ComplianceOne Newsletter – April 2026
The topics discussed in this monthly newsletter are as follows:
Regulatory Updates
Market News
SFC joins global regulatory effort again to combat unlawful activities of finfluencers
New speech by Kelvin Wong: Keynote speech at Deloitte's Hong Kong CFO Forum
Enforcement News - Intermediaries
Enforcement News - Listed Companies
Regulatory Updates
1. SFC unveils new regulatory framework to allow secondary trading of tokenized SFC-authorized investment products
On 20 April 2026, the SFC has introduced a new regulatory framework to pilot secondary trading of tokenized SFC-authorized investment products. The SFC will primarily facilitate secondary trading of tokenized open-ended funds on licensed virtual asset trading platforms (“VATPs”), expanding access for retail investors.
In a keynote speech by Ms LEUNG, she mentioned “Our new framework marks another major milestone on Hong Kong’s journey to build out a fully integrated, innovative and scalable digital asset ecosystem with robust investor safeguards. This initiative allows a traditional securities product, once tokenized, to be traded in the evening and on weekends, and supported by the use of regulated stablecoins and tokenized deposits to facilitate round-the-clock liquidity, satisfying demand of investors reacting to an increasingly fast-moving and uncertain market environment.”
Below highlights the requirements for secondary trading of tokenized SFC-authorized investment products in Hong Kong.
Category | Key Requirements |
Scope and Objective | The circular sets out requirements for allowing public secondary trading of tokenized SFC-authorized investment products in Hong Kong. Its goals are to enhance product tradability and integrate them in the Web3.0 ecosystem. The initial focus is on SFC-authorized open-ended funds. |
Permitted Trading Channel | Secondary trading for retail investors is to be conducted via on-platform trading provided by SFC-licensed VATPs operators. The trading must follow existing VATP guidelines for virtual asset trading. |
Fair Pricing Controls | SFC-licensed VATPs must implement controls to ensure fair pricing, including:
|
Liquidity Provision |
|
Investor Disclosure | Offering documents and trading platforms must clearly disclose:
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Client Onboarding | SFC-licensed VATPs and Connecting Brokers must prominently highlight the associated risks to clients and obtain client confirmation that they understand these risks before onboarding them for secondary trading. |
Notification Obligations |
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*For more details, please refer to the circular on secondary trading of tokenized SFC-authorized investment products.
SIGNIFICANCE:
The new regulatory framework introduces new pathways to operate but also imposes specific investor protection and operational obligations to those that choose to engage in the business of secondary trading for tokenized SFC-authorized investment products.
Market News
2. Granting of stablecoin issuer licenses
On 10 April 2026, the HKMA has granted stablecoin issuer licensed to Anchorpoint Financial Limited (a joint venture established by Standard Chartered Bank (Hong Kong) Limited (“SCBHK”), HKT and Animoca Brands) and The Hong Kong and Shanghai Banking Corporation Limited for issuing stable coins in Hong Kong.
In a keynote speech by Mr Eddie YUE, Chief Executive of the HKMA, “The granting of stablecoin issuer licenses is an important milestone for the development of digital assets in Hong Kong. The regulatory regime provides an orderly operating environment for stablecoin issuers to apply innovative technologies while ensuring robust user protection and effective risk management, which will foster the development of a healthy, responsible, and sustain#86C6E5able stablecoin ecosystem. We look forward to the issuers launching business according to their plans, exploring growth opportunities while properly managing risks. We hope their promotion of regulated stablecoins will address pains points in financial and economic activities, create values for both individuals and businesses, and support the healthy development of digital assets in Hong Kong”.
*Please refer to the List of Stablecoin Issuers granted with license under section 15(1) of the Stablecoins Ordinance to issue specified stablecoins in Hong Kong.
SIGNIFICANCE:
The licensing of Anchorpoint Financial Limited and The Hong Kong and Shanghai Banking Corporation Limited is not merely news for payment sector; it is a fundamental infrastructure upgrade for Hong Kong’s digital asset market. For SFC-licensed corporations, it provides a credible, regulated bridge between traditional finance and virtual assets. Early engagement and strategic planning around these new assets are strongly advised to capture first-mover advantages, enhance risk profiles, and ensure full regulatory alignment.
3.SFC joins global regulatory effort again to combat unlawful activities of finfluencers
On 20 April 2026, the SFC participated in “Global Week of Action Against Unlawful Finfluencers” (“Global Week”), a coordinated initiative organised under the support of the International Organization of Securities Commissions (“IOSCO”). This year’s Global Week saw participation almost double compared to its inaugural edition in 2025, with a total of 17 IOSCO member jurisdictions joining the initiative. The initiative is designed to disrupt unlawful finfluencer activities through a combination of enforcement actions, supervisory measures, investor education and consumer awareness programs.
Finfluencer Definition and Risk Profile
Finfluencers are social media influencers who use platforms such as Instagram, YouTube and TikTok to promote financial products, share investment insights and offer various forms of financial advice. A growing subset of influencers are engaged in soliciting financial products or services illegally and without regulatory authorisation, typically using the portrayal of a lavish lifestyle, often falsely depicted, to market investment products to young and retail investors. These individuals may not be licensed by the SFC to provide securities or futures advice in Hong Kong.
SFC’s Enforcement Actions in the Past Year
Issued a compliance advice letter to a finfluencer in connection with the unlicensed promotion of overseas virtual asset trading platforms to the Hong Kong public
Submitted 12 reports concerning 33 suspicious posts or accounts to major social media platforms since July 2025, with over 90% of reported posts or accounts promptly removed by the respective platforms;
Deployed SENSOR, the SFC’s in-house artificial intelligence-powered social media monitoring system (launched in Q3 2025), which leverages AI and natural language processing to scan social media platforms for unlawful financial promotions and other red flags; and
Conducted coordinated outreach with the Hong Kong Monetary Authority (“HKMA”) and the Chinese Banking Association of Hong Kong, including a fraud prevention and investment education session for Mainland-based university students in Hong Kong in March 2026 and anti-scam awareness activities at a Consumer Council event for senior citizens.
SIGNIFICANCE:
The Global Week, now in its second year and nearly double in jurisdictional participation, signals that finfluencer regulation is firmly embedded on the global regulatory agenda. For licensed corporations operating in Hong Kong, the SFC’s expanding enforcement toolbox, including AI-powered monitoring, platform takedown requests, compliance advice letters and investor education, creates a heightened compliance environment with direct operational implications.
4. New speech by Kelvin Wong: Keynote speech at Deloitte's Hong Kong CFO Forum
On 24 April 2026, Dr Kelvin WONG, the Chairman of the SFC, delivered a speech at Deloitte’s Hong Kong CFO Forum.
The speech highlights the following:
Governance as a Performance Driver | The speech argues that governance must evolve from a box-ticking compliance exercise into a strategic framework that drives corporate performance, accountability, and trust. It is an economic necessity that improves decision-making, lowers risk, and creates long-term value, rather than being merely a regulatory cost. |
The Central Role of Culture | Governance failures are often rooted in human weakness. Therefore, a strong ethical culture is identified as the primary safeguard and a “hard control”. The critical test for an organization’s culture is whether it is genuinely safe for employees to raise concerns. |
Concentrated Ownership | As of March 2026, 40% of Hong Kong’s listed companies have a single shareholder with absolute control. This structure heightens risks like information asymmetry and potential minority shareholder abuse, making robust, targeted regulation essential. |
Audit Quality and Enhanced Accountability | The speech underscores Section 277 of the SFO, which holds all parties involved in financial disclosures accountable, including auditors, for disseminating false or misleading information. Auditors must ensure their work papers fully support their conclusions. |
Enforcement as a Wake-up Call | The recent enforcement actions by the SFC and Accounting and Financial Reporting Council for serious audit failures are noted. This served as a constructive wake-up call to strengthen independence, scepticism, and quality controls. |
ICAC’s Integrity Compliance Management System (“ICMS”) | The HKEX has integrated the ICMS into its corporate governance guide. Phase 2, launching in 2026, will provide a practical playbook and digital tools to help embed integrity systems beyond paper compliance. |
Shared Stewardship | The conclusion reaffirms that Hong Kong’s future as an International Financial Centre depends on the quality of leadership, the strength of culture, and the courage of professionals to do the right thing. Integrity is a shared mission where every line of defence must uphold its responsibility. |
*For more details, please refer to Dr Kelvin WONG speech
SIGNIFICANCE:
The SFC is explicitly stating that it cannot police the market alone. It calls on licensed corporations, as key intermediaries and gatekeepers, to act as co-stewards of market quality. The speech sets the expectation that licensed corporations must exercise heightened judgement, courage, and professional scepticism to uphold Hong Kong’s reputation as an International Financial Centre, positioning their role as both a commercial and public trust.
Enforcement News - Intermediaries
5. SFC sanctions Impression Investment Limited and its former responsible officer over staff trading activities
On 09 April 2026, the SFC announced disciplinary sanctions against Impression Investment Limited, a Type 9 licensed corporation, and Mr Liu Shan, a former director, Responsible Officer (“RO”) and Manager-in-Charge (“MIC”) of the firm. Impression was publicly reprimanded and fined HK$2 million. Liu was prohibited from re-entering the securities and futures industry for eight months, from 2 April to 1 December 2026.
SFC Findings
Between January 2016 and March 2021, Liu and another staff member engaged in personal securities trading in a manner contrary to regulatory requirements, whilst simultaneously responsible for making investment decisions for funds managed by Impression, the specific failures identified were the following:
• Over 2,500 personal transactions executed without pre-clearance approval
• Same-day personal trading in the same securities as funds under management, in some instances at more favourable prices than those obtained for investors
• Absence of post-trade monitoring of staff personal trading during the relevant period
The SFC concluded that Impression’s failures were directly attributable to Liu’s neglect in discharging his duties as RO and member of senior management.
SIGNIFICANCE:
This case serves as a timely reminder that staff trading controls remain a high priority of SFC supervisory focus. The misconduct persisted for more than five years without detection, reflecting serious governance failures and resulting in both corporate and individual sanctions.
6. SFC reaches agreement with PricewaterhouseCoopers for shareholder compensation of HK$1 billion regarding false financial statements of China Evergrande Group for 2019 and 2020
On 23 April 2026, the SFC announced an agreement with PricewaterhouseCoopers Hong Kong limited (“PwC HK”) requiring the firm to pay HK$1 billion into a dedicated compensation fund for eligible independent minority shareholders of China Evergrande Group (“Evergrande”).
In a concurrent action, the Accounting and Financial Reporting Council (“AFRC”) imposed a HK$300 million fine and a six-month practice restriction on PwC HK – prohibiting the firm from accepting or performing audit engagements for new listed clients during that period. The AFRC additionally issued public reprimands and fined two PwC partners HK$10 million each. The combined sanctions across both regulators total HK$1.3 billion. For more details, please refer to AFRC – Press Releases on 23 April 2026.
The SFC’s investigation concluded that Evergrande’s audited annual reports for financial years 2019 and 2020 contained materially false or misleading financial information. Revenue was artificially inflated by prematurely recognizing income from property sales before the completion and delivery of the relevant properties to buyers.
SUMMARY OF MISSTATEMENT
Financial Year | Revenue Overstatement | Reported Profit | Actual Result |
FY2019 | RMB 213.9 billion (overstated 44.79%) | RMB 33.5 billion | RMB 7.12 billion loss |
FY2020 | RMB 350.2 billion (overstated 69.03%) | RMB 31.4 billion | RMB 19.9 billion loss |
Whilst not admitted by PwC HK, the SFC considers that PwC HK, as auditor of Evergrande:
· was involved in disclosing false or misleading information;
· failed to maintain auditor independence in the FY2019 and FY2020 audits;
· failed to apply adequate professional scepticism in planning, procedures, and handling irregularities;
· did not design and perform effective site inspections to verify property completion and revenue recognition;
· acquiesced to Evergande management’s manipulation of audit samples and site inspections, concealing premature revenue recognition; and
· failed to verify the authenticity of supporting documents and records
Ms Julia LEUNG stated that this marks the first time that auditors of a defunct company have been required to provide compensation to independent minority shareholders harmed by false and misleading financial statements, and that outcome sends an unequivocal message of accountability to the audit profession and investing public alike.
SIGNIFICANCE:
The Evergrande/PwC HK enforcement outcome is one of the most consequential in the SFC’s history, establishing a new precedent for auditor’s accountability and investor compensation in the context of market misconduct. Its implications extend well beyond the accounting profession.
Enforcement News - Listed Companies
7. SFC commences legal proceedings against former senior executives of China Automotive Interior Decoration Holdings Limited and its subsidiary
On 29 April 2026, the SFC has file legal proceedings in the Court of First Instance against two former executives of China Automotive Interior Decoration Holdings Ltd. (“China Automotive”) (stock code: 00048) and its subsidiary Giant Faith Holdings Ltd. The case centres on alleged misappropriation of funds disguised as trade payments. Between December 2019 and January 2020, WONG Ho Yin, former director of China Automotive and its subsidiary, allegedly signed cheques for three payments totalling HKD 14.6 million. These were recorded as payments to a Mainland company for purchasing food products. However, the SFC alleges these were fictitious transactions causing loss to the listed company.
The proceedings were commenced under Section 214 of the Securities and Futures Ordinance. If the court rules in the SFC’s favour, the defendants could face disqualification from corporate management for up to 15 years, in addition to the financial restitution sought.
SIGNIFICANCE:
While this case directly targets a listed company’s directors, it serves as a critical warning signal for all SFC-licensed corporations. The enforcement action underscores that the regulator views fictitious transactions and misappropriation as severe breach of the fit and proper test, with direct implications of a firm’s internal controls and senior management accountability.
[End of ComplianceOne Newsletter – April 2026]
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