Supervisory Co-operation

Co-operation with Other Supervisory Authorities in Hong Kong

Banks offer a wide range of products and services. Apart from providing traditional deposit and loan services, banks also sell investment, insurance and MPF products to customers. Therefore, the HKMA needs to work closely with other regulators to ensure comprehensive protection of public interests.

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  • Securities and Futures Commission

    The HKMA and the Securities and Futures Commission (SFC) work very closely to ensure that there is an open market for all intermediaries in the securities industry of Hong Kong. The HKMA has entered into a Memorandum of Understanding 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.

  • Insurance Authority

    The HKMA and the Insurance Authority (IA) entered into a new Memorandum of Understanding which sets out the framework for coordinating the regulation and supervision of entities or financial groups in which the two regulators have a common regulatory interest, and the collaborative arrangements with respect to the regulation and supervision of authorized institutions’ businesses of regulated activities under the Insurance Ordinance. The new Memorandum of Understanding takes effect when the new insurance regime under the Insurance Ordinance comes into operation on 23 September 2019 and supersedes the previous Memorandum of Understanding between the HKMA and the IA.

  • Hong Kong Deposit Protection Board

    The Hong Kong Deposit Protection Board (the Board) is a statutory body established under the Deposit Protection Scheme Ordinance to administer the Deposit Protection Scheme in Hong Kong. The Scheme provides protection for deposits up to HK$500,000 per depositor per member bank. Sharing the objective of promoting the stability of the banking system, the HKMA and the Board have signed a Memorandum of Understanding. The Board is required by the Deposit Protection Scheme Ordinance to perform its functions through the HKMA, while the HKMA provides support to the Board on a day-to-day basis.

  • Financial Reporting Council

    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 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.

  • Across supervisory authorities
    • Under the statutory regime for the regulation of Mandatory Provident Fund (MPF) intermediaries effective since 1 November 2012, the Mandatory Provident Fund Schemes Authority is the lead regulator in respect of regulation of MPF intermediaries whereas the Monetary Authority, the Insurance Authority and the SFC are the frontline regulators of the MPF intermediaries. A Memorandum of Understanding Concerning the Regulation of Regulated Persons with Respect to Registered Schemes under the Mandatory Provident Fund Schemes Ordinance has been signed by the four regulators. It sets out certain administrative and operational arrangements among the four regulators regarding the exercise of their respective functions under the Mandatory Provident Fund Schemes Ordinance concerning regulation of MPF intermediaries. Meanwhile, the Memorandum of Understanding Concerning the Regulation of MPF Intermediaries updated on 1 January 2004 has ceased to apply since 1 November 2012 except for the handling of complaints concerning the conduct of MPF intermediaries prior to 1 November 2012.
    • The HKMA, Customs and Excise Department, Insurance Authority and SFC have signed a Memorandum of Understanding to set out the framework for co-operation and exchange of information between them concerning implementation of the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (Cap. 615).
    • The Financial Dispute Resolution Centre Limited (FDRC) is a non-profit making organisation which provides 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 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.

Co-operative Arrangements with Supervisory Authorities Outside Hong Kong

As an international financial centre, Hong Kong not only attracts foreign banks to operate in Hong Kong, but local banks are also active in other overseas markets. To enhance the exchange of supervisory information and co-operation, the HKMA has entered into Memoranda of Understanding (MoUs) or other formal arrangements with the relevant banking supervisory authorities outside Hong Kong:
 

Jurisdictions Supervisory Authorities Types of Arrangements
Australia Australian Prudential Regulation Authority MoU
Belgium Financial Services and Markets Authority
National Bank of Belgium
Letters on Co-operations and Sharing of Information
Canada The Office of the Superintendent of Financial Institutions MoU
Cambodia National Bank of Cambodia MoU
Mainland China China Banking and Insurance Regulatory Commission MoU
Denmark The Danish Financial Supervisory Authority MoU
France Autorité de contrôle prudentiel et de résolution Letters on Co-operation and Sharing of Information
Germany Bundesanstalt fur Finanzdienstleistungsaufsicht MoU
India Reserve Bank of India MoU
Indonesia Bank Indonesia MoU
Japan Financial Services Agency Letters on Co-operations and Sharing of Information
Liechtenstein The Financial Market Authority Liechtenstein MoU
Macau Autoridade Monetaria De Macau MoU
Mauritius Bank of Mauritius MoU
Pakistan State Bank of Pakistan MoU
Philippines Bangko Sentral ng Pilipinas MoU
South Africa The South African Reserve Bank MoU
South Korea The Financial Supervisory Commission of Korea MoU
Switzerland Swiss Financial Market Supervisory Authority MoU
Taiwan Financial Supervisory Commission MoU
Thailand The Bank of Thailand Statement of Co-operation
United Kingdom Financial Conduct Authority
Prudential Regulation Authority
MoU &
Side Letter
United States New York State Department of Financial Services
The Board of Governors of the Federal Reserve System, Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation
MoU & 
Statement of Co-operation
Vietnam State Bank of Vietnam MoU

In general, the co-operative arrangements provide the formal framework under which the HKMA and its counterparts agree to:

  • share and exchange, to the extent permitted by law, supervisory information so as to assist in the supervision of banks that operate in both jurisdictions;
  • hold regular meetings and have informal contacts to discuss matters of common interest;
  • consult each other regarding any cross-border establishment or investment by the banks; and
  • keep the supervisory information shared confidential and to restrict the sharing, use and onward disclosure of such information in accordance with the provisions of the arrangements.

The HKMA continues to extend its bilateral co-operation with banking supervisors in other economies, and contact or hold regular meetings with other supervisory authorities to discuss matters of common interest where necessary.

The HKMA has entered into MoU with competent authorities of 30 European Union or European Economic Area jurisdictions respectively (Note 1) concerning consultation, cooperation and the exchange of information related to the supervision of authorized institutions acting as depositaries appointed for alternative investment funds under the Alternative Investment Fund Managers Directive (AIFMD MoU). The AIFMD MoU, as required by the AIFMD (Note 2), are in identical terms and conditions. 

Notes:

  1. The 30 European Union or European Economic Area jurisdictions are Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Ireland, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Romania, Sweden, Slovak Republic, the United Kingdom, Spain and Gibraltar.
  2. AIFMD refers to the Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010.

Last revision date : 23 September 2019