Hong Kong’s Securities and Futures Commission (SFC) and Accounting and Financial Reporting Council (AFRC) have signed a new memorandum of understanding (MoU).

The SFC AFRC MoU widens their cooperation, which previously centred on the financial reporting and audits of listed companies.

It now extends to licensed corporations and SFC-licensed virtual asset service providers (VASPs), as well as SFC-authorised funds and registered open-ended fund companies.

In each case, the agreement covers financial and compliance reporting, along with the audit and assurance work of their auditors.

Under the MoU, both regulators can share information and refer cases to each other.

They can also assist each other and coordinate inspections and investigations on matters of shared regulatory interest.

For the city’s virtual asset sector, this gives the two bodies a formal channel to coordinate on the reporting and audits of licensed crypto firms, including trading platforms.

“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,”

said Julia Leung, Chief Executive Officer of the SFC.

“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,”

said Janey Lai, Chief Executive Officer of the AFRC.

This agreement replaces a 2021 MoU between the SFC and the Financial Reporting Council, which became the AFRC in 2022.

Featured image: Edited by Fintech News Hong Kong, based on image by Securities and Futures Commission (SFC) via its website.