| The Board has overall responsibility for ensuring the integrity of the Group’s accounting and financial reporting systems, and that appropriate systems of internal control and risk management are in place. |
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Financial reporting |
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The Board is committed to presenting a balanced, clear and comprehensible assessment of the Group’s performance, financial position and prospects to our shareholders and other stakeholders. This commitment encompasses all published information, including but not limited to the financial statements, regulatory announcements and other corporate communications. In addition, the Board is responsible for overseeing the preparation of the annual financial statements which give a true and fair view of the Group’s state of affairs, results and cash flows for the year. |
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The Board is regularly provided by the management with sufficient explanation and information on the Group’s financial and operational performance as well as the development of major initiatives, especially those under the annual operating plan. In addition, the management provides the Board with management accounts and updates on a monthly basis, with a view to giving a balanced and understandable assessment of the Group’s performance, financial position and prospects to enable the Board as a whole and each Director to discharge their duties. |
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The Board recognises that high quality, transparent and timely financial reporting is important to secure stakeholders’ confidence in the Group, and reviews and approves the annual, interim, and quarterly results for publication within 3 months, 2 months and 45 days respectively after the end of the relevant periods so as to keep our stakeholders abreast with the performance and latest development of HKEx. |
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Internal controls |
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The Board has the overall responsibility for maintaining sound and effective internal controls for the Group (including reviewing their effectiveness) to safeguard our shareholders’ investment and the Group’s assets. |
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The Board is responsible for approving and reviewing internal control policy, while the responsibilities for monitoring and assessing risks for individual business initiatives and providing oversight of risk management across the Group rest with the Senior Management Committee. |
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The management and individual Divisions/Departments are responsible for the day-to-day management of operational risks and implementation of mitigation measures. All Division/Department Heads are required to confirm annually that appropriate internal control policies and procedures have been established and properly complied with. |
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The Audit Committee has been delegated with certain activities to buttress the Board in discharging its responsibilities in relation to internal control. |
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| Internal audit |
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Internal Audit Department (IAD), with its function independent of the Group’s business operations and complementary to that of the external auditor, plays an important role in monitoring HKEx’s internal governance and provides objective assurance to the Board that a sound internal control system is maintained and operated by the management in compliance with agreed processes and standards. |
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IAD conducts quality assurance reviews of the quarterly, interim and annual financial reports so as to ensure that the information provided to our shareholders is accurate and reliable. Irregularities are reported to the Audit Committee for making recommendations to the Board for rectification. |
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| External audit |
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The function of external audit is to provide the Board and our shareholders an objective assurance on whether the financial statements fairly represent the financial position and performance of HKEx in all material aspects. |
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Risk management |
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Risk Management Division is responsible for supervising the risk management functions of HKEx and continues to identify and assess risks on different areas across the organisation. It is organised into 3 departments including Cash Clearing Risk Management Department, Derivatives Clearing Risk Management Department, and Enterprise Risk Management and Surveillance Department. |
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Cash Clearing Risk Management Department and Derivatives Clearing Risk Management Department, with their primay focus on daily operations on risk management activities, are responsible for the development and implementation of risk management strategies and measures to adequately and effectively mitigate counterparty risks of the cash and derivatives clearing houses of HKEx. |
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Enterprise Risk Management and Surveillance Department is responsible for (i) developing and implementing HKEx’s Enterprise Risk Management Framework to ensure that processes and initiatives are in place to manage risks at acceptable levels, (ii) monitoring Participants’ financial and operational capability and their compliance with trading/clearing house rules, (iii) coordinating the development of risk management policies and the HKEx Market Contingency Plan, and (iv) providing direct support to the Risk Management Committee, a statutory committee established under Section 65 of the SFO (Chapter 571 of the Laws of Hong Kong). | |