英文證券卷三 HKSI Paper 3 第一章

Answer A is not an structured product since the return of none of them is tied to the other in any way.

People who hold rights to trade and have registered to be participants of options exchanges can trade stock options directly. Although market participants have to be type 1 licensed corporations, type 1 licensed corporations don’t necessarily hold rights to trade and are registered as market participants.

Objectives of the SFO:
I. Promoting fair, orderly and transparent markets
II. Build an advanced technological infrastructure that is flexible enough to accommodate new products and other new services
III. Regulators are highly transparent and accountable to stakeholders through a mechanism of checks and balances

Promoting cooperation among financial regulators around the world is not the goal of the SFO.

Although there are ten types of regulated activity, the SFC will grant to a person only one licence (or registration) which will enable the holder to undertake one or more of the ten regulated activities. This is normally referred to as the “single licence regime”.

Although there are ten types of regulated activity, the SFC will grant to a person only one licence (or registration) which will enable the holder to undertake one or more of the ten regulated activities. This is normally referred to as the “single licence regime”.

AFIs (including banks) that are authorised and regulated by the HKMA and conduct the SFC regulated activities must be registered with the SFC as “Registered Institutions”, such status having been set up as a special category because of the special features of AFIs.

The HKMA and the SFC must work closely together in relation to any SFC-regulated activities that are carried out by registered
institutions. To this end, a memorandum of understanding (“MOU”) has been signed between the two regulators, setting out their roles and responsibilities so as to minimise overlaps under the regulatory regime.

Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-regulated activity. Clearly, the HKMA and the SFC must work closely together in relation to any SFC-regulated activities that are carried out by registered institutions. To this end, a memorandum of understanding (“MOU”) has been signed between the two regulators, setting out their roles and responsibilities so as to minimise overlaps under the regulatory regime. The Insurance Authority is the major regulator of the insurance industry in Hong Kong.

As the frontline regulator of AFIs is the HKMA, the latter takes the leading role in vetting applications for such registration and in supervising their SFC-regulated activities, including carrying out on-site inspections. The HKMA applies all SFC criteria, such as the “fit and proper” criteria, in supervising AFIs registered with the SFC.

As the frontline regulator of AFIs is the HKMA, the latter takes the leading role in vetting applications for such registration and in supervising their SFC-regulated activities, including carrying out
on-site inspections. The HKMA applies all SFC criteria, such as the “fit and proper” criteria, in supervising AFIs registered with the SFC.

As the frontline regulator of AFIs is the HKMA, the latter takes the leading role in vetting applications for such registration and in supervising their SFC-regulated activities, including carrying out on-site inspections.

Any person that wish to conduct a regulated activity must be licensed by the SFC.

Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as
registered institutions if they wish to carry out an SFC-regulated activity. As the frontline regulator of AFIs is the HKMA, the latter takes the leading role in vetting applications for such registration and in supervising their SFC-regulated activities, including carrying out on-site inspections. The HKMA applies all SFC criteria, such as the “fit and proper” criteria, in supervising AFIs registered with the SFC.

Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-regulated activity. The HKMA may refer cases of suspected malpractice by registered institutions in respect of the SFC-regulated activities to the SFC, which may directly review those institutions.

Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-regulated activity.

Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-regulated activity.

AFIs (including banks) that are authorised and regulated by the HKMA and conduct the SFC regulated activities must be registered with the SFC as “Registered Institutions”, such status having been set up as a special category because of the special features of AFIs. They are jointly regulated by the HKMA and the SFC, with the HKMA being the front-line regulator that will apply all SFC regulatory criteria, including fitness and properness and business conduct, other than capital adequacy, the handling of client money and the audit requirements in supervising them.

The provisions of the SFO have different applications to the following different classes of person:
(b) “registered institution”, which refers to authorised financial institutions (“AFIs”) directly supervised by the Hong Kong Monetary Authority (“HKMA”) and registered with the SFC.

Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-regulated activity. As the frontline regulator of AFIs is the HKMA, the latter takes the leading role in vetting applications for such registration and in supervising their SFC-regulated activities, including carrying out
on-site inspections. The HKMA applies all SFC criteria, such as the “fit and proper” criteria, in supervising AFIs registered with the SFC.

Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-regulated activity. As the frontline regulator of AFIs is the HKMA, the latter takes the leading role in vetting applications for such registration and in supervising their SFC-regulated activities, including carrying out
on-site inspections. The HKMA applies all SFC criteria, such as the “fit and proper” criteria, in supervising AFIs registered with the SFC.

The objectives of the SFO are to provide a regulatory framework which:
(a) promotes a fair, orderly and transparent market;
(b) is flexible enough to cope with new products and other innovations, and further advances in technological infrastructure;
(c) is administered by a regulator with sufficient powers and discretion whose operations are transparent and who is accountable to the stakeholders through a system of adequate
checks and balances; and
(d) is on a par with international standards and compatible with international practices, but tailored to meet local needs and circumstances.

The regulator must ensure that a licensed corporation has enough capital within the corporation (or available to it from external sources):
(a) to support the level of its business activities.

The SFO grants the SFC powers to make detailed
rules relating to:
(a) their financial resources;
(b) the handling of client money and other client assets;
© the keeping of accounts and records; and
(d) auditing matters.

The SFC has made the Accounts and Audit Rules specifying the form and contents of financial statements and other documents that licensed corporations and associated entities of intermediaries (both licensed corporations and registered institutions) should prepare and the content of auditors’ reports.

The SFC mainly makes subsidiary legislation for the following areas:
1. Financial resources
2. Client Money
3. Client Securities
4. Accounts and Audit
5. Keeping records
6. Professional investors
7. Contract Notes

The corporate (including its officers e.g. directors, managers, etc.) and individual applicants for licensing or registration have to satisfy fitness and properness requirements stated in the Fit and Proper Guidelines. These requirements apply to applicants and to licensed and registered persons on an ongoing basis. Compliance with the requirements will be monitored by the HKMA in the case of AFIs and their executive officers and staff, and by the SFC in the case of others.

The SFC may enquire into or investigate suspected breaches of the SFO and any subsidiary legislation, codes and guidelines:
(d) Codes and guidelines do not have the force of law and are not legally enforceable. However, the SFC is able to penalise licensed or registered persons breaching the codes and guidelines by applying the blanket principle that a breach of these may impugn the licensed or registered person’s fitness and properness to remain licensed or registered.
€ The SFC has the power to reprimand (privately or publicly), to fine and to suspend or revoke a licence or registration in relation to all or any part of the regulated activities specified on the licence or certificate of registration.

The SFC may enquire into or investigate suspected breaches of the SFO and any subsidiary legislation, codes and guidelines:
(d) Codes and guidelines do not have the force of law and are not legally enforceable. However, the SFC is able to penalise licensed or registered persons breaching the codes and guidelines by applying the blanket principle that a breach of these may impugn the licensed or registered person’s fitness and properness to remain licensed or registered.

Codes and guidelines do not have the force of law and are not legally enforceable. However, the SFC is able to penalise licensed or registered persons breaching the codes and guidelines by applying the blanket principle that a breach of these may impugn the licensed or registered person’s fitness and properness to remain licensed or registered.

The SFC may enquire into or investigate suspected breaches of the SFO and any subsidiary legislation, codes and guidelines:
(a) Breaches of the SFO and subsidiary legislation are legal offences and will be investigated by the SFC and enforcement action taken; the SFC may refer serious cases to law enforcement agencies such as the Commercial Crimes Bureau (“CCB”) of the Hong Kong Police Force or the Independent Commission Against Corruption (“ICAC”) for investigation and action.
(b) The SFC may also apply to the courts for an injunction to restrain a person from dealing with his assets, or from carrying on all or a part of his business, if it can make a case to show that it is in the public interest to issue such an order.

The SFC may enquire into or investigate suspected breaches of the SFO and any subsidiary legislation, codes and guidelines:
(d) Codes and guidelines do not have the force of law and are not legally enforceable.
However, the SFC is able to penalise licensed or registered persons breaching the codes and guidelines by applying the blanket principle that a breach of these may impugn the licensed or registered person’s fitness and properness to remain licensed or registered.

The SFC may enquire into or investigate suspected breaches of the SFO and any subsidiary legislation, codes and guidelines: (d) Codes and guidelines do not have the force of law and are not legally enforceable.
However, the SFC is able to penalise licensed or registered persons breaching the codes and guidelines by applying the blanket principle that a breach of these may impugn the licensed or registered person’s fitness and properness to remain licensed or registered.

The SFC may enquire into or investigate suspected breaches of the SFO and any subsidiary legislation, codes and guidelines: (d) Codes and guidelines do not have the force of law and are not legally enforceable.
However, the SFC is able to penalise licensed or registered persons breaching the codes and guidelines by applying the blanket principle that a breach of these may impugn the licensed or registered person’s fitness and properness to remain licensed or registered.

The SFC may enquire into or investigate suspected breaches of the SFO and any subsidiary legislation, codes and guidelines:
(c) Persons prejudiced by the perpetration of market misconduct may take civil action against the wrongdoer through the courts to obtain redress. The SFO has provisions for the findings of the Market Misconduct Tribunal to be admissible in evidence in private civil actions.
(d) Codes and guidelines do not have the force of law and are not legally enforceable. However, the SFC is able to penalise licensed or registered persons breaching the codes and guidelines by applying the blanket principle that a breach of these may impugn the licensed or registered person’s fitness and properness to remain licensed or registered.

Section 194, SFO provides that if a “regulated person” is guilty of “misconduct”, or is not a fit and proper person, the SFC may:
(a) in the case of a licensed corporation or representative, revoke or suspend the licence in respect of all or part of the licensed regulated activity;
(b) in the case of a responsible officer (see section 1.3 of Topic 4 for the definition of this term), revoke or suspend approval as a responsible officer;
(c) publicly or privately reprimand the regulated person;
(d) prohibit the regulated person from applying for a licence, registration, approval as a responsible officer or entry in the HKMA register, or to act as an executive officer; and
(e) separately or in addition order the regulated person to pay a penalty up to the greater of HK$10 million or three times any profit gained or loss avoided as a result of his misconduct.

A failure on the part of an intermediary or its representative to comply with a code of conduct is not a breach of law and does not by itself constitute an offence under the law.
However, it should be noted that breaches of codes of conduct may be taken into account in two important respects:
(b) a court hearing legal proceedings under the SFO shall consider the provisions of the codes if the court considers it relevant to the determination of any question arising in
the proceedings. This gives the codes a degree of legal recognition.

The laws passed by the Legislative Council of the Hong Kong Special Administrative Region (“LegCo”) are called ordinances. They are enacted by the Chief Executive of the
Hong Kong Special Administrative Region (“HKSAR”) with the advice of LegCo. Some laws are made by a process of delegation from LegCo to other bodies, such delegation usually being done under an ordinance. For example, the Securities and Futures Commission (“SFC”) has extensive powers to make rules under the Securities and Futures Ordinance (“SFO”). This process is, in the case of the SFC, generally required to be completed by a process of tabling in LegCo, which gives LegCo an opportunity to review the subsidiary legislation before it becomes law.

These are some of the Major Subsidiary Legislation:
1.1 Securities and Futures (Financial Resources) Rules
1.2 Securities and Futures (Client Securities) Rules
1.3 Securities and Futures (Client Money) Rules
1.4 Securities and Futures (Keeping of Records) Rules
1.5 Securities and Futures (Contract Notes, Statements of Account and Receipts) Rules
1.6 Securities and Futures (Accounts and Audit) Rules,
plus many others.

Regulated short selling is defined in Schedule 1, SFO and in the Eleventh Schedule of the Rules of the Exchange to mean the sale of a security in respect of which the seller, or a person for whose benefit or on whose behalf the sale is made, has a currently exercisable and unconditional right to vest the security in the purchaser by virtue of:
(a) having under an securities borrowing and lending (“SBL”) agreement.
(b) a title to other security which is convertible into or exchangeable for the security to which the sale relates;
© an option to acquire the security to which the sale relates;
(d) rights or warrants to subscribe for and receive the security to which the sale relates; or
€ having entered into with another person an agreement or an arrangement of a description prescribed by rules made under s. 397, SFO.

Regulated short selling is defined in Schedule 1, SFO and in the Eleventh Schedule of the Rules of the Exchange to mean the sale of a security in respect of which the seller, or a person for whose benefit or on whose behalf the sale is made, has a currently exercisable and unconditional right to vest the security in the purchaser by virtue of:
(a) having under an securities borrowing and lending (“SBL”) agreement.
(b) a title to other security which is convertible into or exchangeable for the security to which the sale relates;
© an option to acquire the security to which the sale relates;
(d) rights or warrants to subscribe for and receive the security to which the sale relates; or
€ having entered into with another person an agreement or an arrangement of a description prescribed by rules made under s. 397, SFO.

The Investor Compensation Fund is managed by the Investor Compensation Company Limited in terms of operation, management, and administration. The Investor Compensation Fund is designed to deal with listed stocks of the SEHK and products traded at the Hong Kong Futures Exchange Limited. The Investor Compensation Fund sets a limited quota for each claimant.

The Investor Compensation Fund is important because it can enhance the confidence of investors.

Only corporations may become intermediaries. A corporation that obtains a licence will be regarded as a “licensed corporation” unless it is an AFI, in which case it will be regarded as a “registered institution”. Together they are referred to as “intermediaries”. The distinction between the licensing of corporations and the registration of AFIs is reviewed in further detail in section 1 of Topic 4.

Breaches of the SFO and subsidiary legislation are legal offences and will be investigated by the SFC and enforcement action taken; the SFC may refer serious cases to law enforcement agencies such as the Commercial Crimes Bureau (“CCB”) of the Hong Kong Police Force or the Independent Commission Against Corruption (“ICAC”) for investigation and action.

Registered Institutions need to adhere to the Code of Conduct.

PIs are generally persons who are highly experienced in making investments and investment decisions. They would include the class of persons described above as institutional investors.
Details of the definitions of PIs will be discussed in section 2 of Topic 5. Under the SFC’s regulations, PIs are not automatically provided with the same level of regulatory protection as retail investors.

Although there are ten types of regulated activity, the SFC will grant to a person only one licence (or registration) which will enable the holder to undertake one or more of the ten regulated activities. This is normally referred to as the “single licence regime”.

The objectives of the SFO are to provide a regulatory framework which:
(a) promotes a fair, orderly and transparent market;
(b) is flexible enough to cope with new products and other innovations, and further advances in technological infrastructure;
(c) is administered by a regulator with sufficient powers and discretion whose operations are transparent and who is accountable to the stakeholders through a system of adequate
checks and balances.

The objectives of the SFO are to provide a regulatory framework which:
(a) promotes a fair, orderly and transparent market;
(b) is flexible enough to cope with new products and other innovations, and further advances in technological infrastructure;
(c) is administered by a regulator with sufficient powers and discretion whose operations are transparent and who is accountable to the stakeholders through a system of adequate
checks and balances.

The SFC is an independent statutory body, not a government department.

The SFC was created by law under the Securities and Futures Commission Ordinance (now repealed and subsumed in the SFO). It is independent, meaning that it is not part of the Government machinery of the Civil Service or the ministerial system. Nevertheless, it reports to and is accountable to the Government as described in section 2 above.

The SFC was created by law under the Securities and Futures Commission Ordinance (now repealed and subsumed in the SFO). It is independent, meaning that it is not part of the
Government machinery of the Civil Service or the ministerial system. Nevertheless, it reports to and is accountable to the Government as described in section 2 above. It is considered the securities and futures market prime regulator.

The SFC was created by law under the Securities and Futures Commission Ordinance (now repealed and subsumed in the SFO). It is independent, meaning that it is not part of the
Government machinery of the Civil Service or the ministerial system. Nevertheless, it reports to and is accountable to the Government.

The SFC’s Corporate Finance Division monitors listed companies’ announcements and identifies misconduct or non-compliance by listed companies.

Corporate Finance Division:
(a) administers The Codes on Takeovers and Mergers and Share Buy-backs and regulates takeovers, mergers and share buy-backs of applicable companies;
(b) supervises the listing-related activities of The Stock Exchange of Hong Kong Limited (“SEHK”).

Exchanges and clearing houses are supervised by the Supervision of Markets Division of the SFC. Intermediaries are supervised by the Intermediaries Division of the SFC. Market Misconduct Tribunal is independent of the SFC and not supervised by it.

The SFC supervises and monitors the activities of HKEX, the exchange companies and the clearing houses, approves their rules and amendments to the rules, approves the fees they charge, and administers and enforces the applicable legislation. It also carries out regular reviews of these activities.

The SFC is responsible for the regulation of all securities and futures activities, including the regulatory activities carried out by banks. It is also responsible for regulating the exchange controller.

Except in relation to the management of business risk, and the enforcement of their own listing, trading, clearing and settlement rules, HKEX, the exchanges and the clearing houses are not responsible for front-line prudential and conduct regulation of market participants, which is carried out by the SFC.

Licensing Department:
(a) licenses corporations and individuals seeking to conduct business in Hong Kong in the regulated activities for which a licence is required under the SFO.

Intermediaries Supervision Department:
(a) supervises the business conduct of licensed corporations and individual licensees on an ongoing basis, by conducting on-site inspection and off-site monitoring; and
(b) monitors the financial integrity of licensed corporations.

The SFC may (i) conduct supervisory inspections for the purposes of ascertaining whether an intermediary or an associated entity of an intermediary has complied with the SFO and
any related notices and requirements, any terms and condition of any licence or registration, or any other imposed condition; or (ii) require copies of documents or inquire into the affairs of a licensed corporation or its related corporations for the purpose of providing assistance, in relation to the licensed corporation, to an authority or regulatory organisation outside Hong Kong.

Except in relation to the management of business risk, and the enforcement of their own listing, trading, clearing and settlement rules, HKEX, the exchanges and the clearing houses are not responsible for front-line prudential and conduct regulation of market participants, which is carried out by the SFC.

HKEX is not responsible for front-line prudential regulation of market participants. Such task is the responsibility of the SFC.

The Securities Commission option is wrong, the correct name is Securities and Futures Commission.

An expression used by the SFC to explain its approach to regulation is that it is “risk-based”. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.

An expression used by the SFC to explain its approach to regulation is that it is “risk-based”. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.

An expression used by the SFC to explain its approach to regulation is that it is “risk-based”. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.

An expression used by the SFC to explain its approach to regulation is that it is “risk-based”. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.

SFC adopts a“risk-based”approach towards regulations. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.

An expression used by the SFC to explain its approach to regulation is that it is “risk-based”. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.

Encouraging the development of new products, operating profitable exchanges in Hong Kong and reducing trading hours are all actions. They are action verbs but not objective description. Objectives can only be objective description, therefore, these phrases can never be objectives and primary objective of Hong Kong financial regulators. Objectives are status that financial regulators hope for, enhancing confidence is an objective description that financial regulators hope for.

The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(c) provide protection to the investing public;
(f) assist the Financial Secretary in maintaining the financial stability of Hong Kong by taking appropriate steps in relation to the industry.

The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(a) maintain and promote the fairness, efficiency, competitiveness, transparency and orderliness of the market;
(b) promote public’s understanding of the industry including its operation and functioning;
© provide protection to the investing public;
(d) minimise crime and misconduct in the market;
€ reduce systemic risks in the industry; and
(f) assist the Financial Secretary in maintaining the financial stability of Hong Kong by taking appropriate steps in relation to the industry.
Providing protection for major shareholders is not one of these objectives.

The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(d) minimise crime and misconduct in the market.

The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(b) promote public’s understanding of the industry including its operation and functioning;
(d) minimise crime and misconduct in the market

SFO treats all investors fairly and equally. Regulators should be transparent and its power should be in check.

The SFC’s main objectives in exercising its enforcement powers:
I. Protection of investors
II. Maintenance of Market Integrity and Confidence
III. Holding offenders accountable for their actions

The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(b) promote public’s understanding of the industry including its operation and functioning;
(d) minimise crime and misconduct in the market.

Authorizing self-regulatory bodies and professional bodies to set up committees is not the main function of the SFC.

The functions and powers of the SFC are wide and are set out in s. 5, SFO. The principal functions are to:
(c) promote, encourage and enforce the proper conduct, competence and integrity of persons carrying on regulated activities;
(g) promote, encourage and enforce internal control and risk management systems by persons carrying on regulated activities, including registered institutions in the case of any regulated activities they conduct.

The functions and powers of the SFC are wide and are set out in s. 5, SFO. The principal functions are to:
(b) supervise, monitor and regulate the activities of:
(i) recognised exchange, clearing houses, exchange controllers and investor compensation companies or persons carrying on regulated activities; and
(ii) registered institutions that are regulated or to be regulated by the SFC under any relevant provisions.

Enforcement of the Listing Rules is the job of the SEHK.

The SFC was created by law under the Securities and Futures Commission Ordinance (now repealed and subsumed in the SFO). It is independent, meaning that it is not part of the
Government machinery of the Civil Service or the ministerial system. Nevertheless, it reports to and is accountable to the Government as described in section 2 above.

Frequent Intervention is not an objective of financial regulators in Hong Kong. Providing Investment advice is not a job that regulators will do, it’s the job of intermediaries.

Hong Kong Exchange is the exchange designated by Hong Kong and the controller of clearing company. The subsidiary of Hong Kong Exchange includes The Stock Exchange of Hong Kong Limited, which is responsible for the trading and clearing of securities and futures contract.

HKEX is a listed company on the SEHK. On 6 March 2000, the SEHK, HKFE and the three associated clearing houses – Hong Kong Securities Clearing Company Limited, The SEHK
Options Clearing House Limited and HKFE Clearing Corporation Limited – became wholly owned subsidiaries of HKEX. HKEX is an exchange controller recognised by the SFC under s. 59, SFO.

HKFE are denominated in
I. USD
II. CNH

There are currently two exchanges:
(a) the SEHK, which provides for trading in securities as defined earlier on two boards, the Main Board and Growth Enterprise Market; and
(b) HKFE, which provides for trading in futures contracts. This includes Index futures, options and stocks futures.

The Hong Kong Futures Automated Trading System (“HKATS”) is an electronic screen-based trading system used for trading in HKFE products as well as Traded Options which are products of the SEHK.

The Hong Kong Futures Automated Trading System (“HKATS”) is an electronic screen-based trading system used for trading in HKFE products as well as Traded Options which are products of the SEHK.

The Hong Kong Futures Automated Trading System (“HKATS”) is an electronic screen-based trading system used for trading in HKFE products as well as Traded Options which are products of the SEHK.

The Hong Kong Futures Automated Trading System (“HKATS”) is an electronic screen-based trading system used for trading in HKFE products as well as Traded Options which are products of the SEHK.

Stock options are traded through the Hong Kong Futures Automated Trading System (HKATS).

The Hong Kong Futures Automated Trading System (“HKATS”) is an electronic screen-based trading system used for trading in HKFE products as well as Traded Options which are products of the SEHK.

Only the SFC’s licensed or registered persons may have access to the trading systems and facilities of HKFE, whether directly or indirectly, in order to carry out the Type 2 regulated activity of dealing in futures contracts.

Korea, Canada, and New Zealand don’t have the remote access to HKATS. The United States, England, and Australia have the remote access to HKATS.

Remote access is currently allowed from the United States, the United Kingdom and Australia.

HKEX is not the venue for buying and selling Hong Kong stocks. HKEX is an exchange controller. HKEX’s subsidiary SEHK is the venue for buying and selling Hong Kong stocks. The SFC is responsible for licensing and registration of intermediaries. Stamp duty is a source of income of the government of the HKSAR.

HKEX is an exchange controller recognised by the SFC under s. 59, SFO.

The SEHK and HKFE are recognised under s. 19, SFO as exchange companies that may operate a stock market and a futures market in Hong Kong respectively.

HKEX is an exchange controller recognised by the SFC under s. 59, SFO.

On 6 March 2000, the SEHK, HKFE and the three
associated clearing houses – Hong Kong Securities Clearing Company Limited, The SEHK Options Clearing House Limited and HKFE Clearing Corporation Limited – became wholly owned subsidiaries of HKEX.

Upon merger and demutualisation, the two exchanges and three
clearing houses (HKSCC, SEOCH and HKCC) became the wholly owned subsidiaries of HKEX and “participantship” of the exchanges and clearing houses was introduced. They became the three major clearing houses in Hong Kong.

HKEX is responsible for ensuring an orderly and fair market in securities and futures contracts traded on or through the SEHK and HKFE, respectively. HKEX is required to ensure that risks are managed prudently, to act in the interests of the public, having
particular regard to the interests of the investing public, and to ensure that where such interests conflict with any other interests the former shall prevail. The SEHK is also responsible for administering the Listing Rules.

Except in relation to the management of business risk, and the enforcement of their own listing, trading, clearing and settlement rules, HKEX, the exchanges and the clearing houses are not responsible for front-line prudential and conduct regulation of market participants, which is carried out by the SFC.

Retail investors are usually defined to be individuals or small businesses and companies who invest in relatively small amounts of money for themselves rather than on behalf anyone else.
From a regulatory point of view, these investors need the most protection under the regulatory regime, as they are less sophisticated.

Registered institutions are regulated by the HKMA. They have to be registered with the SFC if they wish to carry out SFC regulated activities but the front line regulator will be the HKMA.