Hong Kong SFC issues new guidance note and FAQs on regulatory cooperation and its benefits

On 12 December 2017, the Securities and Futures Commission (the SFC) published its Guidance Note on Cooperation with the SFC (the Guidance).

The Guidance contains an updated section on disciplinary proceedings and a new section on proceedings in the civil courts and the Market Misconduct Tribunal (MMT). It does not apply to criminal proceedings, which is subject to the unfettered discretion of the Department of Justice. The Guidance replaces the previous version issued in March 2006.

This will be of keen interest to the increasing number of firms and individuals who are subject to regulatory scrutiny. The Guidance covers several key topics which are considered below:

  1. Clarification on the kind of action that will be viewed as cooperation;
  2. The factors that the SFC will use to assess cooperation;
  3. The measures the SFC will use to encourage cooperation in disciplinary proceedings, including discounts to sanctions; and
  4. The SFC’s current practice of resolving proceedings in the civil courts or the MMT with cooperative parties.

The SFC has also issued FAQs to help the industry and the public understand the Guidance.

Our e-bulletin provides an overview of the Guidance and the FAQs. If you wish to discuss this further, please do not hesitate to reach out to William Hallatt and Michael Tan of our Hong Kong team or your usual Herbert Smith Freehills contact.

 

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