Introduction
The Hong Kong Exchanges and Clearing Limited (HKEX) Rule Enforcement Framework consists of three elements: (i) prevention, (ii) detection and (iii) correction. Details of these elements are set out below.
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PREVENTION
In a bid to prevent and deter participants from non-compliance with the relevant rules and regulations, HKEX will continue its effort in market communication and education in order to enhance the participants’ understanding of the relevant rules and regulations including conducting briefing sessions and issuing FAQs and circulars.
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DETECTION
In addition to its market surveillance and monitoring work and self-reporting of non-compliance by participants, HKEX has introduced an Annual Attestation and Inspection Programme since 2017 as follows:
1. Self-Attestation of Compliance
Each participant will be required, on an annual basis, to complete and return a questionnaire in the form prescribed by HKEX, in which the participant is required to attest its compliance with the relevant rules and regulations (or a specific section thereof) during the relevant period. The participant’s response to the questionnaire as well as its compliance history will, among other factors, form the basis of HKEX's assessment of the participant’s risk profile. HKEX may conduct follow-up enquiries with participants based on their risk profiles and may conduct investigations or on-site inspections at the participants’ premises.
2. On-site Inspection
HKEX will conduct risk-based on-site inspections at selected participants’ premises in relation to one or more priority areas as it may determine from time-to-time in consultation with the SFC. HKEX will take into consideration the overall levels of activity of participants in the priority areas in determining the participants that will be subject to on-site inspections. The participants subject to on-site inspections will be evaluated on their compliance with the relevant rules and regulations and HKEX may conduct further investigations based on such evaluation.
The compliance bulletin provides useful guidance to market participants on HKEX rules and regulations through highlighting recent updates, compliance issues and good practices adopted by the industry, as well as outlining HKEX expectation that may assist market participants to achieve compliance.
Compliance Reminders from Annual Attestation and Inspection Programme
The compliance reminders and presentation materials from the information sessions set out the rule requirements and key findings in the selected priority areas of the Annual Attestation and Inspection programme.
Electronic Submission of Questionnaires
Participants are required to submit the completed questionnaires via the ECP. For submission requirements and details, please refer to the instructions section of the questionnaire and the ECP User Guide.
For enquiries, please contact Market Surveillance and Monitoring at surveillance@hkex.com.hk