Hong Kong Ordinances

SECURITIES AND FUTURES ORDINANCE - SECT 5

Functions and powers of Commission

(1) The functions of the Commission are, so far as reasonably practicable-

   (a)  to take such steps as it considers appropriate to maintain and promote
        the fairness, efficiency, competitiveness, transparency and
        orderliness of the securities and futures industry;

   (b)  to supervise, monitor and regulate-

        (i)    the activities carried on by recognized exchange companies,
               recognized clearing houses, recognized exchange controllers or
               recognized investor compensation companies, or by persons
               carrying on activities regulated by the Commission under any of
               the relevant provisions, other than registered institutions;
               and

        (ii)   such of the activities carried on by registered institutions as
               are required to be regulated by the Commission under any of the
               relevant provisions;

   (c)  to promote and develop an appropriate degree of self-regulation in the
        securities and futures industry;

   (d)  to promote, encourage and enforce the proper conduct, competence and
        integrity of persons carrying on activities regulated by the
        Commission under any of the relevant provisions in the conduct of such
        activities;

   (e)  to encourage the provision of sound, balanced and informed advice
        regarding transactions or activities related to financial products;

   (f)  to take such steps as it considers appropriate to ensure that the
        relevant provisions are complied with;

   (g)  to maintain and promote confidence in the securities and futures
        industry in such manner as it considers appropriate, including by the
        exercise of its discretion to disclose to the public any matter
        relating or incidental to the performance of any of its functions;

   (h)  to co-operate with and provide assistance to regulatory authorities or
        organizations, whether formed or established in Hong Kong or
        elsewhere;

   (i)  to promote understanding by the public of the securities and futures
        industry and of the benefits, risks and liabilities associated with
        investing in financial products;

   (j)  to encourage the public to appreciate the relative benefits of
        investing in financial products through persons carrying on activities
        regulated by the Commission under any of the relevant provisions;

   (k)  to promote understanding by the public of the importance of making
        informed decisions regarding transactions or activities related to
        financial products and of taking responsibility therefor;

   (l)  to secure an appropriate degree of protection for members of the
        public investing in or holding financial products, having regard to
        their degree of understanding and expertise in respect of investing in
        or holding financial products;

   (m)  to promote, encourage and enforce-

        (i)    the adoption of appropriate internal controls and risk
               management systems by persons carrying on activities regulated
               by the Commission under any of the relevant provisions, other
               than registered institutions; and

        (ii)   the adoption of appropriate internal controls and risk
               management systems by registered institutions in the conduct of
               activities regulated by the Commission under any of the
               relevant provisions;

   (n)  to suppress illegal, dishonourable and improper practices in the
        securities and futures industry;

   (o)  to take appropriate steps in relation to the securities and futures
        industry further to any requirement of the Financial Secretary for the
        purpose of providing assistance in maintaining the financial stability
        of Hong Kong;

   (p)  to recommend reforms of the law relating to the securities and futures
        industry;

   (q)  to advise the Financial Secretary on matters relating to the
        securities and futures industry and provide him with such information
        in relation thereto as it considers appropriate; and

   (r)  to perform functions conferred or imposed on it by or under this or
        any other Ordinance.

(2) Subsection (1)(c) does not limit or otherwise affect any other function of
the Commission.

(3) The Commission, in performing any of its functions in relation to-

   (a)  any authorized financial institution as a registered institution or as
        an associated entity of an intermediary; or

   (b)  any person as an associated entity of an authorized financial
        institution that is a registered institution, may rely, in whole or in
        part, on the supervision of such authorized financial institution or
        person (as the case may be) by the Monetary Authority.

(4) For the purposes of this Ordinance, the Commission may-

   (a)  acquire, hold and dispose of property of any description;

   (b)  make contracts or other agreements;

   (c)  receive and expend moneys;

   (d)  with the approval of the Financial Secretary, borrow money on security
        or other conditions;

   (e)  publish or otherwise make available materials (however described)
        indicating to persons who are, or who carry on activities, regulated
        by the Commission under any of the relevant provisions and, where the
        Commission considers appropriate, to any other persons the manner in
        which, in the absence of any particular consideration or circumstance,
        the Commission proposes to perform any of its functions; and

   (f)  publish or otherwise make available materials (however described)
        indicating to the public any matter relating or incidental to the
        performance of any of the functions of the Commission.

(5) Materials published or otherwise made available under subsection (4)(e) or
(f) are not subsidiary legislation.