SFC Inspections & Audits

Overview

In our SFC Inspections and Audits practice, we routinely advise SFC licensed corporations, including stock brokerage firms, traders, hedge fund managers, investment banks, corporate finance sponsors and advisers, wealth managers, financial advisers and other intermediaries on how to deal with SFC inspections and audits under section 180 of the Securities and Futures Ordinance (“SFO”). Our SFC Inspections and Audits practice is part of our market leading Financial Services Regulatory Practice, which has been consistently recognized and recommended by independent editorial publications, including the International Financial Law Review 1000 (ILFR1000), the Legal 500, Chambers and Partners and Asialaw Profiles. Our lawyers in this area have been consistently and routinely recognized as “market-leading”, “leading”, “highly regarded” and “well regarded” lawyers.

Our work includes advising on the following:

• assisting clients in preparing for an SFC inspection, managing communications with the SFC and providing legal support immediately prior to, during and after an SFC inspection

• advising clients on the process of an SFC inspection and how to handle the SFC audit questionnaire, enquiries and requests, including requests for information and documents about specific transactions or clients

• helping clients to understand the regulatory concerns underlying specific SFC enquiries or requests for information, to manage the flow of information to be provided to the SFC to address any concerns before they become the subject of SFC’s criticism in the post-inspection report, and to pre-empt or mitigate any risk of SFC investigation or prosecution.

• working with clients to identify potential breaches of regulatory requirements and non-compliance with any expectations of the SFC, including those set out in the SFO and subsidiary legislation, the SFC’s codes, guidelines and circulars, including the Code of Conduct for Persons Licensed by or Registered with the SFC (“SFC Code of Conduct”), the Fund Manager Code of Conduct (“FMCC”), the Corporate Finance Adviser Code of Conduct (“CFA Code”), the Management, Supervision and Internal Control Guidelines (“Internal Control Guidelines”) and the Guideline on Anti-money Laundering and Counter-Financing of Terrorism (For Licensed Corporations) (“AML Guideline”)

• advising clients on current SFC enforcement trends and disciplinary action

• assisting clients in conducting mock SFC inspections, including conducting document reviews and mock on-site walk-throughs and advising on the preparation for an opening meeting

Our highly experienced regulatory lawyers offer a deep understanding of both market practices in the securities and futures markets and SFC regulatory expectations and combine that understanding with a sharp understanding of the boundaries of requirements under the SFO that comes with experience representing clients in numerous SFC investigations and prosecutions. As a result, we are able to identify and pre-empt concerns which the SFC may have before they become the subject of SFC criticism and where the SFC expresses concern, we are able to understand whether those concerns are well-founded and advise clients on how to make a case to resist a finding of breach or non-compliance.