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The Long Arm of the Law – How the Securities and Futures Ordinance may reach overseas offenders?
In July 2021, the Court of First Instance (“CFI”) handed down its decision in Securities and Futures Commission v Isidor Subotic and Others (“Subotic”).
The Subotic decision contains useful discussions on whether the Hong Kong Court has jurisdiction and may exercise it over overseas defendants of statutory claims commenced by the Securities and Futures Commission (“SFC”) in respect of breaches of the Securities and Futures Ordinance (“SFO”).
Without making a general observation that the SFC can enforce the SFO against overseas offenders, the Subotic decision was, on its specific factual matrix and in respect of the jurisdiction issue, in favour of the SFC.
Given that market participants (and offenders) often operate from out of Hong Kong, the Subotic decision is important to the SFC’s effectiveness as a Hong Kong regulator.
An appeal against the Subotic decision (the jurisdiction issue in particular) is pending the determination of the Court of Appeal.
Meanwhile, however, the Subotic decision remains an integral part of the SFC’s arsenal. On 14 February 2022, the reasonings in Subotic were adopted in SFC v Yik Fong Fong and Others, which decision was in favour of the SFC.