To continuously promote market transparency and a culture of compliance, Hong Kong Exchanges and Clearing Limited (HKEX) has prepared a Compliance Newsletter to give the industry a better understanding of its enforcement work and regulatory expectations.

The Compliance Newsletter aims to remind all relevant Exchange Participants and Clearing Participants of several key points regarding the rules, including: (1) standard disciplinary actions under HKEX rules; (2) participants' responsibility to submit data to HKEX on time; (3) client protection measures; and (4) updates to the procedural guidance on minimum margin requirements formulated under Rule 617 of the rules, regulations and procedures of Hong Kong Futures Exchange Limited (HKFE) (the HKFE Rules).

Standard disciplinary actions under HKEX rules

Participants must at all times stay abreast of all relevant HKEX rules and regulations applicable to their companies. HKEX will handle any violations prudently and does not rule out considering disciplinary action against non-compliant participants, including but not limited to issuing written warnings, imposing fines and initiating disciplinary proceedings. HKEX hereby reminds all participants that certain violations under Exchange and Clearing House rules may be handled through summary fine offences, which are detailed one by one below.

Such violations handled through summary fine offences include failure to comply with: (i) investor eligibility requirements; (ii) certain submission requirements of the Hong Kong Investor Identifier Regime (HKIDR); (iii) clearing obligations to the Clearing House; and (iv) position limits determined by capital.

Participants' responsibility to submit data to HKEX on time

In connection with the annual programme for compliance assessments and on-site inspections, participants must complete and return the annual compliance assessment questionnaire (the Questionnaire) in the format specified by HKEX before the designated deadline each year. Participants must self-certify through the Questionnaire that they have complied with applicable rules and requirements during the specified review year. This requirement is one of the responsibilities participants must fulfil under Rule 569(3)(b) of the SEHK Rules, Rule 535 of the HKFE Rules, Rule 214A(a)(iv) of the Futures Clearing House Rules and Procedures, Rule 1703 of the Central Clearing and Settlement System General Rules and Rule 403F(4) of the Options Clearing Rules.

HKEX will deal seriously with any late, incomplete or inaccurate submission of data, records or documents required by HKEX (including submissions related to the Questionnaire). HKEX may take appropriate corrective action in accordance with the relevant rules and regulations, including disciplinary action where appropriate. HKEX hereby reminds all participants that they must comply with the above responsibilities and respond to the Exchange's requests in a timely and prudent manner.

Client protection measures

Further to the circular issued by HKEX in June 2025 (Reference No.: MSM/007/2025), all Exchange Participants are now reminded to implement and continuously maintain appropriate measures to prevent and properly handle incidents of unauthorized client transactions. Exchange Participants should also note the circular issued by HKFE in December 2025 regarding monitoring measures to avoid erroneous trades (Reference No.: MO/DT/265/25) and the circular issued by SEHK in March 2026 (Reference No.: CT/025/26) regarding requirements for accurate order input and trade cancellation/correction.

All Exchange Participants are hereby reminded that they should have and maintain adequate monitoring measures, procedures and contingency arrangements to ensure that, when necessary, erroneous trade reports, trade cancellation requests and trade amendment requests can be submitted and processed in accordance with applicable requirements. In addition, when submitting cash market trade cancellation/amendment requests or derivatives market erroneous trade reports, Exchange Participants must also comply with the relevant eligibility and procedural requirements. For the avoidance of doubt, it is the responsibility of the Exchange Participant (and not its client) to submit trade cancellation/amendment requests (cash market) or erroneous trade reports (derivatives market) to the relevant Exchange on time and to provide all necessary data and supporting documents.

Updates to the procedural guidance on minimum margin requirements formulated under Rule 617 of the HKFE Rules

Regarding the announced upcoming phased implementation of changes to client margin requirements, reference is hereby made to the updates issued by HKFE (Reference No.: MSM/009/2026) and the Futures Clearing House (Reference No.: MSM/010/2026) on September 21, 2026 concerning the Procedural Guidance on Minimum Margin Requirements Formulated under Rule 617 of the HKFE Rules (the Guidance).

The updated Guidance will supersede the previous version issued on October 31, 2024 (Reference No.: MSM/010/2024) and is intended to reflect the relevant existing requirements, guidance and market practices previously published by HKFE to the market. The updated Guidance should also be read together with other publications issued by HKFE from time to time. Participants should review the updated Guidance and take this opportunity to review their existing policy arrangements and implement appropriate internal controls and measures to ensure their continued compliance with the relevant rules and regulations.