Australia

ASIC gives further relief for licensees under the reportable situations regime

ASIC has provided Australian financial services and credit licensees additional targeted relief under the reportable situations regime in response to feedback from industry.

The reportable situations regime requires licensees to promptly identify, fix and report potential misconduct. According to ASIC, compliance with the regime can help lift industry standards and in turn improve consumer outcomes. The regime also aims to increase regulatory intelligence for ASIC.

ASIC reported that the new relief:

  • exempts industry from reporting certain breaches of the misleading and deceptive conduct provisions, and certain contraventions of civil penalties;
  • broadens the types of reports that are exempt, by increasing (i) the time allowed for rectification (from when the breach first occurred) from 30 days to 60 days, (ii) the number of impacted customers from five to 10, and (iii) the total financial loss or damage to consumers from $500 to $1000; and
  • clarifies that a report is taken to be lodged with ASIC, if a licensee has submitted a breach report to APRA that contains all the information APRA has requested.

ASIC’s view is that the relief reduces the reporting burden on industry while upholding the objectives of the regime, noting that more substantial changes to the legislative framework are a matter for Government.  [27 Jun 2025]

APRA shines light on retirement product performance

APRA has published data on superannuation retirement products for the first time. In APRA’s view, the performance of retirement products is vital to the retirement incomes received by Australians. APRA’s intention is that the new data will increases transparency regarding investment returns, fees and costs, and investment strategies at a product level.

The publication captures key performance data for 600 multi-sector investment options where the trustee sets the investment strategy or manages the investments. The key data includes a breakdown of product fee structures, investment strategies and associated strategic asset allocations. The data is provided as a product level and fund level. 

APRA has said that it will provide quarterly insights on retirement products data going forward.  [26 Jun 2025]

APRA releases letter to RSE licensees

After previously advising Registrable Superannuation Entity (RSE) licensees that it would be intensifying scrutiny of fund-level expenditure to support better outcomes for members, APRA has released a letter to RSE licensees setting out initial observations, examples of better practice, and areas for improvement to support compliance with legal duties and to achieve better outcomes for members.

The observations relate to (1) decision-making, (2) expenditure management frameworks, and (3) monitoring and reporting, and were informed by a process in which APRA collated information from 14 RSE licensees of varying sizes, relating to discretionary expenditure, marketing and connected entity spending.

APRA has said it will continue to monitor fund-level expenditure as part of ongoing supervision.  [24 Jun 2025]

ASIC Commissioner shines light of regulatory priorities in financial advice

ASIC Commissioner Alan Kirkland delivered a keynote address at an industry summit, discussing ASIC’s priorities in financial advice.

From ASIC’s point of view, the key points were as follows:

  • One of the greatest risks to investors that ASIC is seeing is high-pressure sales practices that lure Australians into investments that are not in their financial interests. Licensees have a role in preventing misconduct and, where concerning conduct is detected, they must report it to ASIC.
  • Licensees must ensure relevant providers are properly qualified to provide financial advice from the start of 2026.
  • ASIC is reviewing how well investment managers and financial advisers are managing the potential risks of offshore outsourcing, reminding licenses that their regulatory obligations remain regardless of whether functions are conducted locally or overseas.  [23 Jun 2025]

ASIC warns industry and consumers of share sale fraud

ASIC has updated guidance for Australian financial services (AFS) licensees about how they can reduce share sale fraud risks to their clients and business. ASIC reported that this follows a spike in reports of stolen shares due to identity theft and an industry review.

ASIC defines share sale fraud as the fraudulent activity of a person who is not who they claim to be, selling or transferring shares that do not belong to them.

The updated Information Sheet 237 Protecting against share sale fraud includes observations on share sale fraud methods by bad actors and better practices for licensee prevention and detection. The topics covered include client onboarding, ongoing due diligence, intermediary clients, periodic reviews and testing, AML/CTF training, and reporting suspicious matters. The 'better practices' outlined in the guidance include:

  • being alert to possible use of stock images, fakes, forgeries, and independently verifying their authenticity when onboarding new clients;
  • monitoring trading behaviour and conducting additional due diligence where trading is unusual for a client, a client makes large withdrawal requests or newly opened accounts are observed; and
  • conducting further due diligence when clients add or request changes to personal information such as postal/email addresses and bank accounts, including, where possible, checking that bank accounts are held in the client’s name.  [24 Jun 2025]

ASIC issues infringement notices to Equity Trustees for misleading statements

Equity Trustees Limited has paid $56,340 to comply with three infringement notices issued by ASIC. In the notices, ASIC alleged that Equity Trustees, as the responsible entity of the Artesian Green and Sustainable Bond Fund, made misleading statements about the fund’s investments. The notices are published on the infringement notices register.

ASIC reported that between 10 April 2024 and 7 November 2024, the fund’s product disclosure statement, target market determination and website stated that the fund invested in green, sustainable and social corporate bonds issued by companies. However, at that time, the fund had significant exposure to government and supranational bonds (not issued by corporations), which were inconsistent with its declared strategy and objectives.

Equity Trustees paid the infringement notices on 13 June 2025. Payment of an infringement notice is not an admission of guilt or liability.  [19 Jun 2025]

ASIC commences action over alleged failure to ensure retail investors were in the relevant target market

ASIC has commenced proceedings against a funds management company alleging that it failed to take reasonable steps to ensure that retail investors were in the target market of its ‘Select Income Fund’ between 2021 and 2023.

ASIC specifically alleges that while retail investors were given a questionnaire to determine whether they were in the fund’s target market, the responses were not reviewed until August 2023 and the company did not use the answers to screen customers until 6 October 2023.

The company has issued a statement that it has assisted ASIC throughout its investigation and remains focused on continuing to offer retail investors access to varied investment opportunities.  [11 Jun 2025]

BNPL Products now subject to AFCA dispute resolution

From 10 June 2025, Buy Now Pay Later (BNPL) products are regulated under the National Credit Act and subject to dispute resolution through the Australian Financial Complaints Authority (AFCA).

BNPL providers now must:

  • be an AFCA member;
  • obtain an Australian Credit Licence; and
  • offer internal dispute resolution processes to customers.  [10 Jun 2025]

ASIC grants limited no-action position for deficient advice fee written consents

ASIC has granted a limited no-action position in response to a specific issue raised by the advice industry about the inclusion of account numbers in a client’s written consent for the deduction, or arranging of the deduction, of ongoing advice fees.

ASIC does not intend to take action for breach of s 962S of the Corporations Act 2001 or s 99FA of the Superannuation Industry (Supervision) Act 1993 where written consent was given by a client for the fee recipient to deduct fees under an ongoing fee arrangement (OFA) from 10 January 2025 until 5 September 2025, an account number was not included in the consent, and a trustee deducted from the relevant member’s account the advice fees as set out in the account (in the case of superannuation).

This no-action does not prevent an OFA terminating under s 962WA or third parties from taking legal action.  [6 Jun 2025]

ASIC shares industry feedback and next steps in response to discussion paper on public and private markets

ASIC has published an update on feedback to its discussion paper issued in February 2025, which looked at the evolving relationships between public and private markets in Australia, the projected future of Australia’s capital markets, and growth of private markets and decline in public listings. Various industry stakeholders, including superannuation trustees, fund managers, and market operators, responded, and ASIC identified a consensus that both market types should thrive together.

Key themes distilled from the feedback received include:

  • structural and cyclical factors are shaping both public and private markets;
  • public market adjustments would improve and enhance their attractiveness;
  • as private markets are here to stay and grow, regulatory guidance should to be measured and developed in collaboration with industry and in alignment with international standards;
  • private credit contributes to the economy; there may be work to do to ensure it is sustainably done well;
  • superannuation is a mature investment force in Australia and a significant and structural influence in markets and investment; and
  • there is more to do on data collection and transparency of private markets.

ASIC Chair, Joe Longo, assured stakeholders that ASIC is committed to carefully considering the feedback received. The regulator will announce the adoption of some of the proposed actionable ideas and will share its roadmaps for public and private markets in Q3 and Q4, respectively.  [4 Jun 2025]

ASIC warns AFS licensees to check relevant information ahead of Financial Services Register

ASIC is encouraging providers and their authorizing Australian financial services (AFS) licensees to immediately verify all details on the Financial Advisers Register, ahead of the compliance deadline set for 1 January 2026.

ASIC also recommends AFS licensees:

  • check relevant providers’ authorisation history to ensure it is accurate;
  • confirm that relevant providers meet the definition of an ‘existing provider’ if they intend to meet the qualifications standard;
  • notify ASIC after confirming the relevant providers meet the eligibility criteria;
  • notify ASIC after confirming relevant providers have completed the prescribed courses; and
  • ensure the relevant providers’ contact details are correct.  [3 Jun 2025]

ASIC review of compliance plans of registered managed investment schemes

ASIC's review of compliance plans for registered managed investment schemes has revealed significant inadequacies. ASIC has published guidance to assist these entities in addressing their compliance obligations.

The review focused on three main regulatory obligations:

  • reportable situations;
  • product design and distribution obligations; and
  • internal dispute resolution processes.

ASIC urges entities to consider their compliance plans in light of eight questions which it has set out and in light of the findings from ASIC's review.  [3 Jun 2025]

Hong Kong

HKEX publishes Compliance Bulletin (Issue no. 14) to remind participants of various requirements

The HKEX has published the 14th issue of its Compliance Bulletin to remind participants of the following requirements:

  • Large open position (LOP) reporting requirements and procedures: The HKEX reminded participants regarding the LOP reporting requirements for Hang Seng TECH Index futures and options (which took effect from 2 July 2025), as well as reporting procedures for severe weather trading.
  • Client protection measures: The HKEX reminded participants regarding the press release and circular issued by the SFC on 6 June 2025, which urged brokers to enhance protection for their clients and to address the prevention and handling of unauthorised trading incidents (see our previous update). Participants should also observe the relevant eligibility requirements and procedures when submitting requests for trade cancellation / amendment in the cash market or error trade claims in the derivatives market.
  • Updated margin guidelines: The HKEX reminds participants to implement appropriate measures to comply with the revised guidelines on the margin requirements under HKFE Rule 617 by 18 July 2025 (see our previous update).
  • Annual Attestation and Inspection Programme: Participants are reminded to submit the 2025 questionnaire via the Electronic Communication Platform by 1 August 2025, and to note the findings of the 2024 programme published on 31 March 2025.

The HKEX notes that the requirements and examples set out in the bulletin are not exhaustive. Participants should take into consideration their own circumstances to ensure full compliance with the relevant rules and requirements, and seek their own professional advice on their specific situations where appropriate.

The HKEX strongly advises participants to review their current set up and implement appropriate measures to strengthen their controls. Where necessary, they should take appropriate action to address any potential rule breaches or deficiencies.  [30 Jun 2025]

Launch of 30-year swap trading on Northbound Swap Connect

The HKEX has announced the launch of interest rate swap contracts with a maximum tenor of 30 years on Northbound Swap Connect, expanding from the previous maximum tenor of 10 years.  This development was achieved as a result of collaboration between OTC Clearing Hong Kong Limited (OTC Clear), the China Foreign Exchange Trade System, and the Shanghai Clearing House.

On launch day, 25 institutions conducted 56 transactions in RMB interest rate swaps with an extended tenor via Northbound Swap Connect, with an aggregate notional amount of around RMB1.53 trillion.

This Swap Connect enhancement will extend the connectivity between Mainland China and Hong Kong's interest rate derivatives markets, and further support the diversified risk-management needs of both Chinese and international institutions, including insurance companies and pension funds, by matching the swaps tenor with the duration of their long-term bond holdings. The enhancement will also enable international investors to adopt more sophisticated trading strategies in their cross-border investment, enhancing the overall efficiency of asset allocation in RMB.

Further information is set out in a circular issued by OTC Clear, with a further circular confirming that the SFC has approved amendments to the Clearing Procedures (see clean and marked-up versions) for the purpose of enabling the clearing of Original Standard Northbound Rates Derivatives Transactions referencing the SHIBOR 3-month and FR007 reference rates which have terms of up to 30 years.  [27 & 30 Jun 2025]

FSTB and SFC launch two-month consultation on proposed regimes to regulate VA dealers and custodians

The Financial Services and the Treasury Bureau (FSTB) and the SFC have launched a joint public consultation on the legislative proposals for establishing licensing regimes for virtual asset (VA) dealing and custodian services. Comments on the proposals are required to be submitted by 29 August 2025. During the consultation period, the FSTB and the SFC will also meet with relevant sectors to gather feedback.

This follows the FSTB's earlier consultation launched in February 2024 on the legislative proposals for establishing a licensing regime for VA over-the-counter service providers. Based on the feedback received, the FSTB and the SFC have revised the legislative proposals and now consult on the framework and key elements of the revised proposals.

The revised legislative proposals cover the licensing regimes for VA dealing service providers and VA custodian service providers. Under the proposals, the SFC will be the standard setter, responsible for formulating regulatory requirements applicable to licensed and registered VA dealing and custodian service providers. The HKMA will be the frontline regulator for banks and stored value facilities registered to provide the relevant services. Both the SFC and the HKMA will be provided with the powers to implement the regimes in accordance with the statutory requirements.

Irrespective of whether the relevant VA dealing services are provided through a physical outlet and/or other platforms, both simple dealing services (such as smaller-scale conversions between different VAs or between VAs and fiat money) and more complex services (such as brokerage activities, block trading activities, and other activities of advisors or asset managers) will fall under the scope of the licensing regime for dealing.

The provision of VA custodian services as a business will be defined as - by way of business, the safekeeping of (i) VAs on behalf of clients; or (ii) instruments enabling transfer of VAs of clients (including but not limited to private keys) on behalf of clients.

Under both licensing regime, licensed or registered providers will need to meet fit-and-proper criteria and comply with a range of regulatory requirements, including (among others) those relating to financial resources, knowledge and experience, risk management, financial reporting and disclosure, conduct of business, information and notifications, and record keeping.

The licensing regimes will be fully implemented on the date the relevant statutory provisions come into effect, with no deeming arrangement.  [27 Jun 2025]

SFC and HKFE confirm implementation of new position limits for key exchange-traded derivatives on 2 July 2025

The SFC has announced that with effect from 2 July 2025, the position limits for the futures and options contracts of Hang Seng Index, Hang Seng China Enterprises Index and Hang Seng TECH Index will be increased by 50%, 108% and 43% respectively to 15,000, 25,000 and 30,000 position delta.

The Hong Kong Futures Exchange Limited (HKFE) has confirmed that regulatory approval has been obtained for the increase in position limits (see our previous update for prior developments).  Amendments to the HKFE's rules, regulations and procedures have been approved (see clean and marked-up versions), and will take effect on 2 July 2025.  [24 & 27 Jun 2025]

Government releases second policy statement to scale Hong Kong to new heights of global digital asset leadership

The Hong Kong Government has issued its second policy statement on the development of digital assets, building upon the initial policy statement issued in October 2022 (see our previous update).

The second policy statement 2.0 introduces the 'LEAP' framework:

  • Legal and regulatory streamlining: The Government is establishing a comprehensive and unified regulatory framework for digital asset service providers, covering digital asset exchanges, stablecoins issuers, digital asset dealing service providers and custodian service providers. The Financial Services and the Treasury Bureau and the HKMA will be spearheading a comprehensive legal review to facilitate the tokenisation of real-world assets (RWAs) and financial instruments, considering different aspects of tokenised bond issuances and transactions, including but not limited to settlement, registration and record requirements.
  • Expanding the suite `of tokenised products: The Government will regularise the issuance of tokenised Government bonds and incentivise the tokenisation of RWAs to enhance liquidity and accessibility through (among others) clarifying the stamp duty treatment for tokenised exchange traded funds. The Government will also promote the tokenisation of a broader range of assets and financial instruments, including in sectors such as precious metals (eg, gold), non-ferrous metals, and renewable energy (eg, solar panels).
  • People and partnership development: The Government is strengthening talent development through partnerships with industry and academia, and is positioning Hong Kong as a centre of excellence for digital asset knowledge-sharing and international co-operation, including joint research initiatives and global regulatory collaboration.  [26 Jun 2025]

HKMA clarifies CNY conversion arrangements under RMB cross-border trade settlement scheme

The HKMA has issued a circular in light of comments received on the issues and challenges faced by banks in conducting CNY conversions for customers under the RMB cross-border trade settlement scheme. The circular serves to provide the HKMA’s feedback on the issues raised and clarifications to banks on providing services under the scheme, with a view to providing a more conducive environment for banks to conduct RMB trade settlement business.

The industry comments mainly focused on alignment issues between the HKMA's circular guidance in 2010-2012 and the corresponding guidance issued by the People’s Bank of China (PBoC).  There were also suggestions to streamline relevant requirements stipulated in the HKMA circulars taking into account market developments. The HKMA has, in consultation with the PBoC, reviewed the existing HKMA circulars vis-à-vis applicable PBoC guidance.  

The HKMA advises banks that in conducting CNY conversions and offering related services to their clients, they should ensure that the relevant requirements set by the Mainland authorities are complied with. Banks are generally expected to:

  • ascertain that the CNY conversions arise from genuine and reasonable need from underlying RMB trade settlement activities;
  • put in place effective and sufficiently robust know-your-customer and due diligence procedures in preventing ineligible use of the CNY conversion arrangement, so that Mainland authorities' relevant requirements are not contravened;
  • exercise prudence and focus on the balanced development of CNY purchase and sale business, with the positions arising from related conversions to be basically squared;
  • keep proper records on transactions under the CNY conversions, and monitor and identify irregularities (and to produce such records to the relevant authorities upon request).

Further details are set out in FAQs attached to the circular. The present circular takes effect immediately and supersedes the HKMA circulars from 2010-2012 referred to above.  [26 Jun 2025]

Hong Kong strengthens role in global gold market with SGE vault launch

The Financial Services and the Treasury Bureau (FSTB) has welcomed Shanghai Gold Exchange's (SGE) launch of its first offshore certified gold vault in Hong Kong, alongside the listing of gold contracts for delivery in Hong Kong on its International Board. 

At the opening ceremony, Mr Christopher Hui, Secretary for Financial Services and the Treasury, praised the initiative as a pivotal moment in Shanghai-Hong Kong financial cooperation.  He emphasised that gold’s multifaceted role — as a commodity, reserve asset, and investment product — makes it increasingly vital amid global uncertainties.

The vault is expected to attract more international participation in SGE's trading and boost gold storage in Hong Kong, thereby driving the development of related services.  Mr Hui also noted Hong Kong’s unique advantages under the 'one country, two systems' framework, including the ability to provide comprehensive financial, logistics, and shipping services, and a deep offshore RMB liquidity pool.

This development follows the signing of the Action Plan for Collaborative Development of Shanghai and Hong Kong International Financial Centres (see our previous update). The 2024 Policy Address (see our previous update) outlined plans to establish a commodity trading ecosystem, supporting international commodity exchanges in setting up accredited warehouses in Hong Kong for storage and delivery of commodities. Hong Kong was included in the global warehousing network of the London Metal Exchange in January 2025 (see our previous update).  Seven warehouses have been approved for establishment so far, with system connections and preparations under way for commencement of operations by July 2025. 

In addition, gold is a key entry point for developing commodity trading. The FSTB established the Working Group on Promoting Gold Market Development in December 2024 (see our previous update). The goal is to formulate a plan within 2025 to increase storage capacity, optimise trading and regulatory mechanisms, expand exchange products, and enhance market promotion.  [26 Jun 2025]

HKMA and AIIB partner to support emerging Asia VC

The HKMA has announced that it has signed a partnership agreement with the Asian Infrastructure Investment Bank (AIIB) to support venture capital (VC) in emerging Asia.  Under this partnership, the HKMA and the AIIB will collaborate closely to invest in a portfolio of VC funds that prioritise investments across emerging markets in Asia.

The HKMA and the AIIB aim to jointly support the development of innovative technologies and business models for green and technology-enabled infrastructure in Asia’s emerging economies, while promoting Hong Kong’s established ecosystem for VCs and innovators across the region.  [26 Jun 2025]

SFC publishes 2024-25 annual report

The SFC has published its 2024-25 annual report, providing an overview of its work in the financial year ending 31 March 2025 and outlining its strategic priorities for the future.

The SFC's top four priorities for 2024-26 are:

  • Maintaining market resilience and mitigating harm – This includes contingency planning for extreme market events, enhancing HKEX oversight and clearing house resilience, guiding intermediaries on risk management and cybersecurity, combatting misconduct, protecting investors from suspicious activities and fraud, enhancing enforcement powers and collaboration, increasing surveillance and investigatory capabilities, continuing the reforms for over-the-counter derivatives regime and leading international standard-setting efforts.
  • Enhancing Hong Kong's global competitiveness – This includes developing Hong Kong as a premier listing platform, enhancing securities market microstructure, nurturing fixed income and currency markets, deepening Mainland-Hong Kong market connect, developing Cross-boundary Wealth Management Connect Scheme, building an offshore RMB and risk management hub, strengthening international market connectivity, facilitating growth of investment fund market, supporting phased launch of digital platform for retail funds, and further enhancing and elevating securities market operations and infrastructure.
  • Leading market transformations via technology and ESG – This includes developing virtual asset market and regulatory regimes, collaborating with industry in building tokenisation ecosystem, leading regional and global efforts in sustainable finance, growing local sustainable finance ecosystem, and stemming greenwashing.
  • Enhancing the SFC's own resilience and efficiency – This includes prudent financial control and effective resource deployment, improving operational efficiency, deploying artificial intelligence and other technologies, and guarding against cyber threats.

The report also highlights the SFC’s key initiatives taken to implement the above priorities.  [25 Jun 2025]

Senior executives from SFC and Saudi Arabia's CMA meet in Hong Kong to advance regulatory collaboration

Senior executives of the SFC and the CMA of Saudi Arabia, led by Ms Julia Leung (CEO of the SFC) and His Excellency Mr Mohammed bin Abdullah Elkuwaiz (Chairman of the CMA) respectively, met in Hong Kong to advance dialogue on regulatory collaboration and drive progress towards increased market connectivity.

At the meeting, senior executives on both sides exchanged views on a wide range of topics, including supervisory collaboration and dual listing of investment products such as exchange-traded funds and real estate investment trusts. The two sides also discussed the latest market and regulatory developments in Hong Kong and Saudi Arabia.

The meeting was followed by a Saudi-Hong Kong asset management roundtable, where Dr Kelvin Wong (Chairman of the SFC) highlighted the need to strengthen global regulatory collaboration, especially within Asia.

Around 30 senior representatives from Hong Kong's industry associations (including the Hong Kong Investment Funds Association and the Chinese Asset Management Association of Hong Kong) met with their Saudi counterparts to discuss mutually beneficial initiatives such as expanding cross-border investment opportunities and potential partnership.  [25 Jun 2025]

HKMA Chief Executive issues inSight article on stablecoins

The Chief Executive of the HKMA, Mr Eddie Yue, has published an inSight article regarding the upcoming implementation of the stablecoin licensing regime in Hong Kong, as well as stablecoins more generally. The licensing regime is expected to come into effect on 1 August 2025 and the HKMA is conducting industry consultations on detailed implementation guidelines for early adoption (see our previous update). Globally, jurisdictions like the EU and the US are advancing their own stablecoin regulations.

Mr Yue clarified the nature of stablecoins. A stablecoin is not an investment or speculative instrument, and by nature, has no room for appreciation. It is a type of blockchain-based payment means, which includes central bank digital currency networks established among central banks, tokenised deposits being explored by international banks, and the interlinkages of fast payment systems across different jurisdictions.  Each of them has its own merits with a varying degree of maturity, and the growth potential will be determined largely by market forces.

As the interface connecting traditional finance and digital assets, stablecoins present inherent and spillover risks, the effective management of which is becoming a focal point for global regulators. The HKMA has been actively participating in the work of international organisations, including the Financial Stability Board (FSB), which published the 'Global Regulatory Framework for Crypto-Asset Activities' (2023), on which Hong Kong’s regulatory regime is largely based. The HKMA is currently coordinating the FSB’s review of the implementation of the framework globally. 

Mr Yue noted that Hong Kong is among the first jurisdictions to put in place a regulatory framework for stablecoin issuers.  The framework adopts the principle of 'same activity, same risks, same regulation'. In light of the novelty and potential risks of stablecoin, the need for user protection, market capacity and long-term development, the HKMA expects to set a high bar for licensing and will only grant 'a handful of licences' initially. 

The upcoming licensing regime requires stablecoin issuers to demonstrate adequate capabilities across areas such as the management and security of reserve assets, effective price stabilisation mechanisms, comprehensive and feasible redemption policies, as well as capabilities in technological security, risk management, and anti-money laundering.  There are also additional requirements where cross-border activities are involved.  [23 Jun 2025]

SFC and HKEX issue circulars regarding HKEX rehearsals for system recovery and data centre failover on 19 July 2025

The SFC has issued a circular to remind intermediaries that The Stock Exchange of Hong Kong Limited (SEHK) will hold its annual rehearsal for emergency trading system recovery in the securities market on 19 July 2025 from 11:00am to 3:10pm.

The rehearsal will cover the following processes under the Hong Kong Investor Identification Regime:

  • submission of the BCAN-CID mapping file and reporting Forms to the data repository of the SEHK – applicable to all relevant regulated Intermediaries (RRIs); and
  • BCAN tagging for order submission to the SEHK's trading system (applicable only to RRIs that are exchange participants).

All RRIs are encouraged to take part in the rehearsal to familiarise themselves with the contingency procedures and related operational matters in the event of a service outage on the SEHK’s trading system.

Further information is set out in the SEHK's circular, which provides details of the OTP-C and OTP-CSC rehearsal for system recovery under emergency situations.

Data centre failover rehearsals are also being held on 19 July 2025 – see circulars from the SEHK, the Hong Kong Futures Exchange Limited, the Hong Kong Securities Clearing Company Limited, the HKFE Clearing Corporation Limited, the SEHK Options Clearing House Limited and the OTC Clearing Hong Kong Limited.  [23 Jun 2025]

SFC Chairman delivers speech on regulator-industry partnership

The SFC's Chairman, Dr Kelvin Wong, delivered a speech titled 'Regulator-Industry Partnership in Bolstering Hong Kong's Status as Asset Management Hub' at the Annual Conference of Hong Kong Investment Funds Association.

Dr Wong opened by reaffirming the SFC's mission to uphold robust yet adaptive regulation that promotes market development while cementing Hong Kong's position as a premier global financial hub. He emphasised that regulation should be a framework that enables rather than hinders progress.

Dr Wong then highlighted the three vital roles that asset managers play in supporting Hong Kong's position as a global asset and wealth management centre:

  • Enabling wealth creation for investors – Wealth creation is the fundamental role of asset managers and lies at the core of their mandate.  As trusted agents of clients, asset managers leverage their expertise in portfolio management and investment allocation to navigate an increasingly complex and uncertain global financial landscape and help optimise portfolio performance.
  • Driving capital formation for business growth – Asset managers are catalysts for capital formation, bridging investors with firms that fuel economic progress, which aligns with the SFC’s focus on enabling efficient capital flow for economic development. Such activities are essential to the vibrancy and innovation of our economy, particularly in capital-intensive sectors that require significant investment for research and product development. The SFC actively supports asset managers in fostering economic development and innovation by allowing listed funds to invest in alternative and private assets, while ensuring sufficient safeguards to protect investors’ interests.
  • Promoting market integrity and corporate accountability – As the agents and stewards of their clients, it is crucial for asset managers to continuously monitor and critically evaluate investee companies to ensure sound corporate governance, prioritisation of shareholders' interests, as well as responsible, transparent and accountable operations. Their active engagement drives improvements in board oversight, greater executive accountability, and effective shareholder communications. These combine to foster long-term sustainable development of companies, industries and, eventually, our economy.

Dr Wong concluded by stressing the importance of cross-jurisdictional regulatory dialogue to expand Hong Kong’s global reach and diversify its markets.  [23 Jun 2025]

HKMA and PBoC jointly announce launch of Payment Connect on 22 June 2025

The HKMA and the People’s Bank of China (PBoC) have jointly announced that Payment Connect will be launched on 22 June 2025. Payment Connect refers to the linkage between the Mainland's Internet Banking Payment System and Hong Kong's Faster Payment System, which supports secure, efficient and convenient real-time cross-boundary payment for residents and institutions in both places.  Instant small-value cross-boundary remittances can be made by inputting the recipient's mobile number or account number.

Six institutions from each of the Mainland and Hong Kong will participate in Payment Connect and more institutions will join over time.

Under the framework of the Memorandum of Understanding on Cross-Boundary Linkage of Payment Systems between the Mainland and Hong Kong signed in August 2024 (see our previous update), the PBoC and the HKMA will establish an effective collaboration mechanism for the Payment Connect to ensure the related services are operated in an orderly manner and comply with the respective legal and regulatory requirements in the two places.

The China National Clearing Center and the Hong Kong Interbank Clearing Limited will coordinate with participating institutions to provide secure and efficient cross-boundary payment services to residents in both places, ensuring the smooth operation of the system and its transactions, while actively coordinating in resolving issues which may arise.

The HKMA's Chief Executive, Mr Eddie Yue, delivered remarks at a launch ceremony held in Beijing.  [20 Jun 2025]

SFC suspends former CEO (also an RO and MIC) for 10 months for failing to discharge duties and manage risks relating to customer supplied systems and suspicious transactions monitoring

The SFC has suspended Mr Pun Hong Hai, a former responsible officer (RO), chief executive officer (CEO), and manager-in-charge (MIC) of overall management oversight at Freeman Commodities Limited (Freeman, now known as Arta Global Futures Limited), for 10 months.

The suspension follows an investigation that revealed that Mr Pun had failed to discharge his duties as an RO and a member of the senior management of Freeman to ensure that the company maintained appropriate standards of conduct and adhered to proper procedures.  He also failed to adequately manage the risks associated with Freeman’s business. Mr Pun's failures were related to the use of customer supplied systems by Freeman’s clients for placing orders and the company’s monitoring of suspicious money movements and trading patterns in client accounts between June 2017 and December 2018.

In imposing the suspension, the SFC noted the need to send a strong deterrent message to remind the market that senior management of licensed corporations will be held accountable for failing to discharge their duties.

The disciplinary action against Mr Pun is related to an ongoing disciplinary action against a related entity, and the SFC will not disclose further details until the conclusion of its action against that entity.  [19 Jun 2025]

SFST signs Action Plan for Collaborative Development of Shanghai and Hong Kong International Financial Centres and discusses collaboration between Hong Kong, Shanghai and Mainland more broadly

The Secretary for Financial Services and the Treasury (SFST), Mr Christopher Hui, attended the 2025 Lujiazui Forum and related events in Shanghai on 18 and 19 June 2025, and spoke at sessions discussing the collaboration between Shanghai and Hong Kong.

Mr Hui stated that Hong Kong and Shanghai are unlocking many more new opportunities for collaborative development with their positions as the country's 'dual engine' financial centres, providing strong support for the country's 'dual circulation' strategy. He also stated that the mutual-market access programmes between the financial markets on the Mainland and Hong Kong not only enhance the product offering for domestic and foreign investors, but also attract more capital influx into the markets of the two places, promoting long-term development of the markets.

Mr Hui discussed various current and upcoming initiatives:

  • To further enrich the offerings of its offshore RMB market to facilitate the adoption of RMB by global market participants, Hong Kong will step up efforts in four areas, namely enhancing offshore RMB liquidity, increasing products, improving infrastructure, and expanding new markets.
  • The HKMA is engaging the industry to carry out initial exploration on wholesale central bank digital currencies.
  • Hong Kong anticipates closer collaboration with Shanghai in areas such as financial innovation and green finance to achieve synergy effects.

Mr Hui signed the Action Plan for Collaborative Development of Shanghai and Hong Kong International Financial Centres, which covers a number of measures, including:

  • Supporting the Shanghai Clearing House to strengthen co-operation with Hong Kong banks and offshore Chinese banks in Hong Kong;
  • Supporting Mainland banks and financial institutions headquartered in Shanghai to set up regional headquarters in Hong Kong; and
  • Pressing ahead with the linkage of the Faster Payment System in Hong Kong with the Internet Banking Payment System on the Mainland (see 'HKMA and PBoC jointly announce launch of Payment Connect on 22 June 2025' above).  [19 Jun 2025]

HKFE updates guidelines on margin requirements

The Hong Kong Futures Exchange Limited (HKFE) has issued updated guidelines on margin requirements under Rule 617 of its Rules, Regulations, and Procedures.  The guidelines are intended to be a refresher of the relevant margin requirements in view of market practices and the SFC's latest risk management guidelines of August 2023.  To the extent there is any discrepancy with what is set out in the HKFE's previous circular dated 22 June 2017 (MO/DT/089/17), the present guidelines shall prevail.

The HKFE understands that some exchange participants (EPs) may need time to review their current set up and make necessary changes to their systems and procedures. They are therefore expected to have implemented appropriate measures to fully comply with the present guidelines by 18 July 2025.

Under Rule 617, EPs are required to ensure that sufficient collateral to cover the minimum margin requirements is received from a client before transacting for that client. EPs may nevertheless transact for an established client who has represented to them that the funds necessary to fully satisfy his margin obligations will be immediately transmitted, even though adequate collateral to cover the client’s minimum margin requirement has not been received, provided that the conditions under Rule 617(b) are satisfied.  An established client refers to one who has demonstrated a record of consistently meeting margin obligations and maintaining a sound financial position.

The circular outlines criteria for assessing established clients, margin requirements for 'Exclusive Day Traders', trading limits, and annual review and record keeping.  [18 Jun 2025]

HKSCC provides additional information and rule updates ahead of launch of enhancement to settlement arrangement for multi-counter eligible securities on 30 June 2025

The Hong Kong Securities Clearing Company Limited (HKSCC) has issued a circular to provide further information regarding the launch of the enhancement of the settlement arrangement for multi-counter eligible securities on 30 June 2025 (see our previous update).

  • Clearing participants are strongly encouraged to participate in the post release verification on 28 June 2025 (an information package is provided).
  • The list of multi-counter eligible securities that will be included in the migration of enhancement are set out in Appendix A to the circular.         
  • Clearing participants are reminded to review their funding arrangement (where applicable), their adequacy of funding and banking facilities for RMB and USD. Participants which rarely settled in RMB/USD in the past should ensure the availability of their RMB/USD bank accounts designated to settle their settlement obligations against HKSCC and ensure that these accounts are not dormant.        
  • Clearing participants are reminded to review their client statement for compliance with applicable rules relating to contract notes, statements of accounts and receipts (see SFC's FAQs discussed in our previous update). 
  • Clearing participants can refer to the HKEX FAQs and migration sample available on the web corner for more details regarding the migration.

The HKSCC has also issued a circular with supplemental information on the arrangements applicable to multi-counter exchange traded funds and multi-counter securities in the underlying basket following the enhancement.

In addition, amendments have been made to the following (to take effect on 30 June 2025 upon the launch of the enhancement):

HKMA publishes circular to AMBs regarding latest version of FX Global Code

The HKMA has issued a circular to approved money brokers (AMBs) regarding the latest version of the FX Global Code published by the Global Foreign Exchange Committee (GFXC) on 24 January 2025. The FX Global Code, first published in May 2017 and reviewed every three years, represents a single set of global principles of good practices for the wholesale foreign exchange (FX) market.

The recent update to the code refines five of its 55 principles, specifically, principles 9, 10, 35, 50 and 51, to strengthen the guidance on FX settlement risk mitigation practices and to enhance transparency around certain types of execution activity as well as utilisation of FX data.

The GFXC is encouraging market participants to align their practices with these updates and renew their Statement of Commitment. The Treasury Markets Association (TMA) supports the renewal of the Statement of Commitment. The FX Global Code has been part of the TMA's Code of Conduct and Practice, which AMBs are required to comply with pursuant to a condition attached to their approval.

The HKMA encourages AMBs to demonstrate their commitment to the FX Global Code by issuing or renewing the Statement of Commitment as provided in Annex 3 of the FX Global Code and providing it to the TMA.  

The HKMA issued a circular on 28 May 2025 to authorised institutions about the latest FX Global Code (see our previous update).  [16 Jun 2025]

SFC publishes consultation conclusions on proposed limits for three types of fees under upcoming USM regime

The SFC has released the conclusions to its consultation (see our previous update) on the proposed fee limits for approved securities registrars under the uncertificated securities market (USM) regime, set to launch in early 2026 (see our previous update).

Limits were proposed for three types of fees: the USI set-up fee, the dematerialisation fee, and the transfer and registration fee. The respondents to the conclusion were generally supportive of the proposed limits and the SFC will proceed to incorporate the limits into the Code of Conduct for Approved Securities Registrars, with some revisions to the descriptions in Schedule 1 to the code.

The respondents considered that the fee limits establish a fair and transparent fee structure, protect small shareholders’ interests, and make it easy for investors to estimate expenses, while also facilitating the development of USM and the securities market.

The SFC has updated its dedicated USM webpage to include information about the limits in the sections on frequently asked questions and list of consultation papers.

In the coming months, the SFC will continue to collaborate with the HKEX and the Federation of Share Registrars Limited to raise stakeholders’ awareness and enhance their understanding of the new regime.  [13 Jun 2025]

Banking (Amendment) Ordinance published to introduce voluntary mechanism for authorised institutions to request or disclose information for detection or prevention of crimes

The Banking (Amendment) Ordinance 2025, which introduces a voluntary mechanism for authorised institutions to request or disclose information for the detection or prevention of crimes, has been published. The proposed amendments were passed by the Legislative Council on 4 June 2025 (see our previous update), and a commencement date will be announced separately.

The mechanism includes safe harbour provisions for authorised institutions disclosing information or using information so disclosed by other authorised institutions.  [13 Jun 2025]

SFC publishes revised Guidance Note on Position Limits and Large Open Position Reporting Requirements to incorporate guidance on position limit increases for key stock index derivatives

The SFC has published in the Gazette its revised Guidance Note on Position Limits and Large Open Position Reporting Requirements. The revised guidance note will come into effect on 2 July 2025 and will supersede all previous versions.

The revisions are to incorporate guidance relating to the position limit increases for key stock index derivatives, following a consultation which concluded in April 2025 (see our previous update).  [13 Jun 2025]

SFC proposes further restrictions under SFO and AMLO over use of misleading names

To enhance investor protection, the SFC has launched a consultation aimed at restricting unregulated entities from improperly adopting names that may give the public a false impression that they are regulated entities. Feedback on the proposals is required to be submitted by 11 August 2025.

The SFC proposes expanding the current list of restricted titles under the Securities and Futures Ordinance (SFO) to cater for recent developments, including the emergence of virtual asset trading platforms (VATPs). In parallel, the SFC proposes to include similar restrictions under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO), as the VATP regime is set out under both ordinances.

In addition, the proposal will extend the restrictions to commonly used terms that are similar in meaning to 'exchange' (such as 'trading platform') and those that refer to some of the financial products and platforms regulated under the SFO (such as 'virtual assets' and 'clearing facilities').  The proposal will also cover titles that may imply an association with established exchanges, VATPs and other similar entities.  [12 Jun 2025]

HKMA issues circular to clarify promotion and sale arrangements under Southbound Scheme of Cross-boundary Wealth Management Connect Pilot Scheme

The HKMA has issued a circular to clarify the promotion and sale arrangements under the Southbound Scheme of the Cross-boundary Wealth Management Connect Pilot Scheme in the Guangdong-Hong Kong-Macao Greater Bay Area, following the amendments to the implementation arrangements for the pilot scheme issued in January 2024 and the subsequent guidance (see our previous updates in January 2024, May 2024 and March 2025).

Under the Southbound Scheme, upon request of a Southbound Scheme customer, a Mainland partner bank can assist the customer in setting up a three-party dialogue (online, teleconference or video conference) with the Hong Kong bank in the place of business of the Mainland partner bank on the Mainland in relation to the Southbound Scheme services, provided that the Mainland partner bank has complied with relevant regulatory requirements on the Mainland, and the Hong Kong bank representatives can, in such three-party dialogue, introduce eligible wealth management products under the Southbound Scheme to the customer. 

The transactions carried out by Southbound Scheme investors via their dedicated investment accounts are subject to the protection of the laws and regulations in Hong Kong, including (among others) suitability requirements where applicable. Hong Kong banks should set out clearly each party’s responsibilities and obligations in the cooperation agreement with the Mainland partner bank regarding relevant cooperation

The arrangements relating to three-party dialogue under the Northbound Scheme are set out in Q29 of the HKMA's frequently asked questions.  [12 Jun 2025]

SFC Chairman delivers speech on the role of traders in driving the future of Hong Kong's capital markets

The SFC's Chairman, Dr Kelvin Wong, delivered a speech titled 'Traders – Driving the Future of Hong Kong’s Capital Markets' at Asia Trader Forum Annual Meeting & Equity Trading Summit 2025. 

Dr Wong outlined the SFC’s vision and regulatory approach, and discussed the important role of traders and how it aligns with the SFC's vision to develop markets, the opportunities and challenges in today’s markets, and the SFC’s expectations on market participants (including traders) to drive a better future.

Dr Wong highlighted some of the SFC's current initiatives:

  • In the medium to long term, the SFC is reviewing the board lot arrangement, to make it easier to trade high-priced stocks and odd lots, enhancing market liquidity.
  • The SFC is working with the HKEX to review the initial public offering price discovery process and exploring ways to reduce costs for market participants. These efforts are part of the SFC's commitment to creating a more efficient and competitive market environment.
  • The SFC is considering comprehensive enhancements to the Stock Connect, such as relaxing Northbound investor eligibility for Mainland-listed growth stocks and enabling offshore investors to conduct block trades on Mainland exchanges, as well as including more products, such as RMB counters, real estate investment trusts and exchange-traded funds to further integrate the Mainland and Hong Kong markets.

Dr Wong also discussed the SFC's expectations on market participants and traders to manage risks and build resilience, which contribute to the overall stability of the market. 

With regard to generative artificial intelligence (AI), the SFC operates under a clear philosophy – to promote the responsible innovation and deployment of technology – to leverage technology to boost market efficiency, transparency, cost-savings and the investor experience, while at the same time safeguarding market integrity and stability.  The SFC actively encourages and supports licensed corporations to use technology responsibly to innovate, deliver better products and services, and streamline their internal processes.  To address the risks of generative AI, the SFC issued guidance in November 2024 outlining a risk-based approach, where licensed corporations are required to validate the output of generative AI models, closely monitor model performance, manage the key risks of such models, and ensure that senior management is accountable for internal controls and oversight (see our previous update).  [12 Jun 2025]

HKEX clarifies position on use of non-standard networking technologies for trading on Exchanges

The Stock Exchange of Hong Kong Limited (SEHK) and the Hong Kong Futures Exchange Limited (HKFE) (collectively, Exchanges) have issued circulars to their exchange participants and the SEHK's options trading exchange participants (collectively, Participants) to clarify their position regarding the use of non-standard networking technologies when Participants connect to their trading platforms.

The Exchanges remind Participants to abide by the following two main principles when developing trading technologies (including order placement strategies and networking techniques) for trading on the Exchanges:

  • Not to interfere with other Participants' activities at both the platform and network level; and
  • Not to subject the Exchanges' platforms, networks or systems to undue risks or operational burden.

The following activities are considered to be in violation of the above principles and inconsistent with the proper usage of the Exchanges' trading systems, and are therefore prohibited:

  • Deliberate fragmentation of Transmission Control Protocol (TCP) messages (packet splitting);
  • Deliberate retransmission of TCP or application layer messages;
  • Deliberate transmission of corrupt network packets;
  • Inappropriate/excessive use of non-trading messages such as heartbeat, connection management; and
  • Hold up or interfere with normal queuing and processing of network or application messages.

The above list of activities is not exhaustive and other behaviours that contradict the two main principles above would also be prohibited. Any attempt to carry out prohibited activities may give rise to investigation and disciplinary action by the Exchanges where grounds exist.

Participants of the SEHK are reminded to comply with the SEHK's rules, procedures and guidance. Participants of the HKFE and options trading exchange participants of the SEHK are reminded that they are bound by their obligations under the HKATS Subscription and Licence Agreement and should comply with the relevant rules of their Exchanges.  [10 Jun 2025]

HKEX issues reminders regarding severe weather trading

The Stock Exchange of Hong Kong Limited has issued circulars to exchange participants and options trading exchange participants to remind them to prepare for any severe weather trading day (SWT Day) in the future. The severe weather trading arrangement has been effective since 23 September 2024 (see our previous update).

  • Operational arrangements – Participants are required to support trading activities during severe weather conditions as they normally would do on a regular trading day. A summary of operational arrangements in the Hong Kong securities market, Northbound Trading under Stock Connect, and stock options is provided in Attachment 1 to the circulars.
  • Reconfirmation on operational and system readiness – To ensure safety, remote working and the use of online services are strongly encouraged on a SWT Day. Participants should perform necessary checks to ensure their operational and system readiness for SWT. This includes, but is not limited to, the items set out in Attachment 2 to the circulars.

Similar circulars have been issued by the Hong Kong Futures Exchange Limited, the Hong Kong Securities Clearing Company Limited, the HKFE Clearing Corporation Limited, and The SEHK Options Clearing House Limited.  [9 Jun 2025]

SFC issues circular to LCs on findings of review of internal controls on client asset protection and sets out expected regulatory standards

The SFC has issued a circular to highlight the red flags and control deficiencies found in certain asset misappropriation cases that licensed corporations (LCs) should remain vigilant about. It also shares key findings from its circularisation exercise on client accounts of selected small to medium-sized securities brokers commenced in February 2024 and its review of these brokers' internal controls regarding client asset protection (Exercise) (see our previous update), and sets forth the respective expected regulatory standards on LCs. 

The reported cases involved fraudsters impersonating LCs' clients to issue fraudulent instructions or LCs' staff gaining control of the firms' bank accounts to effect unauthorised payments. The red flags and control deficiencies of the reported cases are set out in Appendix 1, which include the following:

  • Fraudsters impersonating clients to issue counterfeit instructions by sending emails using email addresses which closely resembled legitimate ones of clients or hacking into clients' email accounts;
  • Fraudsters forging clients' signatures to issue counterfeit written instructions, which were sent to LCs by post, fax or email. Examples of such instructions include (among others) amending client particulars, requesting LCs to execute transactions involving significant amounts of client assets, and transferring client money to third-party bank accounts purportedly opened in the clients' names but controlled by the fraudsters.

The SFC has also set out the key findings from the Exercise and the corresponding expected regulatory standards on LCs in Appendix 2. LCs should put in place internal control procedures to protect their operations and clients from theft, fraud and other dishonest acts. They should implement adequate controls to protect client assets, especially in the following areas:

  • Amendments to client particulars;
  • Handling of email requests;
  • Third-party deposits and payments and collection of physical scrips by third parties;
  • Operation of bank accounts; and
  • Dormant accounts.

The SFC also reminds LCs to take appropriate steps to raise their clients' awareness about protecting their interests.

The SFC reiterates that senior management of LCs, including responsible officers and managers-in-charge of core functions, bear primary responsibility for maintaining appropriate standards of conduct and implementing proper policies and procedures to adequately protect client assets and diligently supervise their staff.

The SFC is particularly concerned about some LCs' repeated control deficiencies in certain key areas, and will not hesitate to take action against an LC and its senior management in appropriate cases, including imposing conditions on the LC's licence.  [6 Jun 2025]

SFC urges LCs to enhance protection for clients against rising cases of SMS phishing

The SFC has issued a circular to provide licensed corporations (LCs) with guidance on appropriate measures to prevent unauthorised trading in client accounts, in light of a recent increase in attacks perpetrated by fraudsters through hyperlinks in phishing mobile text messages (commonly known as SMS phishing).

In the recent unauthorised trading incidents, the SFC suspects that, after deceiving clients into clicking on hyperlinks embedded in mobile text messages and redirecting them to websites resembling the LCs', fraudsters intercepted clients' usernames, login passwords and authentication data, thereby gaining access to the client accounts at LCs to conduct unauthorised trading.

In light of the above, the SFC expects LCs to adopt the following measures, among others, in preventing and handling unauthorised trading incidents:

  • Help their clients verify the identity of text message senders and to prevent impersonation by fraudsters by signing up for the SMS Sender Registration Scheme administered by the Office of the Communications Authority (which enables registered participants to send SMS messages with the prefix '#' to help recipients verify the sender’s identity and prevent impersonation);
  • Implement an effective monitoring and surveillance mechanism to identify red flags and detect unauthorised access to their clients' accounts, promptly file suspicious transaction reports to the Joint Financial Intelligence Unit, and immediately report to the SFC any material failure, error or defect in the operation or functioning of its systems or identification of suspicious transactions as required under paragraph 12.5 of the SFC's main code of conduct; and
  • Raise clients' awareness by stepping up client outreach and engagement efforts, particularly if the LCs have encountered unauthorised trading incidents or are on notice that such incidents are occurring within the industry, including encouraging them to make use of Scameter and the Scameter+ mobile application.

The SFC reminds LCs that their senior management (particularly the manager-in-charge of information technology) is ultimately responsible for the identification, monitoring and mitigation of the cybersecurity risks faced by their LCs and the implementation of the regulatory expectations in relation to cybersecurity.

The Stock Exchange of Hong Kong Limited and the Hong Kong Futures Exchange Limited have issued circulars reminding exchange participants to follow the SFC's guidance in the above circular and implement appropriate measures to prevent unauthorised trading in their clients' accounts.  [6 Jun 2025]

Government gazettes two notices in relation to Stablecoins Ordinance

The Government has gazetted two notices relating to the Stablecoins Ordinance (SO):

  • The date of commencement of the SO is 1 August 2025; and
  • The notice explains that the prohibition on offering stablecoins or holding out as offering stablecoins under section 9(1) of the SO does not apply to offerings made to professional investors (within the meaning of section 1 of Part 1 of Schedule 1 to the Securities and Futures Ordinance (Cap. 571)).  [6 Jun 2025]

SFC joins global regulatory effort to curb activities of unauthorised finfluencers

The SFC is collaborating with regulators across the globe to tackle the activities of unlawful financial influencers (finfluencers) who promote financial products or services illegally on social media. This initiative, part of the 'Global Week of Action Against Unlawful Finfluencers,' involves using supervisory and enforcement powers to disrupt these illegal activities and educate investors about the risks associated with misleading content from finfluencers. The SFC's Chief Executive Officer, Ms Julia Leung, emphasised the importance of personal responsibility among investors, urging them to verify the regulatory status and trustworthiness of finfluencers and conduct thorough due diligence before making investment decisions.

The SFC is actively involved in several initiatives to combat unlawful activities by finfluencers and protect investors:

  • On the supervisory front, the SFC commenced a thematic inspection in April 2025 to assess securities brokers' compliance with regulatory requirements when engaging finfluencers and digital platforms.
  • Additionally, enforcement actions have included suspending licenses and prosecuting finfluencers for unlicensed activities. The SFC also engaged social media platforms to remove posts and profiles impersonating public figures and promoting unauthorised investment products, as well as commencing criminal prosecution against finfluencers for unlicensed regulated activities (for example, see our previous update).
  • In terms of investor education, the SFC has been actively warning the public about scams through its 'Don't be Sucker' anti-scam campaign, which includes various educational efforts to build awareness and resilience among investors.  [6 Jun 2025]

HKEX issues circular regarding phase 1 implementation of minimum spreads reduction

The Stock Exchange of Hong Kong Limited (SEHK) issued a circular regarding the phase 1 implementation of minimum spreads reduction in the Hong Kong securities market.

The circular outlines key preparatory steps, including the optional end-to-end (E2E) test, which ends on 6 June 2025. Exchange participants (EPs) are encouraged to participate in this test to identify and address potential issues before the mandatory market rehearsal (MR) on 21 June 2025. EPs must follow the MR guidelines and submit the contact form by 13 June 2025, designating their contact persons for the MR.

An information package sets out the schedules, guidelines and rundowns of the MR is now available for download from the web corner of the reduction of minimum spreads. All EPs are advised to follow the MR guidelines and activity rundown, including the following important points.

Following the MR, EPs are required to complete and return the feedback form by 25 June 2025. The launch date of phase 1 will be announced subject to market readiness and regulatory approvals. Subject to market readiness and regulatory approvals, the SEHK will announce the launch date of the phase 1 in due course.  [5 Jun 2025]

FSTB secretary discusses prospective developments to Hong Kong's VA markets

In a recent Legislative Council session, the Secretary for Financial Services and the Treasury, Mr Christopher Hui, highlighted a few prospective developments in the virtual asset (VA) space:

  • First, the SFC is considering introducing VA derivatives trading for professional investors, accompanied by robust risk management measures to ensure orderly, transparent, and safe transactions. This initiative aims to enrich the product options available in Hong Kong's market.
  • Secondly, in response to the latest developments in the VA market, Mr Hui noted that the Financial Services and the Treasury Bureau (FSTB) will issue a second policy statement on VA development, outlining future policy directions. This includes leveraging traditional financial services and innovative technologies to enhance the security and flexibility of real economy activities and encouraging both local and international companies to explore VA technologies.
  • Finally, to attract more large-scale international fintech companies to establish presence in Hong Kong, the Office for Attracting Strategic Enterprises (OASES) offers one-stop services and special facilitation measures. The FSTB and OASES will also further enhance the preferential tax regimes for funds, single family offices and carried interest, including the inclusion of VAs as qualifying transactions eligible for tax concessions.  [4 Jun 2025]

Hong Kong government welcomes passage of Banking (Amendment) Bill 2025

The Hong Kong Government welcomed the passage of the Banking (Amendment) Bill 2025 by the Legislative Council on 4 June 2025. This bill introduces a voluntary mechanism for banks and relevant law enforcement agencies to share account information swiftly and securely via electronic means. The aim is to enhance the efficiency in detecting and preventing crimes such as money laundering, terrorist financing, and the proliferation of weapons of mass destruction (see our previous update).

The new mechanism allows banks to disclose relevant information through secure platforms designated by the HKMA, providing legal protection for these disclosures. This initiative is expected to help intercept illicit funds and expedite intelligence gathering, thereby offering better protection to the public from fraud and associated money laundering activities. The HKMA will work closely with the Hong Kong police force and the banking sector to implement the new mechanism, including system upgrades and practical guidelines. The Amendment Ordinance will come into effect later this year, with the commencement date to be announced separately.  [4 Jun 2025]

SFC bans former RO for six months for management and reporting failures

The SFC announces that it has banned Ms Wong Lai Suen, a former responsible officer (RO) and executive director of MTF Securities Limited (MTF), from re-entering the industry for six months. Ms Wong was also MTF’s manager-in-charge of management and operations, finance, and information technology at different intervals.

This decision follows an investigation revealing that Wong failed to manage credit risks and identify suspicious trading patterns. Specifically, MTF granted substantial trading limits to three clients without proper due diligence, leading to transactions that suggested potential market misconduct and money laundering. MTF did not report these suspicious activities to the relevant authorities in a timely manner.

The SFC attributed these failures to Wong's inability to fulfill her duties as a senior manager. The commission emphasised the importance of independent judgment and proper due diligence by senior management to prevent market misconduct and money laundering. Despite Wong's cooperation during the investigation and her clean disciplinary record, the SFC decided on a six-month ban to send a strong deterrent message to the market.  [4 Jun 2025]

Singapore

MAS: Response to letter on stronger safeguards for bank transfers

MAS has published its response to a forum letter calling for the implementation of additional safeguards, such as mandatory name verification, for large bank transfers. MAS stated that it will consider the suggestion as part of efforts to better protect customers against fraudulent or erroneous transfers.  [26 Jun 2025]

MAS/ABS announce new entity to govern national payment schemes

MAS and the Association of Banks in Singapore (ABS) have jointly announced the incorporation of the Singapore Payments Network (SPaN), which will administer and govern Singapore’s national payment schemes.

SPaN has been set up as a not-for-profit company limited by guarantee to drive national payments objectives. The initial members of the company are MAS and the domestic systemically important banks (D-SIBs). SPaN aims to provide strong governance over national and cross border payment schemes, promote continuous payments innovation and encourage active collaboration among key industry players.  [25 Jun 2025]

MAS clarifies regulatory regime for digital token service providers

MAS has issued clarifications about the applicable scope for its Digital Token Service Providers (DTSPs) regime.

From 30 June 2025, DTSPs providing services solely to customers outside of Singapore relating to digital payment tokens and tokens of capital market products will need to be licensed. MAS comments that it has set a high bar for licensing and will generally not issue a licence. The regulator notes that the money laundering risks are higher in such business models and if their substantive regulated activity is outside of Singapore, MAS is unable to effectively supervise such persons. Without a licence, such DTSPs will have to cease their regulated activities. 

Providers of services for digital payment tokens or tokens of capital market products that serve customers in Singapore are already subject to regulation and there is no change to what the licensed providers can do. Such providers which serve customers in Singapore may also provide services to customers outside of Singapore.

Providers of services in relation to other tokens, such as those only used as utility and governance tokens, are not subject to licensing or regulation under the new regime, and hence are not impacted.

Due to the higher risks presented by the specific circumstances set out above, existing DTSPs serving only customers outside of Singapore will be required to cease this activity when the regime comes into effect on 30 June 2025. MAS had reached out to persons who, based on information available to us, may be affected by the DTSP regime to clarify this policy position and to discuss their plans for an orderly wind-down of the activity.  [6 Jun 2025]

MAS blocks unregulated overseas online trading platforms

MAS has announced that the websites of two unregulated trading platforms are to be blocked with effect from 20 June 2025 as they have been identified as being in breach of the Securities and Futures Act 2001.  [6 Jun 2025]

Malaysia

SCM consults on enhancements to regulatory framework for DAX

The SCM has published a consultation paper seeking feedback on proposed enhancements to the regulatory framework for Digital Asset Exchange (DAX). The proposals aim to enhance the competitiveness of Malaysia’s regulated digital asset market, improve investor protection, and strengthen the resilience and integrity of DAX operators.

The consultation covers:

  • liberalisation of the framework for listing of digital assets on DAX, subject to meeting certain minimum criteria;
  • enhancing of requirements on safeguarding client assets and governance; and
  • strengthening requirements for DAX operators, including the need to meet certain minimum financial criteria.

Feedback to the consultation is requested by 11 August 2025.  [30 Jun 2025]

SCM: Guidelines on product governance

The SCM has published a set of guidelines on product governance aimed at strengthening investor protection as well as encouraging responsible product development and distribution in the capital market.

Among other measures, the guidelines:

  • require product issuers and distributors to prioritise investors’ interests when designing and distributing unlisted capital market products, reflecting this in its controls, policies and procedures (CPPs);
  • requires firms to put in place CPPs that improve product suitability for the intended target market and proactively identify and prevent potential harm to investors;
  • place greater emphasis on board and management’s responsibilities by holding them accountable for product design and distribution; and
  • require collaborative relationship between the product issuers and distributors to share information in respect of the appropriateness of target market to ensure the product continues to serve its intended purpose.

The guidelines will come into effect on 2 January 2026.  [24 Jun 2025]

SCM holds fair to educate investors and improve scam awareness

The SCM held a three-day fair in the east coast region to boost investment knowledge and improve scam awareness among investors. The event gathered Government officials, capital market industry players and regulators under one roof as part of the SCM’s investor outreach initiative.

In his speech at the event, SCM Executive Chair Mohammad Faiz highlighted that the regulator had seen a surge in complaints and enquiries, with 3,602 complaints and enquiries received on scams and unlicensed activities in 2024, a 10% increase compared to 2023. As of May 2025, the SCM has already received 1,218 complaints and enquiries.  [20 Jun 2025]

BNM: Sasana Symposium 2025

BNM has published an overview of the Sasana Symposium 2025, which took place on 17 and 18 June 2025. With opening remarks by Governor Abdul Rasheed Ghaffour, the event brought together policymakers, industry leaders, academia and representatives from society with a view to taking collective action to advance structural reforms for Malaysia's long-term resilience.

Discussions centred around key economic and financial issues, including digital assets, inflation and the cost of living, social safety nets, medical and healthcare costs and climate finance.

A highlight of the event was the launch of the Digital Asset Innovation Hub. The hub is intended to stimulate financial innovation by providing a controlled environment for applicants to test new ideas and provide input to fine-tune regulatory and security frameworks.  [17 Jun 2025]

SCM MD discusses family office incentives

The SCM has published a special address by its Managing Director, Datin Paduka Azalina Adham, delivered at the Malaysia-Singapore Chinese Chambers of Commerce Business Forum 2025. She outlined how the Malaysia Single Family Office (SFO) Incentive Scheme addresses the needs of Singaporean business families, in particular, those with cross-border operations or strong connections to Malaysia.  [17 Jun 2025]

BNM: Full rollout of the QRI Programme

BNM has announced the full rollout of the Qualified Resident Investor (QRI) Programme for eligible corporates, effective 1 July 2025. This rollout builds on the pilot programme which was introduced in April 2024. It will be available until 30 June 2028.  [12 Jun 2025]

SCM alerts public to cloned Public Register scam

The SCM has issued a warning to the public regarding a new investment scam, which involves a cloned version of the SCM’s Public Register of License Holders and Registered Persons. The scammers claim to represent entities purportedly licensed by the SCM and direct potential victims to a fraudulent website that mimics the official Public Register portal. Upon entering the name of the fake entity into the cloned site, the search result will show that the fake entity is legitimately licensed by the SCM. Victims are then persuaded to transfer funds into mule bank accounts allegedly for the purpose of investing.  [5 Jun 2025]

Thailand

SECT supports IOSCO’s initiative to promote collaboration in combating online investment scams

The SECT has announced that it supports the International Organization of Securities Commissions’ (IOSCO) request for online platform providers to collaborate with IOSCO member regulators in their operating jurisdictions to prevent and combat online investment scams.

The SECT highlights IOSCO's recent work in this area, including the launch of the International Securities and Commodities Alerts Network (I-SCAN), which is designed to collect data on behaviours indicative of investment fraud, unlicensed companies, and other suspicious activities reported by member countries.  [4 Jun 2025]

India

RBI issues directions on due diligence of ATOs

RBI has issued Reserve Bank of India [Aadhaar Enabled Payment System (AePS) – Due Diligence of AePS Touchpoint Operators] Directions, 2025.

RBI has issued draft directions on due diligence of AePS on Bank’s website on July 31, 2024, for stakeholder comments. The Directions cover: due diligence requirements applicable to AePS Touchpoint Operator (ATOs) and risk management instructions governing the activities of ATOs.

The directions shall come into effect from 1 January 2026.  [27 Jun 2025]

SEBI: Timelines for rebalancing of portfolios of mutual fund schemes – passive breaches

SEBI has issued a circular confirming that paragraph 2.9 of its master circular for mutual funds is applicable to all types of passive breaches. Paragraph 2.9 provides timelines for the rebalancing of portfolios of mutual fund schemes in the event of deviation from mandated asset allocation due to passive breaches.  [26 Jun 2025]

RBI implements certain recommendations of working group concerning trading and settlement timings

The RBI has announced its decision to implement a number of recommendations made by a working group set up to undertake a comprehensive review of trading and settlement timings of financial markets regulated by the RBI. The working group provided recommendations aimed at facilitating further market development, price discovery, and optimisation of liquidity requirements. The RBI will decide on other recommendations not covered by this announcement in due course.  [25 Jun 2025]

SEBI consults on guidelines for responsible use of AI/ML in securities market

SEBI has published a consultation on a set of proposed guiding principles for the responsible usage of AI and machine learning (ML) applications and models in securities markets. The principles are intended to optimise benefits and minimise potential risks associated with the integration of AI/ML based applications in securities markets to safeguard investor protection, market integrity and financial stability. Responses to the consultation are requested by 11 July 2025.  [20 Jun 2025]

SEBI consults on extending certain flexibilities under investor accreditation framework

SEBI has published a consultation on extending certain flexibilities under the investor accreditation framework. The consultation contains proposals to:

  • leverage 'know your customer' (KYC) registration agencies (KRAs) as accreditation agencies; and
  • facilitate faster and easier onboarding of accredited investors.

Responses are requested by 8 July 2025.  [17 Jun 2025]

RBI consults on draft IRD Directions

The RBI has issued for consultation the Draft Master Direction - Reserve Bank of India (Rupee Interest Rate Derivatives) Directions, 2025 (IRD Directions).

The proposed changes include:

  • amendments to better align the regulatory framework with the market and other related developments;
  • amendments to reporting requirements to reduce the compliance burden; and
  • the introduction of a requirement for reporting of IRD transactions undertaken globally, with a view to enhancing transparency in the Rupee IRD market.

Feedback requested by 7 July 2025.  [16 Jun 2025]

RBI: ETP Directions 2025

The RBI has published the Master Direction – Reserve Bank of India (Electronic Trading Platforms) Directions, 2025. The Directions cover:

  • the eligibility criteria for authorisation as an electronic trading platform (ETP);
  • granting and cancellation of authorisation;
  • the operating framework;
  • reporting requirements; and
  • requirements for an ETP operator with regard to termination.

The Directions have immediate effect.  [16 Jun 2025]

SEBI consults on mandating periodic disclosure requirements for SDIs

SEBI has published for consultation a draft circular mandating periodic disclosure requirements for Securitised Debt Instruments (SDIs).

Responses are requested by 7 July 2025.  [16 Jun 2025]

SEBI publishes investor charters for REITs and InvITs

SEBI has published investor charters for real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) in a move aimed at enhancing financial consumer protection alongside enhanced financial inclusion and financial literacy. The circulars have immediate effect.  [12 Jun 2025]

SEBI releases framework for ESG debt securities (other than green debt securities)

SEBI has issued a circular on its framework for ESG debt securities other than green debt securities. The framework covers: initial disclosure requirements for the issue and listing of social bonds and sustainability-linked bonds; continuous disclosure requirements; and independent third-party review.  [5 Jun 2025]

Philippines

BSP, SECP, IC, and PDIC launch consumer empowerment and anti-scam campaign

The Financial Sector Forum (FSF) has launched the 2025 'Protect Your Money' information campaign to empower financial consumers and combat scams. The FSF's members – the BSP, IC, PDIC), and SECP – each have a role in implementing the campaign.

The campaign will share essential financial insights across social media, text messages, radio, printed materials in high-traffic areas, and ATMs. It will feature practical guides for safe transactions, red flags for financial scams, and redress options.  [18 Jun 2025]

BSP issues implementing rules on the Anti-Financial Account Scamming Act

The BSP has released implementing rules in respect of the Anti-Financial Account Scamming Act, thereby giving effect to the Act which aims to prevent the misuse of financial accounts in fraud and scams like phishing and vishing. It also defines and penalises social engineering schemes, money mule activities, and related offenses. These include those committed using advances in technology, which were previously not covered by existing cybercrime laws in the Philippines.

The BSP has issued three circulars to implement the Act:

  • The IT Risk Management Regulations which reinforce the responsibility of BSP-Supervised Institutions (BSIs) to strengthen fraud prevention and detection.
  • Rules on Financial Account Inquiry and Information Sharing which outline the BSP’s authority to inquire into financial accounts linked to scams.
  • Regulations on Temporary Holding of Disputed Funds and Coordinated Verification Process which mandate BSIs, including clearing switch operators, to implement a real-time or near-real-time automated system to track disputed transactions within one year of the regulations’ effectivity.  [11 Jun 2025]