The Accounting and Financial Reporting Council (AFRC) and the Securities and Futures Commission (SFC) have announced the signing of a new memorandum of understanding (MoU) in Hong Kong.
The new MoU broadens their joint regulatory efforts beyond the existing remit of financial reporting and audit oversight for listed companies.
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Under the terms of the new MoU, the scope of cooperation now extends to financial and compliance reporting carried out by licensed corporations; virtual asset service providers licensed by the SFC; SFC-authorised funds; and registered open-ended fund companies.
The agreement also encompasses the audit and assurance functions performed by the auditors responsible for these entities.
AFRC CEO Janey Lai said: “Reliable financial reporting and auditing underpin market integrity and investor confidence.
“The enhanced cooperation and information sharing between the AFRC and the SFC will enable us to identify emerging risks earlier and carry out our statutory responsibilities to respond more effectively.”
Beyond widening the areas of oversight, the MoU sets out a structured framework through which the two bodies will share information, refer cases to one another, provide mutual assistance, and coordinate inspections and investigations where matters of shared regulatory concern arise.
SFC CEO Julia Leung said: “This MoU strengthens regulatory backing for our collaboration with the AFRC, ensuring our supervision evolves with market dynamics.
“Deepening our regulatory cooperation across financial sub-sectors is essential to upholding the quality of financial reporting and bolstering the confidence of global investors in Hong Kong’s regulatory system.”
The latest MoU replaces the arrangement previously in place between the SFC and the AFRC’s predecessor body, the Financial Reporting Council, which was signed in 2021.
The AFRC recently backed Hong Kong’s First Five-Year Plan and the 2026 Policy Address, which was announced by CEO John Lee.
