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The Securities and Futures Commission (SFC) and the Financial Reporting Council (FRC) have concluded a new Memorandum of Understanding (MoU)​ to strengthen the regulation of the capital markets through enhanced collaboration between the two regulators (Note).

Under the new MoU, which took effect yesterday, the SFC and the FRC agreed to foster closer cooperation in the regulation of the securities and futures market, particularly in relation to the regulation under their respective supervisory regimes of listed entity auditors and compliance by listed entities with financial reporting requirements.

The enhanced collaboration between the SFC and the FRC under the new MoU, which includes case referrals, joint investigations, mutual assistance, capacity building and the exchange and use of information, will increase the overall effectiveness of both regulators in ensuring the quality of financial reporting by listed entities and the audit quality of listed entity auditors. It will also help maintain the integrity of Hong Kong’s capital market and its reputation as an international financial centre.​

Note: The new MoU supersedes the MoU between the SFC and the FRC signed in 2007.

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