7 September 2026

1. Introduction

On 24 July 2026, The Stock Exchange of Hong Kong Limited (the “Exchange”), a wholly-owned subsidiary of the Hong Kong Exchanges and Clearing Limited (“HKEX”), published the consultation conclusions (the “Consultation Conclusions”) on their consultation paper on the Listing Framework Competitiveness Review. This marks the initial phase of the Exchange’s competitiveness review of Hong Kong’s listing framework, seeking market feedback on targeted reforms aimed at broadening company diversity, expanding investment opportunities, and maintaining robust investor protections.

The proposals aim to reform the existing environment primarily by refining the existing listing framework in three vital areas:

1. Expanding the Weighted Voting Rights (WVR) regime by lowering market capitalisation and financial eligibility thresholds and relaxing certain WVR restrictions to enhance market competitiveness.
2. Altering the regime to support overseas-listed issuers, which includes introducing measures to facilitate overseas issuers’ listings in Hong Kong and lowering the eligibility thresholds for secondary listings. This lowers the barrier for overseas issuers to access the Hong Kong market and strengthens Hong Kong’s competitiveness as an international listing venue.
3. Enhancing initial listing requirements and arrangements to streamline the listing process and improve the protection of commercially sensitive information. This is done by improving the listing pathway for commercialised biotech and specialist technology companies, expanding the scope of confidential filing of listing applications to cover all new applicants, and refining the return mechanism.

2. The key proposals to be adopted

3.Conclusion

The relevant Listing Rule amendments became effective immediately upon publication of the Consultation Conclusions on 24 July 2026.

The reforms hold significant relevance to all companies considering applying for a listing on the Exchange, particularly those in biotech and technology sectors. Significantly, listing applicants are advised to take into account the following:

1. The reduction in the market capitalisation thresholds for WVR companies will enable more mid-sized technology and innovative companies to list on the Exchange with a WVR structure.
2. The formalisation of two pathways for satisfying the innovative company requirement, namely a technology-based route (Route A) and a business model-based route (Route B), provides greater certainty and a clearer pathway for different types of innovative companies seeking a WVR listing.
3. Biotech and specialist technology companies that already meet the financial eligibility tests are given the option to list under the applicable specialist chapters, providing a wider range of choices to listing applicants.
4. The expansion of the non-public filing regime to all new applicants, together with the enhanced Return Mechanism, is expected to provide greater flexibility during the IPO process while increasing accountability among professional advisers involved in listing applications.

The Exchange has indicated that these reforms represent the first phase of its competitiveness review, with further consultations and potential reforms to the listing framework expected in due course.

Please contact our Partner Mr. Rodney Teoh for any enquiries or further information.

This news update is for information purposes only. Its content does not constitute legal advice and should not be treated as such. Stevenson, Wong & Co. will not be liable to you in respect of any special, indirect or consequential loss or damage arising from or in connection with any decision made, action or inaction taken in reliance on the information set out herein.

7 September 2026

1.    Introduction

On 21 August 2026, The Stock Exchange of Hong Kong Limited (the “Stock Exchange”), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (the “HKEX”), announced the implementation of a temporary waiver under which the validity period of eligible new listing applications will be extended from six months to twelve months from the date of submission of the listing application form, subject to certain conditions and safeguards (the “Temporary Waiver”). The Temporary Waiver will apply for a period of three years from the date of the announcement, namely from 21 August 2026 to 20 August 2029.

2.    Key Features of the New Measure

According to the Stock Exchange’s announcement, the Temporary Waiver applies to all new listing applications that satisfy the conditions set out in the announcement, including: (a) listing applications that remained valid as of 21 August 2026 (being the date of the announcement); and (b) listing applications submitted or re-submitted on or after 21 August 2026. To qualify for the Temporary Waiver, the following conditions must be met:

• the Stock Exchange must not have stated in its comment letter that the review of the applicant’s new listing application has been suspended; and
• the Securities and Futures Commission (the “SFC”) and/or the Stock Exchange must not have issued a direct request for information letter and/or a material comment letter to the applicant.

Where the concerns identified in such regulatory correspondence have been satisfactorily addressed and accepted by the relevant regulator before the expiry of the initial six-month validity period, the relevant listing application may still qualify for the Temporary Waiver.

Applicants benefiting from the extended validity period must continue to comply with all applicable Listing Rules and provide complete and up-to-date information, including updated business and financial information, to enable regulators to properly assess each application and investors to make informed decisions. The extension does not alter the Stock Exchange’s existing regulatory standards or investor protection measures. The Stock Exchange will monitor the implementation and effectiveness of the Temporary Waiver and may review the relevant requirements or conduct a public consultation if considered necessary and appropriate.

3.    Enhancing Flexibility and Reducing Repetitive Work

The Temporary Waiver is designed to provide applicants, sponsors and their advisers with greater flexibility in managing listing timetables, while reducing the frequency of re-submissions and the associated burden of repeatedly updating application documents and supporting materials. This allows market participants to focus more effectively on maintaining the quality of listing application documents and prospectus disclosures.

Ms. Katherine Ng, Head of Listing at HKEX, commented: “HKEX is committed to continuously enhancing the efficiency and competitiveness of Hong Kong’s listing regime while maintaining rigorous regulatory standards and protecting the public interest. With the support of the SFC, this extension builds upon the enhanced listing application timetable introduced jointly by HKEX and the SFC in October 2024, providing applicants with greater flexibility in managing listing timelines and supporting a more focused and efficient application process.”

4.    Continuing Listing Reforms and Strengthening Hong Kong’s Position as an International Financial Centre

The extension of the validity period for new listing applications represents another significant reform initiative following the enhanced timetable for new listing applications jointly announced by the SFC and the Stock Exchange in October 2024. The 2024 enhancements established clearer regulatory feedback timelines and review milestones, categorising listing applications into three different scenarios. The enhanced timetable was intended to enable most new listing applications to complete the regulatory review process within the existing six-month application validity period.

The latest measure doubles the validity period to twelve months, which is expected to reduce the need for re-submissions and extensive updating of application documents caused by application lapses. It also provides applicants with additional time to address regulatory comments and prepare listing documents.

Throughout the listing application process, applicants, sponsors and their advisers should continue to closely monitor the progress of their applications, promptly report material developments to regulators, and submit realistic timetables. Sponsors are expected to exercise due skill, care and diligence when establishing reasonable timelines, taking into account the time required by regulators to review and complete their assessments. Given the extended application validity period, the timing assumptions under the enhanced review timetable may be adjusted appropriately by reference to the latest progress updates and timetables provided by applicants and their sponsors.

5.    Conclusion

The Stock Exchange’s decision to extend the validity period of new listing applications is a practical response to market demand. In today’s increasingly complex market environment, companies preparing for IPOs face greater uncertainty, and a longer application validity period will help alleviate timing pressures and avoid the need to re-submit substantial volumes of updated materials simply because an application has expired.

The new measure should also ease the workload of sponsors and professional advisers, enabling them to devote more attention to the quality of application materials and prospectus disclosures. Overall, the change reflects market realities and further enhances Hong Kong’s competitive position as an efficient, sophisticated and internationally recognised financial centre.

The introduction of the Temporary Waiver marks another important step by HKEX in refining its listing framework and strengthening market competitiveness. It is expected to have a positive and far-reaching impact on Hong Kong’s IPO market.

Please contact our Partner Mr. Rodney Teoh for any enquiries or further information.

This news update is for information purposes only. Its content does not constitute legal advice and should not be treated as such. Stevenson, Wong & Co. will not be liable to you in respect of any special, indirect or consequential loss or damage arising from or in connection with any decision made, action or inaction taken in reliance on the information set out herein.

China’s securities regulator has fired its most significant shot yet in a years-long campaign against unlicensed cross-border brokerages. On 22 May 2026, the China Securities Regulatory Commission (“CSRC”), acting jointly with seven other government departments, announced it would impose firm and decisive enforcement action against (坚决予以打击)[1] three of the region’s most prominent online brokers:

• Tiger Brokers (NZ) Limited;
• Futu Securities International (Hong Kong) Limited; and
• Longbridge Securities (Hong Kong) Limited.

These coordinated actions — resulting in proposed penalties exceeding RMB 2.3 billion (~HK$2.67 billion), a mandatory two-year wind-down of mainland-facing operations, and a parallel Hong Kong regulatory response from the Securities and Futures Commission (“SFC”) — underscore Beijing’s determination to close unlicensed cross-border brokerage channels and reassert control over cross-border capital flows.

In this newsletter, our Regulatory Enforcement and Compliance team provides an overview of the CSRC’s findings, the mechanics of the rectification scheme, the SFC’s parallel action, and the critical takeaways for brokers, asset managers, and fintech platforms operating across the Hong Kong–Mainland border.

1. CSRC’s position

On 22 May 2026, the CSRC announced it would impose firm and decisive enforcement action against on Tiger Brokers (NZ), Futu Securities International (Hong Kong), and Longbridge Securities (Hong Kong) for “illegally conducting securities business within China”, stating their activities violated China’s securities, funds and futures laws and disrupted market order (破坏了市场秩序).

Specifically, the CSRC found that the three firms had, without mainland licenses, solicited mainland investors, executed trades, and offered fund and futures brokerage services in breach of the PRC Securities Law. The CSRC formally opened cases against both onshore and offshore entities of all three firms.

The CSRC’s announcement can be accessed here.

The penalties are significant. The CSRC proposed roughly 2.3 billion yuan (HK$2.67 billion) in confiscations and fines against the two firms and their founders, penalizing them for providing securities marketing and order-processing services on the mainland without the required licenses. The heaviest impact falls on their mainland client base. Drawing on end-of-2025 figures, the two firms are expected to wind down roughly 570,000 to 630,000 mainland-funded accounts over the coming two years, collectively holding between US$27 billion and US$29 billion in assets.

This enforcement action did not arise in isolation but represents the culmination of a multi-year regulatory campaign. The CSRC first flagged the issue in October 2021 and then formally acted on 30 December 2022[2], finding that Futu and Tiger Brokers had been operating a cross-border securities brokerage business for mainland residents without the requisite CSRC licence or approval. The CSRC accordingly ordered both firms to stop onboarding new mainland clients, though existing account holders were still permitted to trade and withdraw funds.

In response, Futu and Tiger withdrew their apps from mainland app stores in mid-2023, and by September 2023 the CSRC told brokerages based in offshore jurisdictions such as Hong Kong to stop offering securities trading accounts to new mainland investors, according to a Sept. 28 notice issued by its Shanghai unit. Compliance gaps persisted over the following two years, and a parallel 2026 Securities and Futures Commission review of 12 licensed brokers uncovered continued weaknesses, including inadequate due diligence on account opening documents, acceptance of forged or questionable documentation, and insufficient verification of clients’ cross-border correspondent relationships.[3]

2. The Legal Mechanism — Two-Year Rectification Plan

Alongside the enforcement action, the CSRC and seven other government departments jointly issued the “Implementation Plan for the Comprehensive Rectification of Illegal Cross-Border Securities, Futures and Fund Business Activities”[4], approved at the State Council level. The plan sets a two-year rectification period (集中整治期) to wind down existing illegal business, rather than terminate it outright.

During this period, affected brokers may only process sell orders and withdrawals — no new purchases, deposits, or account openings for mainland ID holders are permitted, and existing services cannot be expanded. Longbridge and Futu have already implemented these restrictions from 12 June 2026. Once the two years lapse, all mainland-facing platforms, apps, and servers must be fully shut down.

3. Parallel Hong Kong Regulatory Action

Crucially, this was never solely a Mainland story. On the same day as the CSRC’s announcement, the SFC issued its own circular to all licensed corporations[5], referencing the CSRC’s rectification plan directly. The circular followed the SFC’s review of 12 licensed brokers, which uncovered “significant deficiencies” in account-opening due diligence and ongoing monitoring of cross-border correspondent relationships with overseas intermediaries. Some brokers had accepted questionable or forged client documents, with certain accounts later linked to suspicious fund transfers involving no genuine trading activity.

4. Practical Takeaways for Clients

For SFC-licensed brokers and intermediaries, the priority is a targeted internal review: assess account-opening and beneficial-ownership verification processes for Mainland clients, verify with the clients at issue any accounts opened with questionable documentation, dormant zero-balance accounts, or accounts showing red flags such as shared addresses or bank accounts across unrelated clients. Firms should implement the SFC’s required investor declarations confirming that Mainland clients’ funds originate from lawful sources outside the Mainland. [6]

For asset managers and fintech platforms, this is a prompt to reassess any indirect subscription arrangements, nominee accounts, or omnibus structures that could be characterised as facilitating circumvention of PRC foreign exchange controls, even where the platform has no direct Mainland licensing exposure.

The SFC circular confirms that cross-border introducer arrangements do not dilute accountability, and that breaches of overseas regulatory requirements — including the CSRC’s own rules — may independently constitute a breach of paragraph 12 of the Code of Conduct, exposing licensees to SFC action regardless of the outcome of Mainland proceedings.

Non-compliance carries real consequences: the SFC has stated it has “zero tolerance” for forged documentation, and has warned it may impose external look-back reviews, restrictive licensing conditions under section 116(6) of the SFO, and formal enforcement action affecting a firm’s fitness and properness. Material breaches must also be self-reported to the SFC under paragraph 12.5(a) of the Code of Conduct.

More broadly, all cross-border businesses should treat this as a signal to strengthen senior management oversight of cross-border compliance controls on an ongoing basis, not as a one-off remediation exercise.

If you have any questions or would like to understand how these regulatory developments may impact your business or compliance obligations, please reach out to our Partner Kenneth Leung or our Associate Ronnie Tse.

This article is for information purposes only. Its content does not constitute legal advice and should not be treated as such. Stevenson, Wong & Co. will not be liable to you in respect of any special, indirect or consequential loss or damage arising from or in connection with any decision made, action or inaction taken in reliance on the information set out herein.

[1] China Securities Regulatory Commission. (2026, May 22). 证监会严肃查处老虎等机构非法跨境展业案件 (CSRC sternly investigates and punishes illegal cross-border business activities by Tiger and other institutions).

[2] China Securities Regulatory Commission. (2022, December 30). 中国证监会推进富途控股、老虎证券非法跨境展业整治工作 (CSRC advances the rectification of illegal cross-border business activities by Futu Holdings and Tiger Brokers).

[3] Securities and Futures Commission of Hong Kong. (2026, May 22). Circular to licensed corporations: Expected controls for account opening and maintaining relationships with clients (Ref. No. 26EC29).

[4] China Securities Regulatory Commission. (2026, May 22). 关于印发《综合整治非法跨境证券期货基金经营活动实施方案》的通知 (Notice on the issuance of the “Implementation plan for comprehensive rectification of illegal cross-border securities, futures, and fund business activities”)

[5] Securities and Futures Commission of Hong Kong. (2026, May 22). Circular to licensed corporations: Expected controls for account opening and maintaining relationships with clients

[6] Securities and Futures Commission of Hong Kong. (2026, May 22). Deficiencies identified in the Review and standards expected of licensed corporations (Appendix B).

HKEX Publishes Consultation Paper on Enhancements to Board Lot Framework

 9 January 2026

1. Introduction

On 18 December 2025, Hong Kong Exchanges and Clearing Limited (“HKEX” or the “Exchange”) published a consultation paper on proposed enhancements to the board lot framework in the Hong Kong securities market (the “Consultation Paper”). The initiative, mandated by the HKSAR Government’s Task Force on Enhancing Stock Market Liquidity established in August 2023, aims to streamline trading, clearing and settlement processes while expanding investor participation.

The consultation period will run until 12 March 2026. Stakeholders are invited to submit feedback via HKEX’s online questionnaire, with a consultation conclusions paper tentatively (the “Consultation Conclusions”) scheduled for release by the end of the first half of 2026. This update breaks down the core proposals, their strategic rationale, and potential impacts on market participants.

2. Background: Hong Kong’s Board Lot Framework

A board lot is the standard number of shares required for a single transaction in the securities market, serving as a cornerstone of orderly trading and operational efficiency. Unlike most major global exchanges that adopt a single unified board lot unit, Hong Kong’s current framework is “issuer-led”, allowing each listed company to determine its own board lot size.

This approach has resulted in significant fragmentation. Currently, 44 distinct board lot units are in use, ranging from 10 shares to 100,000 shares. While 2,000 shares is the most common unit which is used by 25% of issuers, the 100-share unit accounts for the largest share of average daily turnover and market capitalisation.

This fragmentation has created multiple challenges:

(i)      Operational inefficiencies: Complexity in trading, clearing and settlement processes;
(ii)      Barriers to retail participation: Extremely high board lot values make certain securities
          unaffordable for small investors, while low board lot values risk “negative value trades”
          where execution costs exceed trade value; and
(iii)      Misalignment with global practices: Divergence from international standards complicates
          cross-market trading, particularly for Southbound Stock Connect investors familiar with
          Mainland China’s unified 100-share board lot.

Additionally, Hong Kong’s market has a higher proportion of low-priced securities (56% of securities traded in the Hong Kong securities market (“Applicable Securities”) trade below HK$1.0) and fixed execution costs, making an immediate shift to a single unified board lot unit impractical due to the risk of widespread negative value trades.

3. Key Enhancements in Detail

3.1  Board Lot Value Floor and Ceiling Guidance

To balance accessibility and risk mitigation, HKEX proposes revising existing guidance and introducing a new ceiling:

(i)      Reduction of board lot value floor guidance: HKEX proposes decreasing the existing board
          lot value floor from HK$2,000 to HK$1,000. This adjustment reduces entry barriers without
          increasing negative value trade risks. The floor applies only when issuers list or adjust board
          lot units. No action is required if stock price movements push values below HK$1,000.
(ii)      Introduction of board lot value ceiling guidance: HKEX proposes to introduce board lot
          value ceiling at HK$50,000, applicable only to issuers using units larger than 100 shares. The
          ceiling encourages issuers to split units to maintain accessibility.

 3.2 Standardisation of board lot units

HKEX proposes reducing the number of permissible board lot units to eight board lot options (i.e., 1, 50, 100, 500, 1,000, 2,000, 5,000, and 10,000 share(s)), covering diverse price bands from HK$0.1 to HK$1,000+ per share. The proposed new board lot framework would result in 657 securities needing to change board lot units, representing approximately 25% of the 2,680 Applicable Securities. The standardised set supports future convergence to a single unit by encouraging gradual adoption of smaller units.

 3.3 Phased Implementation Aligned with the Uncertificated Securities Market (“USM”)

To minimise market disruption, the framework will be rolled out in two phases, coordinated with HKEX’s USM initiative which replaces physical share certificates with electronic records:

Phase One:

(i)      New issuers: Must adopt the eight standardised units and comply with the HK$1,000
          floor/HK$50,000 ceiling upon listing.
(ii)      Existing issuers: No immediate unit standardisation required. Only need to adhere to the
          HK$1,000 floor/HK$50,000 ceiling guidelines.

Phase Two: Existing issuers must adopt one of the standardised units within a specified period after transitioning to USM. This aims at avoiding reprint physical share certificates and optimising issuer resources.

 A detailed implementation timeline may be included in the Consultation Conclusions Paper.

4. Strategic Implications for Market Participants

The proposed enhancements will have distinct impacts on key market stakeholders:

 Approximately 25% of listed issuers will need to revise their board lot units to one of the eight standardised options. In the long term, these reforms will reduce operational complexity and better align with the needs of global and international investors—particularly for “A+H share” issuers seeking consistency across Mainland China and Hong Kong markets. Issuers must continuously monitor their board lot values to ensure compliance with the HK$50,000 ceiling applicable to units exceeding 100 shares.

Investors will benefit from lower entry barriers, expanding access to high-quality securities, reducing concentration risk, and enabling portfolio diversification. Institutional investors will find trading, hedging and settlement processes simplified by standardised units, lowering operational costs and the risk of errors.

Fewer board lot units significantly enhance the operational efficiency of brokers and intermediaries by streamlining system configurations, order entry, and client onboarding processes. Reduced odd lot creation and clearer value guidelines help mitigate operational and settlement risks, strengthening risk management. Additionally, standardised board lots simplify the management of associated products, whose terms are often linked to the underlying securities’ board lot units, eliminating the need for complex adjustments.

5. Conclusion

The consultation period runs until 12 March 2026, and all interested parties—including issuers, brokers, institutional and retail investors, legal and compliance professionals, and investor advocacy groups—are strongly encouraged to submit feedback via the Exchange’s online questionnaire.

Given the transformative nature of these proposals, stakeholders are urged to:

(i)      review the Consultation Paper in full (available on HKEX’s website);
(ii)      provide detailed, data-driven feedback by 12 March 2026 to shape the final rules; and
(iii)      prepare for phased implementation, particularly aligning systems and processes with USM
          transition timelines.

The success of this reform will depend on balancing operational efficiency, investor accessibility and issuer flexibility, ensuring Hong Kong’s securities market remains dynamic, inclusive and aligned with global best practices.

Please contact our Partner Mr. Rodney Teoh for any enquiries or further information.

This news update is for information purposes only. Its content does not constitute legal advice and should not be treated as such. Stevenson, Wong & Co. will not be liable to you in respect of any special, indirect or consequential loss or damage arising from or in connection with any decision made, action or inaction taken in reliance on the information set out herein.

In the dynamic landscape of Hong Kong’s financial markets, the Securities and Futures Commission (“SFC”) serves as the primary regulator. For market participants, including licensed corporations, directors, and investment managers, understanding the breadth of the SFC’s powers is not just a compliance exercise, but a critical component of risk management. For a layman, it is equally important to understand what legal responsibility and implications could entail should you receive any enquiry or request from the SFC, hence protecting your legal position.

Recent enforcement trends and court decisions in late 2025 have reinforced a clear message: the SFC’s investigative powers are extensive, it has little patience for non-compliance, and it does not hesitate to exercise its enforcement toolkit.

Section 183: The Power to Investigate

The cornerstone of the SFC’s authority lies in Section 183 of the Securities and Futures Ordinance (Cap. 571, “SFO”). This section empowers the SFC to compel any person – not just the subject of the investigation – to provide information in the context of an investigation under Section 182 of the SFO.

Unlike in police investigations, where your right to silence is fundamental, the SFO significantly abrogates this right. If you receive a Section 183 notice, you are legally obligated to:

• Produce records and documents;
• Provide written explanations regarding those documents; and
• Attend interviews to answer questions.

Crucially, you cannot refuse to answer on the grounds of self-incrimination. While you can claim privilege to prevent your answers from being used against you in criminal proceedings, those same answers can still be used in civil or disciplinary actions, or to lead investigators to other admissible evidence.

The Trap of Secrecy

A common pitfall for those under investigation is the Section 378 secrecy provision. Upon receiving a notice, you are essentially bound by a strict statutory “gag order”. You must not disclose the existence of the investigation or the notice to anyone, including your colleagues, spouse, or employer, without the SFC’s express consent.

The only major exception is disclosing the information to your lawyer for the purpose of seeking legal advice. Breaching this secrecy is a criminal offence in itself, exposing one to be prosecuted independently of the underlying misconduct.

Recent Case Law: No Excuses for Non-Compliance

The High Court’s judgment in October 2025 in SFC v. oOo Securities (HK) Group Limited [2025] HKCFI 4584 serves as a stark reminder of the consequences of ignoring these obligations.

In this case, a licensed corporation failed to comply with Section 183 notices, citing a change in management and the loss of records during a relocation to Beijing. The Court rejected these defences, holding that:

• Changes of ownership or management do not absolve a corporation of its regulatory duties. The new owners must conduct due diligence and ensure compliance.
• Lost records are not a sufficient excuse unless substantiated with specific proof, especially if the loss occurred after the deadline for production.

The Court ordered the firm to comply and ruled that they were liable for penalties, paving the way for fines. This confirms that the SFC will use Section 185 to seek court orders and punish those who treat regulatory notices lightly.

The Multi-Track Enforcement Regime

Once an investigation concludes, the SFC has ample choices within its arsenal to further pursue against the wrongdoer(s). The SFC operates a dual-track system, allowing it to pursue misconduct through civil, criminal, or disciplinary routes depending on the severity of the case.

1. Disciplinary Proceedings (SFO Part IX): The most common tool against licensed persons. Sanctions range from public reprimands and fines (up to HK$10 million, or 3 times the profit gained, whichever is higher) to the revocation of licenses.
2. Market Misconduct Tribunal (MMT): An independent inquisitorial body that handles market misconduct cases such as insider dealing and price rigging. It can impose various orders, such as “cold shoulder” orders (banning trading) and disqualification orders against directors, but not criminal sanctions such as imprisonment.
3. Criminal Prosecution: For serious offences, the SFC can prosecute summarily or (for more complex cases) refer the case to the Department of Justice for indictment, where jail terms are routinely sought.
4. Civil Remedies (e.g. applications under SFO Sections 213 and 214): Increasingly used to obtain injunctions, freeze assets or seek restoration orders to compensate investors who have suffered losses.

Scrutiny on Asset Managers

The SFC has also sharpened its focus on the asset management sector. Following a circular in October 2024, the regulator has been rigorously inspecting private fund managers for “substandard conduct,” particularly regarding conflicts of interest and risk management.

Common deficiencies identified include using fund assets to finance related entities, prioritizing staff redemptions over clients, and inappropriately valuing assets to hide losses. Managers-In-Charge and Responsible Officers should be aware that they bear primary responsibility for these failures.

Conclusion

Compliance with the SFO is not optional. As the oOo Securities case demonstrates, internal administrative hurdles or staffing changes are no defence against statutory obligations.

If you or your firm receives a Section 183 notice or is subject to an inspection, immediate legal advice is essential to navigate the delicate balance between cooperation, privilege, and secrecy.

At Stevenson, Wong & Co., our regulatory and compliance team has extensive experience advising listed companies, licensed corporations and individuals on SFC investigations, disciplinary proceedings, and compliance strategy. We can assist you in:

• Responding to Section 183 notices and attending SFC interviews;
• Conducting internal investigations and “health checks” on internal controls; and
• Advising and representing you in any MMT or Court proceedings initiated by the SFC.

To discuss how we can assist you, please contact our Ms. Rainbow Ip, Mr. Kenneth Leung or Mr. Ronnie Tse.

This article is for information purposes only. Its content does not constitute legal advice and should not be treated as such. Stevenson, Wong & Co. will not be liable to you in respect of any special, indirect or consequential loss or damage arising from or in connection with any decision made, action or inaction taken in reliance on the information set out herein.

We are honoured to announce that Partner and Head of the Corporate Finance Department, Hank Lo, has once again been named one of “The A-List Elite Lawyers” by the prestigious legal publication, China Business Law Journal (CBLJ).

This distinction marks the sixth consecutive year that Mr. Lo has received this accolade. Following his inclusion in 2024, he has once again been listed in the highest tier, the “Visionaries” category, underscoring his exceptional professional expertise and leadership within the industry.

The CBLJ “The A-List Elite Lawyers” list aims to honour top lawyers who have made significant contributions to the China market and China-related business. The selection process is based on extensive market research, incorporating thousands of nominations and independent evaluations from in-house counsel, company executives, and legal professionals.

The list is divided into three categories: “Visionaries,” “Growth Drivers,” and “Rising Stars.” The “Visionaries” category specifically celebrates senior legal leaders who excel both within their firms and across the broader industry. These elite individuals typically hold pivotal roles such as managing partners or department heads, leveraging their strategic foresight to contribute to the advancement of the legal profession.

Mr. Lo possesses over three decades of extensive experience in capital markets, corporate finance, mergers and acquisitions, and corporate compliance. Recently, he has been admitted to practise as a solicitor in the United Arab Emirates and actively expanding the firm’s legal services into the UAE and the Middle East to facilitate Chinese enterprises with their “going global” strategies and international expansion.

We extend sincere gratitude to CBLJ for this recognition and offer most heartfelt thanks to our  clients for their unwavering trust and support.

For further details, please contact our Partner, Hank Lo, or view the official report on the CBLJ website here.