Hong Kong expands financial reporting oversight to licensed crypto firms

Hong Kong has widened regulatory coordination over financial reporting, audits and compliance to include licensed crypto firms. The Securities and Futures Commission and the Accounting and Financial Reporting Council said Monday they had signed a new memorandum of understanding covering SFC-licensed virtual asset service providers, licensed corporations, registered open-ended fund companies and authorized funds. The arrangement also covers related audit and assurance work and sets out a framework for information sharing, case referrals, mutual assistance, and coordinated inspections and investigations. It replaces an earlier 2021 agreement signed between the SFC and the former Financial Reporting Council, which became the AFRC in 2022. SFC Chair Kelvin Wong said the broader arrangement would give Hong Kong’s financial sector "more comprehensive oversight" across a wider range of entities and activities. The move comes as Hong Kong keeps building out its digital asset rulebook. In January, regulators laid out plans for new rules on crypto advisory services, and the SFC has also introduced frameworks covering virtual asset margin financing and perpetual contracts.