The Zhitong Finance App learned that the Hong Kong Securities Regulatory Commission published a consultation summary on legislative proposals that further restrict unregulated institutions from improperly adopting names, which may cause the public to misunderstand them as regulated institutions. Respondents to this consultation broadly supported the expansion of the current list of restricted titles under the Securities and Futures Ordinance and the introduction of similar provisions under the Anti-Money Laundering and Terrorist Financing Regulations (“Anti-Money Laundering Regulations”). Respondents also proposed the establishment of a mechanism to expedite the updating of the list of restricted titles. The Securities Regulatory Commission agreed, and the relevant proposals have been revised accordingly.
After considering the market response, the Hong Kong Securities Regulatory Commission will begin finalizing legislative amendments to the Securities and Futures Ordinance and the Anti-Money Laundering Ordinance. The goal is to submit the draft to the Legislative Council for review and approval.
According to reports, section 34 of the Securities and Futures Ordinance currently makes a list, and the names in it can only be used if approved by the Securities Regulatory Commission (e.g. “stock exchange” and “commodity exchange”). The proposal would expand the scope of the provision to include: (i) titles other than “exchange”; (ii) titles which more appropriately describe certain financial products subject to the Securities and Futures Ordinance; (iii) titles that refer more specifically to settlement operations in general; and (iv) titles containing names or abbreviations of well-known or established operations. The new provisions under the Anti-Money Laundering Regulations focus on virtual asset trading platforms and virtual assets that are unrelated to securities or futures contracts and can be traded or settled through virtual asset trading platforms.
Mr. Leung Chung-yin, Executive Director of the Market Surveillance Department of the Hong Kong Securities Regulatory Commission, said, “The proposal received widespread support, highlighting the importance of protecting investors from possible misunderstandings about the regulatory status of institutions due to certain names. The proposed revisions would strengthen the restrictions and allow for a more rapid update of the list of restricted titles. As the financial markets and the vocabulary used by market participants continue to evolve, this will further enhance investor protection.”