Hong Kong Securities and Futures Commission’s strategic priorities from 2024 to 2026

Source: Bailu Parlor

Hong Kong’s goal has always been to consolidate its position as a global financial center. In the past few years, changes in policies and the world economic environment have caused Hong Kong to be known as a "financial ruin". Therefore, the Hong Kong government has vigorously relaxed Hong Kong policies and strived to promote development in many aspects to help Hong Kong recover.

On January 24, the Hong Kong Securities and Futures Commission released the "Strategic Focus from 2024 to 2026",which mainly includes four major aspects:

(i) Maintain Market resilience and mitigate serious damage to the market; 

(ii) Enhance the global competitiveness and attractiveness of market capital; 

(iii) Use technology and ESG ( namely environment, society and governance) to lead the transformation of financial markets;

(iv) to improve institutional resilience and operating efficiency.  

The document states thatthe China Securities Regulatory Commission will regard technological innovation centered on virtual assets as one of its development priorities. It will provide regulatory guidance on new virtual asset activities and promote the development of the regulatory system for virtual asset trading platforms; while supporting the tokenization of traditional products, it will protect the interests of investors; use blockchain and Web3 basic technologies to promote Establish a responsible and secure fintech ecosystem; while establishing closer ties with local and international law enforcement agencies to combat crime.

The following is the original text of the key points of the strategy.

Introduction

The complex and ever-changing global market, tense geopolitical situations, and rapid technological advances have all brought challenges to Hong Kong’s financial market. Unprecedented challenges and opportunities. We understand the issues of concern to a wide range of market participants and understand the importance of cooperating with the industry to jointly address risks and seize opportunities. At the same time, we will continue to strengthen our fight against financial crimes to avoid causing damage to investors and the market.

The Securities and Futures Commission has always spared no effort to fulfill its legal responsibilities and adhere to principles, and takes the supervision of Hong Kong's securities and futures markets and the protection of investors as its mission. Our statutory objectives include:

• Maintaining and promoting fairness, efficiency, competitiveness, transparency and order in the securities and futures industry;

• Help the public understand the operations of the securities and futures industry;

• Protect investors;

• Minimize crime in the industry and misconduct;

• Reduce systemic risks in the securities and futures industry; and

• Assist the Hong Kong SAR Government to maintain the financial stability.

In order to cope with the rapidly changing market conditions, we must set strategic priorities based on the above-mentioned powers and responsibilities, and at the same time lead market development, so as to maintain Hong Kong's reputation as a world-class financial center.

To this end, the SFC is now publishing a three-year strategic plan to publicly explain the SFC’s key tasks in capital market supervision and how we can enhance market competitiveness in order to consolidate Hong Kong’s status as an international financial centre. In our annual report, we will describe the arrangements we have made and the work we have completed to implement the strategic plan during the relevant financial year.

In the next three years, the four key strategies of the China Securities Regulatory Commission are:

The Association is confident that the above four key tasks will strengthen the core advantages of Hong Kong’s capital market, facilitate the sustainable development of the market, and enhance competitiveness.

We look forward to the progress in the coming years.

Maintain market resilience and mitigate serious damage to the market

In order to maintain Hong Kong’s status as an international financial center and risk management hub, the SFC is committed to continuing Enhance the resilience of Hong Kong’s financial markets and its infrastructure. This will solidify the foundation of the market and promote sustainable and safe development of the market.

Market Resilience

Maintaining performance in the face of challenging global market conditions, geopolitical tensions, and cybersecurity and technology risks Financial system resilience.

Coping with emerging risks, improving the risk management capabilities of market infrastructure and intermediaries, and laying a solid foundation for the sustainable development of the market.

Effective Investigation and Enforcement

Use technology to enhance the effectiveness of investigations and law enforcement.

Leverage our supervisory capabilities to detect market misconduct by listed companies and intermediaries.

Explore new regulatory tools to monitor and investigate companies operating across multiple jurisdictions.

Step up cooperation

Continue to work closely with regulatory agencies in Hong Kong, the Mainland and overseas to combat cross-border market misconduct and protect investors in a timely manner rights and interests.

Alert and educate the public

Allocate additional resources to various publicity activities to ensure that concise, clear and effective messages are conveyed to the public.

Cooperate with the Hong Kong Police Force and the Investor and Financial Education Council to combat investment fraud and strengthen public education.

Enhancing the global competitiveness and attractiveness of Hong Kong’s capital market

The international or local macroeconomic and political environment has undergone earth-shaking changes . Hong Kong needs to maintain its competitiveness in many aspects. In particular, it should adhere to its status as an international asset and wealth management hub and a global fund-raising center, and fully leverage its advantages to support the development of the local and mainland markets.

Deepen ties with the mainland capital market by expanding and improving market interconnection mechanisms. Introduce more mainland-related derivatives products into Hong Kong to enhance Hong Kong’s competitiveness in risk management. Strengthen the business footprint of mainland enterprises in Hong Kong and expand their business activities in Hong Kong;

Expand overseas networks to expand Hong Kong’s issuer and investor base. Explore potential cooperation opportunities or market connectivity with overseas regulatory agencies. Actively participate in the formulation of international standards and assume a leadership role in the international securities commission organization to continue to consolidate Hong Kong's international status;

Review Hong Kong's positioning to strengthen its capabilities in initial public offering fund-raising, while improving market quality and liquidity. Implement the medium- and long-term measures recommended by the Task Force on Promoting Stock Market Liquidity based on its report.

Leading the transformation of the financial market with technology and ESG

In terms of technology, we should embrace financial innovation while maintaining the integrity and stability of the market: It will provide regulatory guidance on new virtual asset activities and promote the development of the regulatory system for virtual asset trading platforms; protect the interests of investors while supporting the tokenization of traditional products; use blockchain and Web3 basic technologies to promote the establishment of a responsible and a secure fintech ecosystem; while establishing closer ties with local and international law enforcement agencies to combat crime.

In terms of ESG, consolidate Hong Kong’s position as a leading sustainable finance hub: Lead the development of corporate sustainability disclosure standards in Hong Kong and the Asia-Pacific region in a pragmatic manner; act as a leader in the region and globally role in bringing emerging markets and developed economies closer; connecting the mainland carbon market with international investors to drive growth; expanding local ESG products and markets, and working together to build a robust and comprehensive ESG ecosystem; curbing drift. Green behavior; nurturing talents for sustainable finance; and reducing our carbon footprint in line with the Securities and Futures Commission’s carbon neutrality roadmap.

Improve institutional resilience and operational efficiency

The Securities and Futures Commission is one of the key infrastructures of Hong Kong’s financial market. We will strive to improve institutional resilience and operational efficiency efficiency, and through strict budgeting and internal control measures to ensure that our financial resources are sufficient to support daily operations.

As a world-class regulatory agency, the Securities and Futures Commission is committed to connecting talents, functions and technology to improve governance effectiveness and keep abreast of the development of the market and regulatory environment.

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