Supervisory Co-operation

The HKMA and the Securities and Futures Commission (SFC) work very closely to ensure that there is an open market with a level playing field for all intermediaries in the securities industry of Hong Kong. The HKMA has entered into a revised Memorandum of Understanding (PDF File, 307KB) with the SFC, which elaborates on the legal framework and sets out the operational details relating to the respective roles and responsibilities of the two regulators regarding the securities related activities of authorized institutions. The HKMA and the SFC hold regular meetings under the Memorandum of Understanding to discuss matters of mutual interest. The training programmes of either regulator are also made available to the staff of the other where relevant.

The HKMA and the Insurance Authority have signed a Memorandum of Understanding (PDF File, 1.1MB) to enhance the co-operation, exchange of information and mutual assistance between the two authorities. Under this Memorandum of Understanding, the HKMA and the Insurance Authority agree to work together to co-ordinate the supervision of the insurance-related activities of authorized institutions (such as when they act as insurance intermediaries) and authorized insurers that are connected to them and to promote information exchange and sharing, as permitted under the Banking Ordinance and the Insurance Companies Ordinance, between the HKMA and the Insurance Authority in order to assist each other to exercise their respective statutory functions.

While the Mandatory Provident Fund Schemes Authority is the lead regulator in respect of mandatory provident fund (MPF) business, the HKMA, the Insurance Authority and the SFC are responsible for supervising the conduct of MPF intermediary activities by persons under their respective regime. A Memorandum of Understanding Concerning the Regulation of MPF Intermediaries (PDF File, 1.9MB) has been signed by the four regulators. This Memorandum aims to ensure conformity in regulatory approach, minimise duplication of regulatory efforts, close gaps in regulatory boundaries, minimise mis-selling by MPF intermediaries and maximise protection of MPF scheme participants.

The Hong Kong Deposit Protection Board (HKDPB) is a statutory body established under the Deposit Protection Scheme Ordinance to administer the Deposit Protection Scheme in Hong Kong. The Scheme provides a protection for deposits of up to HK$500,000 per depositor per bank. The HKMA and the HKDPB share the objective of promoting the stability of the banking system and have agreed on how the two organisations should co-operate in performing their respective functions. Since the Ordinance requires the HKDPB to perform functions through the HKMA, detailed arrangements for co-operation have been set out in a Memorandum of Understanding between them.

The Financial Reporting Council (FRC) is a statutory body established by the Financial Reporting Council Ordinance to investigate into auditing and reporting irregularities in relation to listed entities, and to enquire into non-compliances with relevant accounting requirements in listed entities' financial reports. The Ordinance provides that the FRC shall notify the HKMA where the listed entity that is the subject of investigation or enquiry is an authorized institution or its related company (i.e. controller, subsidiary or fellow subsidiary), and that the investigator or enquirer has to consult the HKMA prior to exercising the relevant powers under the Ordinance for the purpose of such investigation or enquiry. The HKMA and the FRC have entered into a Memorandum of Understanding (PDF File, 274KB) to elaborate on the mechanisms for communication and information exchange between the two entities, as well as to enhance the ongoing cooperation and mutual assistance.

The Financial Dispute Resolution Centre Limited (FDRC) is a non-profit making organisation which provides individual customers with an independent and affordable avenue, as an alternative to litigation, for resolving monetary disputes with financial institutions. The FDRC administers a financial dispute resolution scheme (the Scheme) by way of “mediation first, arbitration next”. All financial institutions authorized/licensed by the HKMA/SFC are members of the Scheme and agree to abide by the rules and procedures in respect of the Scheme. The HKMA, together with the SFC, has signed a Memorandum of Understanding (PDF File, 417KB) with the FDRC to delineate the respective roles and responsibilities between the FDRC and the two regulators as well as the information sharing arrangements, including the FDRC providing information relating to systemic issues and/or suspected serious misconduct cases to the regulators. The information will assist the HKMA in identifying systemic and/or misconduct issues as soon as practicable, and appropriate supervisory actions can be taken on a timely basis.