From 23 September 2024, Hong Kong’s securities and derivatives markets will remain open during severe weather conditions (where a typhoon signal No. 8 or above or a black rainstorm warning is issued by the Hong Kong Observatory). The Securities and Futures Commission of Hong Kong (SFC) published a Circular on 18 June 2024 setting out the standards of conduct and internal controls the SFC expects of intermediaries who provide dealing, clearing and settlement services covering the Hong Kong securities and derivatives market on a severe weather trading (SWT) day (SWT Day).

In particular, intermediaries should refer to the expected standards for implementing SWT set out in the Annex to the Circular and make appropriate arrangements to ensure normal operations during SWT, including:

  • adequate preparations and appropriate measures for conducting business activities on a SWT Day, such as putting in place remote operations and electronic fund transfers;
  • communicating SWT policies and implementing appropriate arrangements with clients clearly and in advance (including changes to client agreements);
  • encouraging clients to transfer funds electronically;
  • developing robust arrangements allowing timely and reliable access to funding, exercising prudent risk management to ensure financial resilience and protecting client assets by maintaining effective controls; and
  • notifying the SFC promptly of any incidents which may materially affect clients’ interests or intermediaries’ ability to maintain business operations on a SWT Day.  

Intermediaries should establish their own procedures commensurate to their business size and complexity and senior management should put in place proper governance and oversight mechanisms so that the procedures established are properly designed and implemented.