Securities And Futures Commission (SFC)

What Is the Securities And Futures Commission?

The Securities And Futures Commission (SFC) is a non-legislative statutory body responsible for managing Hong Kong's securities and futures markets. The SFC was laid out by the Securities and Futures Commission Ordinance (SFCO). The commission is independent and not under the domain of the Government of the Hong Kong Special Administrative Region. It is subsidized by licensing fees and transaction demands.

Understanding the Securities And Futures Commission (SFC)

The SFC controls the laws administering Hong Kong's securities and futures markets and works with the development of these markets. The SFC's statutory objectives are to keep up with and advance fairness, productivity, seriousness, and transparency in the securities and futures markets; advance public comprehension of investing and corporate finance policy; safeguard investors by authorizing regulations; reduce crime and wrongdoing and reduce the risks to Hong Kong's financial stability.

The History of the SFC

The markets in Hong Kong were unregulated until 1974. After a stock market crash in 1973, there was legislation to acquaint another system with regulate the stock and commodity trading industry. An extra stock market crash in 1987 provoked the formation of the six-part Securities Review Committee. In May 1988, the Committee suggested that a single, independent statutory body control the markets and, in May 1989, the Securities and Futures Commission Ordinance (SFCO) was ordered, which made another regulatory system for Hong Kong's markets.

The Asian Financial Crisis of 1997 provoked extra regulations and, in May 1989, the SFC was made following the establishment of the Securities and Futures Commission Ordinance (SFCO). By April 2003, the SFCO and nine different securities and futures-related ordinances were consolidated into the Securities and Futures Ordinance (SFO).

Since the SFC's commencement, the number of listed companies in the Hong Kong markets has developed from 290 out of 1989 to more than 1,700 while the number of licensees has expanded from around 1,900 to just about 39,000.

SFC Organization and Operations

Hong Kong's SFC's operational units incorporate corporate finance, policy, China and investment products, enforcement, supervision of markets, licensing and mediators supervision. Every one of the SFC's operational units is upheld by the legal services department and corporate affairs division. The SFC controls licensed corporations and people. As per the commission, its exercises incorporate the accompanying:

1. Setting and authorizing market regulations and examining any breaks or wrongdoing;
2. Licensing and managing market participants that fall under the SFC's regulatory obligation;
3. Overseeing market administrators like exchanges, clearing houses, share enlistment centers, and alternative trading stages;
4. Approving investment products and giving associated reports to investors;
5. Administering takeovers and mergers of public companies and of The Stock Exchange of Hong Kong Limited's regulation of listing matters;
6. Helping nearby and overseas regulatory specialists; and
7. Teaching investors on markets including their risks, rights, and obligations.