 2025) Applicable to: Type 9 Licensed Corporations

SFC and Central Bank of Ireland Sign MoU on Fund Recognition

SFC issued a circular announcing the signing of a memorandum of understanding with the Central Bank of Ireland concerning mutual recognition of covered funds and covered management companies, as well as related cooperation. The MoU outlines eligibility requirements, types of eligible funds, and the application process. Date of Release: 14 May 2025 Implementation on: Immediate Applicable to: Irish and Hong Kong fund managers SFC and ADGM Sign MoU to Enhance Investment Manager Supervision SFC announced the signing of a memorandum of understanding with the Financial Services Regulatory Authority of Abu Dhabi Global Market (ADGM) to enhance cooperation on the supervision of investment managers of collective investment schemes operating between Hong Kong and the UAE. Date of Release: 15 May 2025 Implementation on: Immediate Applicable to: Investment managers in Hong Kong and the UAE SFC Broker Forum: Powering Growth with Resilience

SFC’s broker forum, themed “Powering Growth with Resilience”, convened 700 industry leaders. Key discussions included IPO market updates, innovations in exchange-traded and tokenised products, and enhanced account-opening approaches. The SFC also emphasised cybersecurity, internal controls, and operational resilience. Date of Release: 9 June 2025 Implementation on: 9 June 2025 Applicable to: Licensed brokers and capital market stakeholders Reminder on Annual HKEX Emergency Trading System Rehearsal

SFC issued a circular reminding intermediaries that Hong Kong Exchanges and Clearing Limited (HKEX) will conduct its annual emergency trading system recovery rehearsal on 19 July 2025. The exercise will test processes under the Hong Kong Investor Identification Regime (HKIDR), including BCAN-CID file submissions and BCAN tagging for order submissions. All Relevant Regulated Intermediaries (RRIs) are encouraged to participate. Only Exchange Participants (EPs) must submit the Notification and Evaluation Reply Forms.

Date of Release: 23 June 2025 Implementation on: 19 July 2025 Applicable to: RRIs and Exchange Participants under HKIDR

Circular on Key FATF Outcomes and Jurisdiction Updates

SFC issued a circular summarising key Financial Action Task Force (FATF) updates. Democratic People's Republic of Korea (DPRK) and Iran remain subject to countermeasures, while Myanmar continues under enhanced due diligence. Bolivia and the Virgin Islands (UK) were added to the list of jurisdictions under increased monitoring, while Croatia, Mali, and the United Republic of Tanzania were removed. The FATF also published various outcomes of its recent Joint FATF-MONEYVAL Plenary which may be of interest to licensed corporations, SFC-licensed virtual asset service providers and associated entities.

Date of Release: 27 June 2025 Implementation on: 27 June 2025 Applicable to: Licensed corporations and virtual asset service provider

HKMA, HKPF & HKAB Launch Anti-Fraud and AML Initiatives

The Hong Kong Monetary Authority (HKMA), Hong Kong Police Force (HKPF), and Hong Kong Association of Banks (HKAB) introduced new measures to combat fraud and money laundering. In 2024, deception cases rose 11.7% to 44,480. New initiatives include: • Expansion of Scameter database • Enhanced bank-to-bank information sharing • Thematic reviews • Industry guidance sharing Date of Release: 10 April 2025 Implementation on: Immediately Applicable to: Financial institutions, public

HKMA Launches 2025 Green Fintech Competition HKMA announced the launch of the 2025 Green Fintech Competition, inviting firms from Hong Kong and around the world to submit innovative green fintech solutions addressing five green fintech themes. Winners and finalists will gain access to various opportunities to support their business expansion and development.

Date of Release: 9 May 2025 Implementation on: 2025 competition cycle Applicable to: Fintech companies, green finance innovators

Circular on Reporting Templates under Group-Wide Supervision Regime The IA issued a circular providing reference reporting templates for designated insurance holding companies (DIHCs) under the Group-Wide Supervision (GWS) regime. The templates cover Capital Adequacy Supplementary Information (CASI), Group Board Updates, and Local Business Unit (LBU) Updates. The CASI template has been revised to capture derivatives and Level 3 assets. DIHCs are required to begin using the LBU template quarterly from 31 December 2025. Date of Release: 6 June 2025 Implementation on: Templates take effect on 31 December 2025 Applicable to: Designated insurance holding companies in Hong Kong GL36: Guideline on Valuation and Capital Requirements The IA has issued GL36, a new guideline under section 133 of the Insurance Ordinance, to provide practical guidance on the Insurance (Valuation and Capital) Rules (Cap. 41R). GL36 elaborates on quantitative impact studies, technical methods (e.g. stochastic simulation, matching adjustments), and other clarifications to help insurers comply effectively. It replaces the earlier circular dated 12 June 2024. Except for the rules on physical segregation of funds (paragraphs 11.3–11.4), which will become effective later, most provisions of GL36 will take effect from 1 July 2025. Date of Release: 20 June 2025 Implementation on: 1 July 2025 (general) / 31 December 2025 (physical segregation provisions) Applicable to: All authorised insurers in Hong Kong

SFST welcomes London Metal Exchange’s approval of first batch of approved warehouses in Hong Kong

The Secretary for Financial Services and the Treasury (SFST) welcomed the London Metal Exchange’s (LME) approval of the first batch of approved warehouses in Hong Kong. This development marks a key milestone in reinforcing Hong Kong’s position as a regional commodities trading and logistics hub, further enhancing its financial market infrastructure and international connectivity.

Date of Release: April 15, 2025 Implementation on: Implementation not expected Applicable to: Commodities trading sector, financial institutions

Government welcomes passage of Stablecoins Bill

The Hong Kong Government welcomed the passage of the Stablecoins Bill, which introduces a licensing regime for fiat-referenced stablecoin issuers. The new legislation establishes a regulatory framework to safeguard financial stability and enhance consumer protection while supporting innovation in the digital asset ecosystem.

Date of Release: May 21, 2025 Implementation on: Upon gazettal of the Stablecoins Bill Applicable to: Stablecoin issuers, virtual asset service providers, financial institutions

Government welcomes passage of Banking (Amendment) Bill 2025

The Hong Kong Government announced the passage of the Banking (Amendment) Bill 2025, which strengthens the regulatory regime governing banking operations and risk management practices. The amendments aim to align local banking regulations with international standards and enhance the resilience of Hong Kong’s banking system.

Date of Release: June 2025 Implementation on: Upon gazettal of the Banking (Amendment) Bill 2025 Applicable to: Authorised institutions, banking sector

No relevant regulatory news found this quarter

Consultation Conclusions on Fee Limits for ASRs SFC published consultation conclusions on fee limits for approved securities registrars (ASRs) under the upcoming uncertificated securities market (USM) regime. Respondents supported the limits, citing enhanced transparency, fairness, and investor protection. The limits will be incorporated into the ASR Code. The SFC received 11 submissions and will continue stakeholder engagement ahead of the USM’s early 2026 launch.

Date of Release: 13 June 2025 Implementation on: Early 2026 Applicable to: Approved securities registrars and listed companies

Public consultation on enhancing regulation of licensed money lenders launched today The Financial Services and the Treasury Bureau (FSTB) in Hong Kong launched a public consultation on proposals to tighten regulation of licensed money lenders. The measures would include stricter rules for unsecured personal loans, enhanced protection for loan referees, improvements to affordability assessments, stronger complaint-handling requirements, expanded public education, and tougher oversight of money lenders. Date of Release: 23 June 2025 Implementation on: To be determined (consultation ends 22 August 2025) Applicable to: Licensed money lenders and borrowers in Hong Kong

No consultation found for this quarter

No consultation found for this quarter

No consultation found for this quarter