Part II Regulation of Banking, Securities, and Insurance, 4 Securities Regulation: The Securities and Futures Commission and Hong Kong Exchanges and Clearing Limited

Subject(s):

Equity — Securities — Investment business

This chapter outlines the evolution of the system of securities regulation in Hong Kong and the regulation of financial intermediaries, products, and services in the context of securities. Prior to 1987, capital market regulation in Hong Kong was minimal, with all the various exchanges operating largely on the basis of self-regulation in the context of the common law framework. The market crash of October 1987 triggered a review of the regulatory framework. Significantly, during the last decade the Hong Kong securities and futures market has gone through a profound transformation from a largely domestic market to an international market with active trading in equity and derivative products. The chapter concludes by stating that Hong Kong’s legal and regulatory framework for securities is comprehensive and of an international standard. However, at the same time the system’s many divisions allow certain risks to be unaddressed.