SEC Establishes Supervisory Cooperation Arrangement With Hong Kong SFC

The Securities and Exchange Commission today announced that it has established a comprehensive arrangement with the Hong Kong Securities and Futures Commission (SFC) as part of the SEC’s long-term strategy to enhance the oversight of regulated entities that operate across national borders. 

Hong Kong is a major financial center and the new supervisory cooperation arrangement will augment the SEC’s and the SFC’s ability to share information about regulated entities that operate in the U.S. and Hong Kong, including investment advisers, broker-dealers, securities exchanges, market infrastructure providers, and credit rating agencies.  The new comprehensive arrangement expands upon the one from 1995 that was limited to investment management activities.

“By creating a formal channel for exchanging supervisory information with the SFC, this new arrangement will enhance the SEC’s ability to supervise firms on a cross-border basis,” said Paul A. Leder, Director of the SEC’s Office of International Affairs.

The SEC’s approach to supervisory cooperation with its overseas counterparts builds on more than three decades of experience with cross-border cooperation, starting in the late 1980s with memoranda of understanding (MOUs) facilitating information sharing between the SEC and other securities regulators in securities enforcement matters. Enforcement cooperation MOUs help the SEC collect information abroad to investigate securities-law violations and compensate victims of securities fraud when possible.  Supervisory cooperation arrangements establish mechanisms for ongoing consultation and the exchange of information regarding the oversight of global firms and markets.  Such information may include routine supervisory information as well as information regulators need to monitor risk concentrations, identify emerging risks, and better understand a globally active regulated entity’s compliance culture.  These arrangements also facilitate the ability of the SEC and its counterparts to conduct on-site examinations of registered entities located outside the U.S.

Additional information about SEC cooperation arrangements with foreign regulators can be found at: http://www.sec.gov/about/offices/oia/oia_cooparrangements.shtml