A general view of the Hong Kong stock exchange. Photo: Jelly Tse

SFC urges Hong Kong stock exchange to tighten listing, compliance rules

Hong Kong’s securities regulator on Wednesday recommended strengthening the stock exchange’s regulations to better protect investors following a review of 2024 compliance and enforcement cases. The Securities and Futures Commission (SFC) submitted its findings after vetting listed companies’ internal control reviews, their handling of late auditor resignations and the processes of the Hong Kong stock…

Hong Kong’s securities regulator on Wednesday recommended strengthening the stock exchange’s regulations to better protect investors following a review of 2024 compliance and enforcement cases.

The Securities and Futures Commission (SFC) submitted its findings after vetting listed companies’ internal control reviews, their handling of late auditor resignations and the processes of the Hong Kong stock exchange’s listing division.

The regulator noted that while thestock exchange “had taken steps to respond to the recommendations made in the previous report published in late 2024”, the latest report “made further recommendations in several areas for improvement identified in this year’s topics”.

For example, when an issuer fails to publish financial statements due to corporate or accounting irregularities, the SFC said the stock exchange should ensure that the company has fully addressed any internal control deficiencies and has put effective measures in place to comply with the listing rules.
A general view of the Hong Kong stock exchange. Photo: Jelly Tse
A general view of the Hong Kong stock exchange. Photo: Jelly Tse

Likewise, the SFC recommended that the exchange enhance its vetting of firms’ internal control reviews.

In the event of late auditor resignations, which hinder companies’ timely release of financial information, the SFC recommended that the exchange update its market guidance to reduce the frequency of such occurrences.

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