On 19 August, the Securities and Futures Commission (SFC) and the Independent Commission Against Corruption (ICAC) entered into a Memorandum of Understanding (MoU) outlining a high-level framework for cooperation to combat corruption, crimes and illicit activities relating to Hong Kong’s securities and futures industry. It represents the continuation of a recent trend of increased cooperation between agencies (both domestic and foreign) to combat financial crime, and the streamlining of case management at the SFC.

The MoU covers four main areas:

1. Allocation/referral of cases

The agencies have committed to actively consider whether cases that come before one of them would be better handled by the other because of resources, expertise or powers.

This already happens to a large extent in practice but a written commitment on the core principles will assist in ensuring consistent application of those principles.

2. Joint investigation

There can be a significant degree of overlap in the subject matter of certain types of case handled by the SFC and the ICAC. In recognition of this, both bodies have committed to actively consider whether a joint investigation would be appropriate and beneficial where a case falls within both their remits. Where they decide to conduct a joint or parallel investigation, they will also consider whether to consult the Department of Justice early and seek its views on management of the investigation(s).

The intention appears to be that an assessment will be made at the outset, i.e. at the point at which the two bodies consider allocation/referral. Although not expressly addressed in the MoU, the bodies may also keep allocation decisions under review such that, as a case evolves, a decision could be made at a later date to involve the other agency and transition a unilateral (or parallel) investigation into a joint investigation.

For those who face a joint or parallel investigation, questions about investigative powers, scope and approach will typically arise. 

  • How will both regulators look to exercise their powers?  
  • When might they look to exercise their powers, and will they do so in parallel? 
  • How much will the scope of an investigation be widened if both agencies are or become involved, and how does that impact on risk? 
  • How will the investigation be conducted in practice going forward – will both agencies cover all aspects of the case, or will distinct issues/offences be divided between them? 
  • How will the investigative timeline be affected? 
  • How long might an investigation take, and what might happen after the investigation concludes?

3. Information sharing

Fundamental to the effectiveness of the MoU is a commitment to share information. It is wide reaching in scope, extending to any information which is “conducive to the objectives of [the] MoU and which may assist the other party in discharging its Functions”.

Any subject of an investigation by one or both of the agencies, regardless of whether the investigation is conducted jointly, in parallel or separately, must be alive to the likelihood of documents, interview notes, information and views being shared between the SFC and ICAC. The MoU states that, when sharing information, the parties will comply with the Personal Data (Privacy) Ordinance and take steps to maintain confidentiality, but it silent about legally privileged material.

If any legally privileged information is shared with a regulatory or law enforcement body, it will be prudent to ensure that it is shared under a limited waiver of privilege in favour of that body only and for the specific purpose of the investigation or matter in question, and is not a waiver against others or for other purposes.  

4. Regular communication

The SFC and the ICAC have committed to meet at least every six months, or more regularly if necessary. On the agenda will be cases of mutual interest, as well as proposed legislative or policy changes relevant to their investigation and enforcement responsibilities. They will also co-ordinate press releases regarding any joint investigation and co-ordinate training initiatives for their staff.

These commitments to enhance communication and interaction between the respective teams will, over time, likely result in greater mutual understanding and, accordingly, more efficient and effective investigations, whether conducted jointly, in parallel or separately.


The signing of the MoU is a natural and important step for these two agencies given their complementary and partially-overlapping remits and increased collaboration in recent years. For those who are subject to investigation by the SFC or ICAC, it underlines the importance of forward planning and preparation, to manage down the risks that can arise from both bodies cooperating closely.