Licensed crypto companies now under Hong Kong's enhanced financial oversight framework
A newly signed MoU between the SFC and AFRC brings virtual asset service providers holding licenses under expanded financial reporting, audit and compliance supervision frameworks.
Financial authorities in Hong Kong have broadened the scope of their collaborative oversight on financial reporting and audit procedures to encompass licensed cryptocurrency companies through a newly executed memorandum of understanding (MoU).
The Securities and Futures Commission (SFC) alongside the Accounting and Financial Reporting Council (AFRC) announced on Monday that this agreement broadens their joint regulatory framework to include financial and compliance reporting conducted by virtual asset service providers holding SFC licenses, licensed corporations, registered open-ended fund companies and authorized funds.
The SFC stated that the MoU encompasses associated audit and assurance activities and creates a structured framework designed to facilitate information sharing, case referrals, mutual assistance and coordinated inspections and investigations. This new agreement supersedes a previous MoU that was signed in 2021 by the SFC and the Financial Reporting Council, an entity that underwent rebranding to become the AFRC in 2022.
Kelvin Wong, the SFC Chair, stated that the broadened cooperation framework would deliver "more comprehensive oversight" spanning a wider spectrum of entities and activities operating within Hong Kong's financial sector.
This agreement arrives as Hong Kong maintains momentum in developing its digital asset regulatory framework. Regulators detailed plans in January for implementing new rules that would govern crypto advisory services, while the SFC has additionally rolled out frameworks addressing virtual asset margin financing and perpetual contracts.