The Securities and Futures Commission (SFC) today published its latest Quarterly Report which summarises key developments from October to December 2022 amidst increasing business activity.

Compared to the previous three months, a greater number and wider variety of investment products were authorised or registered by the SFC during the quarter. The SFC authorised 58 unit trusts and mutual funds, including 33 Hong Kong-domiciled funds, as well as one investment-linked assurance scheme, one mandatory provident fund pooled investment fund and 54 unlisted structured investment products for public offering in Hong Kong. Twelve new open-ended fund companies were also registered during the quarter.

As at 31 December, the assets under management of Hong Kong-domiciled funds increased 11% from three months earlier, to US$165.2 billion. Net fund inflows of about US$3.6 billion were recorded during the quarter and the number of firms licensed for asset management grew to 2,069. Listing activity also increased, with the number of new listing applications submitted for vetting rising from 29 to 36 (Note 1).

Highlights of the SFC’s enforcement work included a joint operation with the Independent Commission Against Corruption concerning suspected ramp and dump scams, market misconduct and corruption offences. To raise public awareness about these scams, the SFC organised a community outreach event with the Hong Kong Police Force's Anti-Deception Coordination Centre.

The report also relates the progress made during the quarter in the SFC’s priority policy areas such as sustainable finance, where new requirements in the Fund Manager Code of Conduct took effect requiring all fund managers to consider climate-related risks in their governance, investment and risk management processes and make related disclosures. The SFC also authorised the first two virtual asset futures exchange-traded funds in Hong Kong, another policy priority.

Other key figures for the quarter include:

• The SFC received 1,470 licence applications (Note 2), comprising 1,427 individuals and 43 corporations, and approved 59 corporate applications, of which 46% were Type 9 (asset management) and 39% were Type 4 (advising on securities) (Note 3).  
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• It commenced 54 in-depth inspections of licensed corporations to review their compliance with regulatory requirements.
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• The SFC made 1,366 requests for trading and account records triggered by untoward price and turnover movements.
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• It issued section 179 directions (Note 4) to gather additional information in 11 cases.  
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• Three licensed corporations and five individuals were disciplined, resulting in total fines of $7.61 million.

The report is available on the SFC website.