Market Misconduct

This overview considers legislation, powers and duties of enforcement agencies, steps that institutions and corporations must take to comply and protect themselves.
Overview

Hong Kong combats financial crime through various statutes – from the general criminal statute sanctioning traditional white collar crimes of theft and fraud to the complex and detailed requirements placed on financial institutions to curb misconduct in the securities market as well as money laundering and terrorist financing. This overview will consider the legislation, the powers and duties of enforcement agencies and the steps that institutions and corporations must take to comply, as well as to protect themselves from cyber threats, data breaches and handling investigations.

Market Misconduct Regulations

Market Manipulation

Insider Dealing

Short Selling

Visit our Short Selling Insight for details

Market Misconduct Regulations in Hong Kong 1400 788 Hauzen

Market Misconduct Regulations in Hong Kong

Insight into the Securities and Futures Ordinance (Cap 571) (SFO) and its ‘dual’ approach to breaches, which can see both civil cases and criminal charges being brought.

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Market Manipulation 1400 788 Hauzen

Market Manipulation

Scrutiny of issues relating to manipulation of the securities market is provided and offences which traditionally fall under this umbrella.

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Insider Dealing 1400 788 Hauzen

Insider Dealing

Illicit trades are considered in detail, documenting the history of the situation in Hong Kong and the current regime. Relevant legislation is considered, along with possible sanctions and penalties.

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Structure & Definitions of the Insider Dealing Provisions in SFO 1400 788 Hauzen

Structure & Definitions of the Insider Dealing Provisions in SFO

As with the provisions governing other forms of market misconduct, insider dealing is categorised into the civil regime and the criminal regime.

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What Constitutes Insider Dealing? 1400 788 Hauzen

What Constitutes Insider Dealing?

Insider dealing is defined under the SFO to arise under the three circumstances and under each circumstance, inside information may originate from two kinds of sources: someone connected with a corporation or someone involved with a proposed take-over offer for a corporation.

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Insider Dealing: Defences 1400 788 Hauzen

Insider Dealing: Defences

Under sections 271 and 292 of the SFO, a person or corporation may avail himself of a defence if he falls within one of the categories set out in this article.

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Market Misconduct Tribunal sanctions Magic Holdings International Limited and its five directors 1400 788 Hugo

Market Misconduct Tribunal sanctions Magic Holdings International Limited and its five directors

On 11 March 2021, the Market Misconduct Tribunal fined Magic Holdings International Limited and five of its directors a total of $4 million after they were found to be culpable of late disclosure of inside information on L’Oréal S.A.’s proposed acquisition of Magic in 2013.

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The Securities and Futures Commission (the “SFC”) reprimanded and fined Ewarton Securities Limited 1400 788 Hugo

The Securities and Futures Commission (the “SFC”) reprimanded and fined Ewarton Securities Limited

The Securities and Futures Commission reprimanded and fined Ewarton Securities Limited for internal control failings and breaches of the SFC’s Code of Conduct.

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The Court of First Instance orders boiler room fraudsters to compensate investors 1400 788 Hugo

The Court of First Instance orders boiler room fraudsters to compensate investors

The Court of First Instance orders boiler room fraudsters to compensate investors.

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