Hong Kong regulators expand financial reporting oversight to licensed crypto firms
Hong Kong’s Securities and Futures Commission (SFC) and the Accounting and Financial Reporting Council (AFRC) have signed a memorandum of understanding that extends financial reporting, audit and compliance cooperation to SFC-licensed virtual asset service providers and other regulated entities. The agreement sets out information-sharing, case referral and coordinated inspection mechanisms and replaces a 2021 MoU with the Financial Reporting Council.
Why It Matters
By bringing licensed crypto firms into the AFRC–SFC cooperation framework, regulators aim to strengthen oversight of financial and compliance reporting across a wider set of entities as Hong Kong builds out its digital asset regulatory regime. This change aligns with recent regulatory moves on crypto advisory services and margin and perpetual contract frameworks.
Key Facts
- MoU signatories: Securities and Futures Commission (SFC) and Accounting and Financial Reporting Council (AFRC)
- Scope expanded to include: SFC-licensed virtual asset service providers, licensed corporations, registered open-ended fund companies and authorized funds
- Areas covered: Financial and compliance reporting, related audit and assurance work, information sharing, case referrals, mutual assistance, coordinated inspections and investigations
- Replaces: 2021 MoU between the SFC and the Financial Reporting Council (renamed AFRC in 2022)
- SFC leadership comment: SFC Chair Kelvin Wong said the expanded cooperation would provide 'more comprehensive oversight' across a broader range of entities and activities
Hong Kong regulators have broadened their cooperative oversight of financial reporting and audits to include licensed crypto firms under a new memorandum of understanding. The SFC and the AFRC announced that the agreement extends their regulatory collaboration to SFC-licensed virtual asset service providers, alongside licensed corporations, registered open-ended fund companies and authorized funds.
The MoU covers not only financial and compliance reporting but also related audit and assurance activities. It establishes mechanisms for information sharing, case referrals, mutual assistance and coordinated inspections and investigations between the two bodies.
This new agreement replaces a 2021 memorandum that the SFC signed with the Financial Reporting Council; that body was renamed the AFRC in 2022. SFC Chair Kelvin Wong said the enhanced cooperation is intended to deliver more comprehensive oversight across a broader set of entities and activities in Hong Kong’s financial sector.
The move comes amid a broader effort by Hong Kong authorities to expand their digital asset regulatory framework. Earlier in January, regulators set out plans for new rules addressing crypto advisory services, and the SFC has introduced frameworks related to virtual asset margin financing and perpetual contracts.
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