SFC and AFRC join forces to combat misconduct by listed issuers

The Securities and Futures Commission (SFC) and the Accounting and Financial Reporting Council (AFRC) have issued a joint statement aimed at enhancing their collaboration in the regulation of Hong Kong’s securities and futures markets. The statement highlights the growing number of cases where listed issuers channel company funds to third parties under the pretext of loans. The loans are often approved or granted without sufficient commercial rationale and appropriate documentation resulting in significant financial losses, while some cases are without adequate risk assessments, due diligence and internal controls. The joint statement sets out the standards and practices that listed issuers, their directors, audit committees, and auditors should adopt in relation to loans and similar arrangements. The SFC and AFRC are determined to work together to maintain the integrity of Hong Kong’s capital market and safeguard the interests of investors.

Joint statement:

https://www.sfc.hk/en/News-and-announcements/Policy-statements-and-announcements/Joint-statement-of-the-SFC-and-the-AFRC 

Resource:

https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=23PR77