The SFC will meet with key personnel and will inspect internal controls and risk management activities at selected licensed corporations.
Growing complexity of trading and business models and extensive use of technology have prompted the Hong Kong Securities and Futures Commission (SFC) to start a thematic review of selected licensed corporations. The aim is to assess their risk governance and oversight framework as well as their risk management practices.
The SFC notes that the growing complexity of trading and business models, extensive use of technology, greater reliance on big data and more challenging liquidity conditions all pose increasing risks to financial institutions in Hong Kong. The regulator insists that licensed entities have to evaluate the risk management processes periodically to ensure that they adequately manage the risk of losses, whether financial or otherwise, resulting from fraud, errors, omissions and other operational and compliance matters.
One area of increasing concern is the remote…
