On Monday, the Hong Kong Securities and Futures Commission (SFC) and the Accounting and Financial Reporting Council (AFRC) signed a new memorandum of understanding (MoU), expanding cooperation on financial and compliance reporting to include SFC-licensed virtual asset providers, as well as licensed corporations, registered open-ended investment companies, and authorized funds.

The agreement covers audit, data sharing, and joint inspections

According to the SFC, the MoU includes audit and assurance-related work, and establishes a framework for information sharing, case referrals, mutual assistance, and coordinated inspections and investigations. The document replaces the 2021 memorandum signed by the SFC and the Financial Reporting Council, which was renamed AFRC in 2022.

Regulators aim for more comprehensive oversight

SFC Chairman Kelvin Wong stated that the expanded cooperation will provide more comprehensive oversight of a broad range of organizations and activities in Hong Kong's financial sector.

Expanding the framework for digital assets

The agreement follows steps by authorities to develop digital asset regulation in Hong Kong: in January, plans were outlined for new rules on crypto asset advisory services, and the SFC also introduced frameworks for margin financing and perpetual contracts for virtual assets.