Hong Kong To “Supercharge” Scrutiny of Private Fund Managers in Key Areas

On January 23, 2024, the Securities and Futures Commission (SFC) rolled out its strategic plan governing the regulation of financial markets, signaling a clear and renewed focus on minimizing crime and misconduct (including insider dealing), which is part of its top four strategic priorities and regulatory agenda, alongside protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation. The strategic priorities were announced as part of the SFC’s desire to be transparent about its program to enhance capital market regulation and Hong Kong’s competitiveness as an international financial center. The program will run for three years (2024-2026). In this article, we provide a summary of the key elements of the new program, analysis on the areas of regulatory scrutiny and expected standards of conduct and, more generally, commentary on the agenda items of most relevance to private fund managers to better navigate the highly regulated investment funds landscape in Hong Kong.