SFC and AFRC sign new Memorandum of Understanding to expand regulatory cooperation to financial reporting of licensed corporations and funds

On 28 September, the SFC and the AFRC signed a new Memorandum of Understanding (MoU) to expand their regulatory cooperation beyond the oversight of the financial reporting and related audit work of listed entities. The new MoU covers the financial and compliance reporting of licensed corporations, SFC-licensed virtual asset service providers, SFC-authorised funds and registered open-ended fund companies, as well as the related audit and assurance work performed by their auditors. In addition, the MoU establishes a comprehensive framework for information sharing, case referrals, mutual assistance, and coordinated inspections and investigations relating to regulatory matters of common interest. Dr Kelvin Wong, Chairman of the SFC, said: "This MoU further demonstrates our shared commitment to reliable financial reporting and high-quality audits. Strengthening our collaboration with the AFRC to cover a broader range of entities and activities within Hong Kong's diverse financial ecosystem will ensure more comprehensive regulation, thereby enhancing market integrity and reinforcing Hong Kong's position as a trusted international financial centre." Dr Moses Cheng, Chairman of the AFRC, said: "This MoU marks an important milestone in the long-standing partnership between the AFRC and the SFC. By providing a clearer collaborative framework, both parties will be able to further enhance their ability to safeguard the public interest and support the continued resilience and long-term competitiveness of Hong Kong's financial market." Ms Julia Leung, Chief Executive Officer of the SFC, said: "This MoU provides stronger regulatory support for our cooperation with the AFRC, ensuring that our regulatory work can continue to evolve in response to market dynamics. Deepening regulatory cooperation across different financial sectors is crucial to maintaining the quality of financial reporting and enhancing global investors' confidence in Hong Kong's regulatory system." Ms Janey Lai, Chief Executive Officer of the AFRC, said: "Reliable financial reporting and auditing are important cornerstones for safeguarding market integrity and reinforcing investor confidence. The deepened cooperation and enhanced information sharing between the AFRC and the SFC will help both parties identify emerging risks earlier and discharge their statutory duties and respond more effectively."