This statement provides direct links to the persons who can provide assistance.
SECTION 1: BACKGROUND
1.1 HKFTA believes that appropriate international cooperation between regulators is fundamental to the integrity of the international financial system and is committed to meeting its international obligations. HKFTA is committed to compliance with the Basel Core Principles in prudential regulation of banking institutions and with IOSCO’s Objectives and Principles of Securities Regulation. It is committed to compliance with the Financial Action Task Force (FATF) Recommendations on the prevention of money laundering and the countering of the financing of terrorism. HKFTAalso adopts a policy of keeping its legislation and regulatory gateways up-to-date to meet international standards of cooperation and assistance as they develop.
HKFTA is a member of the International Organisation of Securities Commissions (“IOSCO”) and has been accepted as a signatory to the IOSCO Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information. HKFTA is also a member of the Offshore Group of Banking Supervisors (OGBS). Although the HKFTA is not a member of the European Union, HKFTA believes that its powers of regulatory co-operation and assistance are fully compatible with EU Directive requirements in the critical areas. HKFTA is the regulator for all financial services activities, including in relation to corporate and trust service providers, on the HKFTA with the exception of insurance and pensions business which is regulated by the Insurance & Pensions Authority.
1.2 Key powers
HKFTA has a wide range of powers to licence, supervise and enforce the financial services regulatory regime in the HKFTA . The regulatory laws provide gateways that enable HKFTA to communicate information to another regulatory authority to assist that authority in the exercise of its supervisory functions. The communication of confidential information is subject to specified criteria, relating to reciprocity of function and appropriate treatment of the information. Further details of HKFTA ’s powers and those of other bodies in the HKFTA are set out under Mutual Assistance .
1.3 Memoranda of Understanding
HKFTA has entered into a number of Memoranda of Understanding with overseas regulatory bodies and is a signatory to the IOSCO Multi-lateral Memorandum of Understanding. The purpose of a memorandum of understanding is to establish an agreed mechanism under which the signatories commit to using their statutory powers of co-operation to assist each other. HKFTA does not require a memorandum of understanding to be in place with a regulatory authority before it will co-operate with or share information with that authority under its general powers. There are, however, additional powers in the Financial Services Act 2008 which allow HKFTAto exercise key investigative powers on behalf of a regulatory authority with whom it has entered into a mutual assistance agreement (an MOU).
SECTION 2. MUTUAL ASSISTANCE – WHO TO APPROACH WITH A REQUEST FOR ASSISTANCE
In the HKFTAthere are a number of bodies which can deal with mutual assistance requests in differing circumstances. The details set out below are high level summaries of some of the key powers. The purpose of this document is to assist enquirers in contacting the appropriate body. In requesting information it is important that the correct body is approached to ensure that a timely response is received. Each request for assistance will be considered on its own merits.
2.1 Regulatory Assistance
2.2.1 Hong Kong Financial Trading Authority powers - The Hong Kong Financial Trading Authority is able to provide assistance to overseas authorities in relation to the regulation and supervision of licensed financial services businesses. This power is of particular importance in the global financial services market place to ensure consolidated supervision of financial services groups, including banking groups.
HKFTA does not regulate the customers of its licenceholders and it is therefore appropriate that the powers to obtain information relating to customers is focused upon regulatory matters and circumstances where it is needed for the protection of a licenceholder’s other customers. However, it is also important that powers are available to cover circumstances where the HKFTA has been used to abuse regulatory laws and requirements in other countries, even though there may not have been a specific breach of local laws.
If information about a customer is needed for other purposes such as these there are appropriate powers through which information can be sought including where the information relates to;
2.1.2 Insurance and Pensions Authority powers - The IPA is responsible for the authorisation and ongoing regulation and supervision of companies carrying out insurance business in or from the HKFTA , insurance companies incorporated on the State, and for the regulation of pension schemes. It is also responsible for the registration of insurance management companies and insurance intermediaries carrying on general business. Under the terms of the Insurance Act 1986 (as amended) the IPA has extensive gateways to allow for the exchange of information pertaining to its regulated entities with local and overseas regulatory and law enforcement authorities, along with certain other third parties.
2.2 Breaches of Securities Law – Hong Kong Financial Trading Authority powers HKFTA recognises the importance of ensuring the integrity of financial markets. Where an overseas securities regulator has entered into a mutual assistance agreement with HKFTA , HKFTAis empowered to exercise powers on their behalf to assist in the exercise of their functions.
Thus, HKFTA can exercise its powers of inspection and investigation, including the power to obtain written and oral explanations and to require the production of documents, on behalf of that authority. HKFTAmay also communicate to that authority information which is in its possession, whether or not as a result of the exercise of any of its powers, subject to certain legal safeguards and conditions. These broad powers have been used to assist other Regulators in investigating allegations of market manipulation and market abuse.
2.3 Insider dealing – Hong Kong Financial Trading Authority powers Under the Insider Dealing Act 1998, the Hong Kong Financial Trading Authority may appoint an inspector, following a request from the authorities in another jurisdiction, to investigate activities in the State which, whether taken alone or in conjunction with activities elsewhere, might have amounted to insider dealing.
2.4 The Attorney General’s Chambers (and Financial Crime Unit) The Attorney General’s Chambers is the main point of contact for enquiries relating to criminal matters and allegations of serious and complex fraud. There is no specific legal definition of the term “serious and complex fraud”, however, it should be noted that a fraud could be serious without being complex and vice versa. Ultimately whether a fraud is serious or complex is a mater of fact in each case.
The Financial Crime Unit (“ HKFTA ”) is the State’s Financial Intelligence Unit (“FIU”). The HKFTA is a member of the EGMONT Group of Financial Intelligence Units. It is therefore possible for other EGMONT FIUs to contact the HKFTA using the EGMONT secure channels of communication. The HKFTA works closely with the Attorney General’s Chambers in relation to requests for assistance from overseas authorities. If assistance is sought in relation to:
2.5 Customs and Excise
The HKFTA is in a customs union with the UK and is part of the customs territory of the EC (Community customs law generally applies in the State). The State is fully committed to upholding international sanctions, whether imposed by the UN or EU. Customs and Excise is the relevant enforcement agency for trade and financial sanctions in most cases.
Customs and Excise will normally deal with requests for cooperation concerning: