Hong Kong

SFC Guidelines on Virtual Asset Trading Platforms – Operators outline a compulsory regulatory regime for centralized trading platforms providing services in Hong Kong. From 1 June 2023, such guidelines oblige virtual asset exchanges to apply strict rules concerning custody of clients’ assets, insurance, and anti-money laundering provisions. You may read more information here at SFC.

The Payment Systems and Stored Value Facilities Ordinance (Cap. 584) is the law that governs retail payment and electronic money systems in Hong Kong by giving the Hong Kong Monetary Authority jurisdiction over the clearing and settlement facilities. This ordinance ensures that a stringent licensing system is adhered to and that the customer float is separated from the operational funds.

Cap. 622, the Companies Ordinance, is the basic framework law for corporations in Hong Kong and regulates the formation and functioning of enterprises in Hong Kong via public structural disclosure, directors’ duties, and significant controller register maintenance.

The Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) is the statutory regime that governs CDD requirements and record-keeping requirements in the various financial and professional sectors in Hong Kong. Under the strict enforcement regimes of the various sectoral regulators, the banks, securities dealers, insurance companies, and trust or company service providers have to undertake systematic client identification, identification of politically exposed persons (PEPs), transaction monitoring, and suspicious activity reporting to the JFIU. The consolidation of the financial institutions and the designated non-financial professions within one statutory framework makes Hong Kong compliant with the FATF regulations and combats financial crime.

Cap. 571 is known as the Securities and Futures Ordinance, which functions as the primary piece of legislation regulating the markets of securities, futures, and derivatives in Hong Kong. The regulation is under the administration of the SFC, providing an umbrella licensing regime for intermediaries, corporate listing of public corporations in collaboration with the HKEX, and the stringent rules regarding disclosure of interests of the listed companies. The regulation includes the definition of market misconduct, which covers insider dealing, market manipulation, and dissemination of false information, as well as providing investigatory powers of the regulator.

The Personal Data (Privacy) Ordinance (Cap. 486) can be referred to as the law in the Hong Kong jurisdiction concerning the privacy of individuals regarding personal data. It is overseen by the PCPD, and there are six Data Protection Principles (DPPs), which include collection of personal data, accuracy of personal data, retention of personal data, use of personal data, security of personal data, and openness of personal data. The rights of the data subject involve access to and modification of personal data under the law, do not allow the use of personal data for direct marketing without consent, and give the Privacy Commissioner substantial powers to audit firms regarding data breaches and doxxing operations.

Banking Ordinance (Cap. 155) regulates and supervises banks and deposit-taking businesses in Hong Kong. Banking Ordinance is regulated by the HKMA, which provides the three-tier banking structure, which comprises Licensed Banks, Restricted Licensed Banks, and Deposit-Taking Companies. As per Cap. 155, the HKMA has a wide range of powers for licensing/delicensing, having strong capital and liquidity ratios, regulating changes in ownership, and conducting on-site inspections. Through this, the stringent rules and regulations under Cap. 155 protect depositors and ensure the stability of the international financial system of Hong Kong.