Julia Leung: The scale and pace of AI adoption by Hong Kong financial intermediaries are increasing day by day; additional guidance on the adoption of agentic AI will be provided as appropriate.

Julia Leung, Chief Executive Officer of the Securities and Futures Commission (SFC), said at Hong Kong FinTech Week that the scale and pace of AI adoption by Hong Kong financial intermediaries are increasing day by day, and cautioned that frontier models and agentic AI may develop faster than traditional regulatory assessment and standard-setting cycles. Therefore, the SFC must work with the industry and other regulators to identify and respond to relevant risks more flexibly. Leung said the SFC will provide additional guidance on the adoption of agentic AI as appropriate, building on the findings of the above survey and the trials under the GenAISandbox++. She noted that manual review of every intermediate step is impractical, and the SFC will develop principle-based practical guidance for applications involving a higher degree of autonomy. The SFC will focus on maintaining human-centric accountability and oversight throughout the entire workflow. This is precisely because agentic AI changes the nature and scale of risks: it may accumulate and amplify errors across multiple steps, act without authorization, and inadvertently interfere with the operations of other institutions. Leung believes that institutions can first grant agentic AI a greater degree of autonomy in lower-impact, reversible operations (such as back-office processes and monitoring work); for providing investment advice to clients, making portfolio decisions and executing market transactions, stricter safeguards must be adopted commensurate with the level of risk. When acting on behalf of clients, the degree of AI autonomy should be commensurate with the risks involved. Looking ahead, the SFC plans to develop a cybersecurity framework setting out baseline requirements for all licensed institutions and higher requirements for higher-risk institutions. Leung said the SFC is also strengthening coordination with other Hong Kong regulators and relevant authorities to promote intelligence sharing and enhance the resilience of the financial industry. Regionally, the SFC is leading joint efforts among Asia-Pacific securities regulators to address operational risk incidents or large-scale fraud that may spill across borders.