Hong Kong securities watchdog urges stock exchange to tighten listing, compliance rules

2026.03.18 15:20 The Securities and Futures Commission has made a series of recommendations to improve the stock exchange’s oversight of companies. Photo: Shutterstock Hong Kong’s securities regulator on Wednesday recommended strengthening the stock exchange’s regulations to better protect investors following a review of 2024 compliance and enforcement cases. The Securities and Futures Commission (SFC) submitted its findings after vetting listed companies’ internal control reviews, their handling of late auditor resignations and the processes of the Hong Kong stock exchange’s listing division. The regulator noted that while thestock exchange “had taken steps to respond to the recommendations made in the previous report published in late 2024”, the latest report “made further recommendations in several areas for improvement identified in this year’s topics”. For example, when an issuer fails to publish financial statements due to corporate or accounting irregularities, the SFC said the stock exchange should ensure that the company has fully addressed any internal control deficiencies and has put effective measures in place to comply with the listing rules. A general view of the Hong Kong stock exchange. Photo: Jelly Tse Likewise, the SFC recommended that the exchange enhance its vetting of firms’ internal control reviews. In the event of late auditor resignations, which hinder companies’ timely release of financial information, the SFC recommended that the exchange update its market guidance to reduce the frequency of such occurrences. It also said that companies should seek shareholders’ approval when they ask their auditors to resign and seek clarity on audit fees to prevent late resignations stemming from fee disagreements. In 2024, the SFC found that 40 companies with long suspensions were able to satisfy the resumption conditions and resume trading, whereas 32 failed to meet the criteria and were delisted. It also found that the most common reasons for trading s

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