SFC Guidance

Key dates

2025-10-22

The SFC issued its consultation paper on proposed amendments to the UT Code.

2026-10-07

The SFC published consultation conclusions announcing the enhancements to Hong Kong's retail fund regime.

2026-10-16

The revised UT Code was gazetted.

2026-11-01 Deadline

The revised UT Code takes effect. New funds must comply with the revised requirements immediately, and the 12-month transitional period for existing funds begins.

2027-10-31 Deadline

The 12-month transitional period ends. Existing funds generally must comply with the revised UT Code requirements by this date.

2027-11-01 Deadline

Existing funds continuing to be offered to the Hong Kong public must use KFSs containing the enhanced disclosure requirements after expiry of the transitional period.

Suggested considerations

• Compliance teams may wish to map each existing fund against the revised UT Code requirements and determine which requirements fall within the 12-month transitional period.
• Managers should consider documenting whether each fund will use the existing net derivative exposure approach or the new VaR approach, and assess the required models, data, governance, validation, stress testing, limits and reporting processes.
• Managers should consider reviewing fund asset liquidity, portfolio liquidity and redemption terms, including whether daily-dealing funds investing mainly in less liquid assets require anti-dilution liquidity management tools.
• Compliance teams may wish to inventory available liquidity management tools, assess their calibration and activation triggers, and verify that the fund documentation and operational procedures describe their use consistently.
• MMF managers should consider testing compliance with the revised minimum credit-quality standards and eligible-instrument and deposit requirements, including the additional safeguards applicable to constant-NAV MMFs.
• Fund boards, trustees and management companies may wish to review governance and escalation arrangements for derivatives exposure, liquidity risk and use of liquidity management tools.
• Managers should consider updating KFSs, offering documents, product classifications, liquidity disclosures and related marketing materials using the revised SFC templates.
• Applications for new funds submitted from 1 November 2026 should be prepared against the revised UT Code and updated application guides rather than the former requirements.

What changed

The revised UT Code introduces a Value-at-Risk approach alongside the existing net derivative exposure approach, with accompanying calculation methodology and standards. Funds complying with the applicable NDE or VaR limits will generally be treated as non-complex products, although the SFC retains discretion to classify products as complex based on their features and risks.

Key dates

2026-01-30

The SFC issued its earlier circular to licensed corporations carrying out sponsor work, addressing deficiencies in listing documents, sponsor conduct and resource management.

2026-09-30

The SFC’s comparison period ended: active applications exceeded 610, involving 64 sponsors and 325 signing principals; the SFC reported the September position in the October publication.

2026-10-13

The SFC published its update recognising progress in sponsors’ work and urging sustained vigilance against opaque IPO and post-IPO arrangements.

Suggested considerations

• Sponsors should consider reassessing current and proposed IPO mandates against available principals, deal-team expertise, supervision arrangements and the number of simultaneous active engagements; a principal supervising or participating in six or more active listing engagements is treated as strained under the SFC’s stated framework.
• Compliance teams may wish to enhance documented enquiries into applicant-provided subscription funding, prepayments, loans, investments, guarantees, rebates and other direct or indirect benefits involving investors or their connected parties before or after listing.
• Overall coordinators and CMIs should consider strengthening beneficial-owner and source-of-funds checks, including enquiries designed to identify concealed ultimate investors, connected parties, common funding sources and coordinated subscription activity.
• Firms should consider implementing escalation triggers for late-stage order surges, orders disproportionate to an investor’s financial profile, unusual concentration or cancellations, and order books that diverge from the agreed marketing or allocation strategy.
• Sponsors should consider ensuring that due-diligence records explain the substance of the applicant’s business, the commercial rationale for material fund flows and the basis for responses to SFC and HKEX questions, rather than relying on checklist completion or third-party representations alone.
• Relevant gatekeepers may wish to establish a documented process for promptly escalating unresolved red flags to senior management, the SFC and HKEX where appropriate, while preserving order, client, communications and allocation records.
• Firms should consider reviewing controls in light of independent market commentary describing the SFC’s 2026 approach as prioritising quality over deal volume, substantive gatekeeping and suspected misuse or diversion of offering proceeds, rather than treating the announcement as a statistical progress report.

What changed

This is supervisory guidance rather than a new rule or stated deadline. The SFC reiterated that sponsors, overall coordinators and capital market intermediaries should maintain adequate resources, effective management oversight and high-quality substantive due diligence, while escalating concerns to the SFC and the Stock Exchange of Hong Kong where appropriate.

Key dates

2019-09-01

The HKEX suspension framework applies to annual results announcements for financial years commencing on or after this date; the framework generally covers disclaimer or adverse audit opinions but excludes cases relating solely to going concern, subject to disclosure requirements.

2026-10-08

The SFC, AFRC and HKEX joint statement was issued and the regulators publicly signalled enhanced monitoring and possible future Listing Rule amendments.

Suggested considerations

• Compliance teams at listed issuers should consider inventorying current and prospective going-concern uncertainties, disclaimer risks and the status of related remediation plans before the next annual reporting cycle.
• Management may wish to strengthen cash-flow forecasts, liquidity analyses, financing assumptions, covenant assessments and downside scenarios, ensuring that key inputs are supported by reliable evidence and that proposed mitigating actions are realistically executable.
• Audit committees should consider documenting robust challenge of management’s assumptions, including the feasibility, timing and funding of proposed actions, and monitoring delivery against approved milestones.
• Issuers may wish to review annual results and financial-reporting disclosures to ensure that the circumstances giving rise to any audit modification, management’s actions and remaining uncertainties are explained clearly and consistently.
• Auditors and issuer compliance functions should consider escalating deficiencies in going-concern evidence or action plans promptly to management, the audit committee and relevant governance bodies.
• Listed issuers with existing going-concern-only disclaimers should consider preparing for increased engagement with HKEX and the possibility of a future Listing Rule amendment requiring suspension; no immediate suspension deadline was created by this statement.
• Compliance teams should monitor subsequent SFC, AFRC and HKEX communications, enforcement outcomes and any consultation or rule amendment concerning suspension of issuers with going-concern-only disclaimers.

What changed

The regulators set out coordinated expectations rather than new binding rules. Issuer management should support going-concern assessments with reasonable assumptions, reliable data and feasible action plans; audit committees should challenge those assessments and oversee remedial actions; and auditors should critically evaluate the assessments, communicate deficiencies and explain clearly the basis of any disclaimer. The regulators will monitor conduct and may take regulatory, disciplinary or enforcement action for misconduct or non-compliance.

Key dates

06 May 2026

- A commencement notice to bring the USM-related legislation into effect was tabled before the Legislative Council for negative vetting

16 November 2026 Deadline

- The USM regime is targeted for launch, and issuers must be operationally ready for uncertificated securities market participation

16 November 2027 Deadline

- Deadline by which issuers must complete amendments to their terms of issue, unless their first annual general meeting after USM launch occurs later

Suggested considerations

• Issuers must review their articles of association, bylaws, and terms of issue immediately to identify provisions that conflict with uncertificated issuance, electronic transfer, or register-based title evidence.
• Issuers must begin the constitutional amendment process now so shareholder approvals, board resolutions, and any jurisdiction-specific filings can be completed before the applicable deadline.
• Issuers must confirm their ability to appoint and maintain an approved securities registrar at all times once USM is implemented.
• Issuers must assess their registrar, transfer, and corporate action workflows to ensure they can operate in a paperless environment from launch.
• Issuers must coordinate with legal advisers and share registrars to map the transition timetable and identify any issues that could delay implementation.

What changed

• - The USM regime is targeted to launch on 16 November 2026, and issuers must prepare for securities to be held and transferred without paper certificates from that point onward.
• Issuers will need to review and amend their terms of issue, including articles of association or equivalent constitutional documents, so they are consistent with USM requirements.
• The SFC’s guidance provides key areas of focus and sample provisions to help issuers amend their constitutional documents for paperless securities issuance and transfer.
• Issuers will need to complete amendments by 16 November 2027 or by the date of their first annual general meeting after USM launch, whichever is later.
• Upon implementation of USM, issuers must have an approved securities registrar at all times.