On Jan. 19, 2017, the SEC announced that it had established a comprehensive arrangement with the Hong Kong Securities and Futures Commission to enhance the oversight of regulated entities that operate across national borders. This new cooperation arrangement will expand efforts with regard to information sharing between the two regulators. The new arrangement expands upon a 1995 arrangement that only pertained to investment management activities. In addition to investment management activities, the new arrangement will expand cooperation with regard to investment advisors, broker-dealers, securities exchanges, market infrastructure providers, and credit rating agencies.
The two regulators agreed to meet regularly and discuss areas of mutual supervisory interest. The SEC release also noted that enforcement cooperation helps establish mechanisms for ongoing consultation and the exchange of information regarding the oversight of global firms and markets. The SEC stated that such information may include routine supervisory information as well as information regulators need to monitor risk concentrations, identify emerging risks, and better understand globally active regulated entity’s compliance culture. Additionally, these types of arrangements facilitate the SEC and its foreign counterparts to conduct on-site examinations of registered entities located outside the U.S.