Hong Kong’s financial regulator said on Tuesday it will continue to take all measures necessary to ensure that the markets remain fully open for business throughout the novel coronavirus pandemic.
The Securities and Futures Commission said it’s determined to respond to the pandemic’s significant impact on the city’s capital markets actively and roll out measures covering brokers, asset managers and other market intermediaries, as well as listed companies and Hong Kong Exchanges and Clearing.
A significant part of our efforts have been directed to much-needed regulatory relief for the market participants, who have had to adapt very rapidly to the COVID-19 situation
Ashley Alder, chief executive officer of the Securities and Futures Commission
The pandemic has spawned a new era of global market volatility. The price of shares of the world’s major corporations has plunged in the past few months amid growing concerns over corporate failures.
The pandemic has forced many employees to work from home to avoid getting infected which, along with the social-distancing measures, have brought operational challenges to the financial industry.
The SFC said it’s pursuing a flexible approach to ensure markets continue to function properly and safeguard market integrity, as well as investor protection.
“A significant part of our efforts have been directed to much-needed regulatory relief for the market participants, who have had to adapt very rapidly to the COVID-19 situation,” said SFC Chief Executive Officer Ashley Alder.
The securities watchdog has given specific guidance on how brokers can record client orders when out of the office, deferred regulatory timetables to ease pressure on stretched resources across a range of regulated firms, and allowed more flexibility in licensing matters, he said.
For listed issuers, the SFC and the stock exchange have issued special guidance to enable most companies with Dec 31 financial year-ends to issue preliminary earnings results in a timely manner. Guidance concerning listed companies’ annual and other shareholders' meetings, as well as the publication of annual reports, has been given as well, the regulator said. In previous years, most of these companies’ annual reports are unveiled in March.
The SFC said it has also intensified supervisory efforts on potential vulnerabilities arising from the exceptional market conditions resulting from the pandemic. The move is to ensure that firms and financial market infrastructures manage their risks appropriately and continue to operate normally.
For instance, the commission has focused on investment fund liquidity and redemption profiles, as well as the fair treatment of fund investors, particularly if funds propose to activate liquidity risk management measures, such as swing pricing or suspensions, it said.
